Bracing for a slow year

Regular readers will remember that I contend that our industry is somewhat resistant to a slowing economy or recessionary pressures. This is based on my observation that during an economic slowdown, the diehard boaters continue to go boating, but skimp on their maintenance spending, which leads to a higher percentage of the active boaters breaking down and needing our service. During the boom times, an increase in boating traffic should increase demand for assistance, because a certain percentage of boats are gonna need a tow, regardless of the age of the fleet or how well maintained that fleet is.

But, that doesn't mean we just ignore the signals, or toss all caution to the wind. This week's news contains two signals that suggest that this might be a good year to defer large capital investments like a new boat, especially if you're spending money based on future cash flow.

Item 1: Mercury Marine takes a week off.

Item 2: SeaRay will cut some jobs based on a slumping demand for boats.

Its not all bad news out there, but these are two of the biggest players in the recreational market, and they are reacting to market demands. Furthermore, these two companies are part of huge corporations who have fulltime finanical gurus on their staffs who do nothing but predict demands for their products. When SeaRay forcasts a slumping demand, you need to take notice.

We certainly know that the price of oil will be higher this summer than it is now, and everyone sort of expects $4/gal at the fuel docks, if not higher.

There is nothing wrong with taking a year to "hunker down" and practice fiscal restraint for your business. In fact, a really healthy business plan will include strategies for adapting to the fluctuations of the market. Perhaps this year will be your chance to hone those strategies?

Rule change for Master of Towing proposed

A friend in California sent me this newspaper story about the proposed changes in the seatime for a Master of Towing License. If you are interested, here is the text from the Federal Register [click here to read it all]

(3) Alternate progression: This proposed rule would add a new paragraph to 46 CFR 10.465 that would allow a master of steam or motor vessels of not more than 200 GRT to become a mate (pilot) of towing vessels under certain conditions. The paragraph would provide that the master of steam or motor vessels of not more than 200 GRT would need three years of service as Master of steam or motor vessels less than 200 GRT, completion of a Towing Officer Assessment Record, completion of the towing vessel license (apprentice mate) exam, and 30 days of training and observation on a towing vessel on the route being sought. In addition, the current regulatory language in 10.464(f) and 10.465(d) tries to describe a certain type of license, rather than using the actual endorsement title, which is unnecessarily confusing. This proposedrule would replace the descriptive terms ‘‘inspected, self-propelled vessels’’ with the actual endorsement title ‘‘master of steam or motor
vessels’’.

As far as I can tell, this would mean many of use could get a Mate of Towing, not a Master of Towing, with as little as 30 days in the wheelhouse. Did I read it wrong? I guess I don't see what all the fuss is about. I suppose that this change would mean that a guy with only 30 days in the wheelhouse would be eligable to stand a wheel watch, all by himself. But, in my opinion, the real change that occured after the Amtrack accident was the radar endorsement requirement, not the days behind the wheel of a tug boat. Nothing in the proposed change would alter that, or any of the other training requirements put in place since that railroad accident.

TWIC Stickler

Some guys are just sticklers for the truth. Consider the email I received in response to my post that everyone has to get the TWIC.

"Yeah, but what is the actual law that says I gotta have a TWIC if I don't use my licence? I don't believe that I gotta have it if I never use my ticket."

Here it is. Read 'em and weep:

CFR Title 46: Shipping
PART 10—LICENSING OF MARITIME PERSONNEL Subpart A—General

§ 10.113 Transportation Worker Identification Credential.
By September 25, 2008 all mariners holding an active License, Certificate of Registry or STCW endorsement issued under this part must hold a valid Transportation Worker Identification Credential (TWIC) issued by the Transportation Security Administration under 49 CFR part 1572. Failure to obtain or hold a valid TWIC may serve as a basis for suspension or revocation of a mariner's license, COR or STCW endorsement under 46 U.S.C. 7702 and 7703.

Please note it says "all mariners holding an active License..." not using or working under or acting as, but holding. Translation: If there is an unexpired USCG license with your name on it, you must have a TWIC by Sept 25, 2008, whether or not you ever intend to use the license or work as captain, or enter any secure areas.



Furthermore:

Failure to obtain or hold a valid TWIC may serve as a basis for suspension or revocation of a mariner's license, COR or STCW endorsement under 46 U.S.C. 7702 and 7703.

What part of "suspension or revocation" do you want to take a chance with? Maybe I'm on the cutting edge (doubtful), but I am really surprised about how much confusion and misinformation is running around out there about this TWIC issue. It just seems so simple to me - after Sept 25, 2008, the USCG will accept only one proof of your background and identification, and that will be the TWIC. Without that proof, your license becomes void. End of story. Get a TWIC or surrender your license.

TWIC Applies to ALL Licensed Mariners

At C-PORT last week, there seemed to be a surprising amount of confusion about who is required to obtain a TWIC. Statements like "My friend has a 6 Pack license and runs a dive boat, and he says he doesn't need a TWIC" are just incorrect or misinformed. For the most part, these myths were dispelled and the record was set straight at the meeting, but it bears repeating here.

As required by law, all credentialed U.S. merchant mariners must obtain a Transportation Workers Identification Credential (TWIC), prior to September 25, 2008 – this includes all persons holding a Coast Guard-isued License, Certificate of Registry, Merchant Mariner Document or STCW...

If you hold a Captain's License (either Master or OUPV), you are required to get a TWIC, whether or not you will ever use the TWIC at work or for security purposes. Click here for a copy of an official announcement from the USCG. Print that out for your doubting friends. Better yet, post it at yacht clubs and fuel docks in your area. There are probably a bunch of 6Pack guys who will just let their tickets expire rather then endure TWICification. Perhaps a little culling of the pack isn't such a bad idea?

Here is the logic why all CG License holders have to get TWIC'ed. The Coast Guard is using the TWIC program as an opportunity for them to get out of the bureaucratic burden of fingerprinting and background checks. For years, when you obtain or renew your USCG ticket, they would conduct a background check and take your fingerprints. That burden will now be transffered to the TSA, and your TWIC will be all the proof the USCG needs know that you are who you say you are and that the FBI has already got a thick file on you.

For more detailed discussion on the exact CFRs and the TWIC, please click here to see my TWICilicious Webpage.

Go Fast, and prosper...

So, I was talking with one of my west coast compadres, who recently raised a 38' Go Fast that was sunk at the dock. He charged a premium rate to raise the boat, and the insurance company complained that his price was more than they were used to paying.

The owner of this boat claims he was doing 105 mile/hr the day before (that is why they're called "go fast", right?), and perhaps that is why there is some huge open gash in the hull?

Some of you may know that I am also a licensed Private Pilot. I am licensed to fly "Single Engine Land" and I hold a High Performance rating. In pilot speak that means I am licensed to fly something just barely faster than a turtle with wings, something akin to a Cessna 182, rated at 235hp. Even if I get thousands of hours of experience in that type of aircraft, there is no way that I can fly a twin-engine aircraft, a retractable gear aircraft, or even a single jet engine aircraft with fixed gear, until I get some further training.

If I win the lottery next week and go buy myself a Lear Jet, I can get an FAA Lear Jet rating in about a week (pretty scary, huh?) That would be according to the FAA. However, I will probably have to log about 300-500 hours flight time in an actual Lear Jet accompanied by a Certified Flight Instructor (qualified in a Lear Jet) before any insurance company will insure me to fly that aircraft by myself. In the world of aircraft risk management, insurance companies are notoriously gun-shy. The difference between 180hp and 300hp is huge, and that leap alone could take months of training. When you start talking propeller verse jet, you are talking leaps and bounds of training and actual time behind the wheel.

Which brings us back to the boat story. What are the criteria for getting insurance on a "go fast" 2000hp boat? How many hours, and what training does that boat owner have to get before the insurance company says "go for it, Dude!”? As far as I can tell, it amounts to: “how much horsepower insurance can you afford, Dude?”

When an insurance company makes the wrong call, and should have said "no way, dude,” why is it that they suddenly feel the urge to call our business practices in to question when it was their dude who did exactly what we all knew he would?

C-PORT Summary

The C-PORT annual conference is over, and I think it was a huge success - especially when compared to previous years. A contributor to the success is the shear numbers of attendees. I believe we had over 170 folks attending this year. Holding the conference in conjunction with the networks’ conventions means that companies don’t have to endure two business trips with time off and expenses.

Speaking of expenses, once again Boat/US announced that they would reimburse their towers for the cost of the C-PORT membership dues. This is a strong endorsement of C-PORT, and any Boat/US tower that is not a member of C-PORT is….well, foolish?

The annual banquet was great, and Capt. Chris Hall, Chief of Search & Rescue for the entire Coast Guard, was the speaker after dinner. His speaking style relies on healthy doses of humility and hilarity, and I think everyone in the room immediately took a liking to him. More importantly, he reiterated Dean Lee's theme that the Coast Guard, at the highest levels, has truly accepted commercial marine assistance as a professional industry that is a vital component of the SAR process. I get the impression that the USCG is now actively (rather than reluctantly) seeking to strengthen and improve our partnership. Amen to that.

Dispatch from C-PORT Conference

Most of my readers are probably here in Amelia Island, but for those that aren't, here are a few of today's highlights from the C-PORT annual conference.

The morning was certainly brightened by our keynote speaker, Capt Dean Lee Chief of Staff for USCG 7th District. Capt. Lee continues his threat to retire, but the skeptics abound. Lee brought some fabulous video of his recent excursion in a Surf Boat out in Oregon. Then he gave a great pep talk and brief history of his association over the years with towing and salvage.

The other moring panel included a visit by Richard Moore, Vice Pres of NASBLA (see my early blog here). He gave a very encouraging speech and extended an invitation to C-PORT to become more involved, especially on the issue of gov't agency competition. This was extremely well received by the boys from California. Perhaps there is some hope on this struggle?

After lunch, Larry Keefe presented great news about the S&S insurance program. Rates will hold steady, plus bonus discounts for renewals and the incidental diver rider is now free.

Fiona from C-PORT managed to bring a record 21 vendors to the conference, and all attendees spent a few hours last night browsing equipment and talking to the vendors. I even took advantage of a great deal on "Rescue Tape".

Off the the banquet!