Standard Deviations...

more on the cport meeting....
At one point, a question was posed asking why C-PORT wasn't the logical forum for the industry to create some standards that would reflect what would be "fair and reasonable" salvage demands. This discussion was swiftly squashed as the executive director (correctly) pointed out that any discussion of prices or fees was strictly forbidden under anti-trust laws, and would jeopardize C-PORT's non-profit status.

I have some great news for Red Right Returning readers: this blog is not affiliated with C-PORT, and in fact I'm not even a member of C-PORT. I wish I could make money writing this blog, but I don't make a nickle. Even so, RRR is not subject to any laws that govern non-profit entities. Finally, since I don't own a towing company (any more), I'm free to discuss the subject with impunity, and I probably will in the near future. (Full disclosure: I am a summertime sub-contractor to a privately held towing and salvage company.)

But couldn't C-PORT at least cozy up to the issue by discussing some billing standards, or disseminating an industry wide lexicon, so we are all talking about the same thing when we use jargon like "soft-aground" or "Open Form."

The insurance industry would like to see us adopt some standards, right? OK, let's play a little game of "good for the goose, good for the gander". I say we contact the American Insurance Association , and propose that we jointly adopt the following:

C-PORT salvors will abide by the International Convention on Salvage-1989, as ratified by the United States of America, whenever applicable.
The insurance companies will refrain from ignoring or attempting to renegotiate international treaties, and instead recognize that as companies licensed to do business in the USA, they too are bound by the treaties signed by their government.

C-PORT salvors will document everything we can, with photos, video, audio, witness names and signed contracts.
The insurance companies agree that someone who has check writing authority will actually read/watch/listen to that stuff BEFORE they pass it on to an attorney.

C-PORT salvors will submit a written report detailing everything that occurred, and back up our details with the above mentioned documentation.
The insurance companies agree to submit any evidence - including verbal statements that contradict our version of the events - from their clients or witnesses to us in writing, with names and contact info for each.

C-PORT salvors agree to notify the insurance company within 24 hours after the vessel's redelivery (if not sooner) and request that a claim be opened.
Insurance companies agree to open a claim when they have knowledge of a salvage event, and provide all the parties a claim number when one is requested.

C-PORT salvors agree to submit a detailed salvage report within 15 days of the vessel's redelivery.
Insurance companies agree a supply a copy of the declaration page of the policy to the salvor within 5 business days after they receive notice that a salvage claim is pending.

C-PORT salvors agree that they are bound by the arbitration clause in signed salvage contracts.
Insurance companies agree that they are bound by the arbitration clause in salvage contracts signed by their clients.

Don't even get me started about Letters of Undertaking.

....I'm ready to duck.....let 'em fly.

Contemplating Values

photo: Ringo contemplates his contribution to the crew of Water Torture...

The salvage seminar at last week’s C-PORT conference included some discussion about “fair and reasonable” charges for salvage awards. I will argue about fair and reasonable in another post. Today, I want to correct what I feel was a serious error brought forth by the panel. This error was compounded when at least two members of the audience agreed with the underlying principal.

The error was this: a good way to determine if your salvage bill is fair and reasonable would be to consider how much that kind of service would be worth to you. To reinforce that idea, a panelist restated it this way: “How much would I be willing to pay for this salvage on my boat?” The implication is that if you feel the fee is more than you would be willing to pay, then it’s more than you should charge.

This thought process exhibits a failure to understand the underlying concept of salvage awards. The question is not how much is someone willing to pay for a service – the question is how much would you be willing to pay to prevent further damage or total destruction of your vessel. That is the essence of a salvage award. A salvage award is based more on what if, than it is on what happened. This is a critical distinction. Attendees of the seminar may be left with the mistaken idea that a salvor should wonder “how much would I have paid someone to toss me a line to keep my boat from hitting a bridge?”

Admiralty law poses a very different question – “what would the boat be worth if it did hit the bridge?” The real value of your effort is extracted from the answer to that question, and the final award may not always seem reasonable if you limit yourself to contemplating the value of services rendered.

The discussion further confused the issue by placing the cost burden on the boat owner instead of where it almost always falls: the insurance company. To be really precise, a well reasoned salvage award is based on this question: how much should the insurance company pony up to enjoy the fruits of your success? If you save a boat from hitting a bridge, it is well established in law that the insurance company is a direct beneficiary of your entire operation – the money you have invested in equipment, office space, your years of training and experience, your readiness and your skill - in addition to the value of your on-scene efforts. This is why professional salvors generally receive larger awards than Good Samaritans.

Considering how much you would pay for a job is an insufficient method for producing a well reasoned salvage demand, because it emphasizes what actually happened. A true salvor gets rewarded for what didn't happen.

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!

Support C-PORT

With the annual C-PORT meeting coming up at the end of this week, I thought it was appropriate to put in a plea for continued support.

C-PORT is our industry's watch dog and our voice in Washington. The best way to keep up with that big computer in Washington is to be involved with C-PORT. C-PORT is a small organization and has certainly had some problems over the years, but it also has had some successes as well (keeping us out of the radar endorsement requirement comes to mind).

More importantly, this is the only organization that specifically represents the interests of marine assistance companies.

Supporting C-PORT does three important things: first, it increases the chance that our industry is thought of as separate (in the eyes of government regulators) from other sectors, rather than being lumped in with tugs or uninspected passenger vessels. Secondly, the annual conventions are a neutral gathering place where competitors can meet and exchange ideas, air some grievances, and develop the professional standards that improve the industry as a whole. Finally, the existence of a strong well attended trade association is one of the hallmarks of professionals in business.

I hope to see everyone in Florida this weekend, and for those who can't make it, there are plenty of ways to support C-PORT from a distance. Phone calls, letter writting and research can all be done from your desk. If you know a local tower who isn't a member, please call them and urge them to join. This is a case when more is better.