Author Archives: just2bruce

Dark Fleets and Flag States

It’s no secret that flag states are a weak point in maritime standards and regulations enforcement. Shipowners can easily circumvent rules by reflagging to a state that is more interested in the revenue from fees than in enforcement. And there are lots of them.

This article paints a darker picture than we have heard of– outright bribery of flag states. The motivation is to skirt sanctions of Russian entities and other a few other countries such as Iran.

According to the article, the Paris Memorandum of Understanding on Port State Control (Paris MoU) has released details of how states are trying to allow their ships to avoid detentions for violation of sanctions. One mechanism was to make bilateral agreements with port states.

I don’t quite see how the bribery angle works, though.

But with dark trade increasing, there’s no question that it would be worthwhile for shipowners to bribe flag states to register old and poorly maintained tankers. And most of those would find their way into the petroleum trade to Asia from Russia.

Dark fleet vessels engage in tactics like dangerous ship-to-ship transfers and AIS masking, which can allow oil to move without being affected by the sanction rules.

I hope the maritime authorities, such as the IMO and P&I clubs, will come up with improved procedures to stop unsafe practices.

Sam Chambers May 22, 2024

https://splash247.com/dark-fleet-registers-seen-bribing-flag-states-to-avoid-detentions-paris-mou/

IKEA asks courts to intervene as Convoy’s unpaid truckers send flurry of invoices

When the freight broker Convoy went into bankruptcy, apparently they walked away from paying many truckers for loads already carried. The individual claims weren’t too large, and as creditors they would be far down the line in a bankruptcy proceeding.

Quite a few of the truckers were carrying for IKEA, the giant home goods retailers. The estimate is somewhere around $500K owed to truckers for loads brokered by Convoy.

But IKEA doesn’t know whom to pay. Its contract says to pay Convoy, but only after Convoy has paid the truckers. The carriers were forbidden by the contract they signed from invoicing IKEA.

Apparently Hercules Capital has secured an interest in Convly’s assets including the accounts receivable as part of a financing deal. Hercules Capital has tried to invoice IKEA for $519,254 in transportation costs. But they haven’t agreed to pay the carriers, let alone done so.

To its credit IKEA placed the funds in care of the court. It has asked to be exonerated, and will allow the court to decide which truckers should be paid. But the wheels of bankruptcy grind slowly, and in the meantime, the truckers don’t have their money.

It’s an unpleasant situation for the truckers. I hope the court can address their concerns promptly.

By Alex Lennane 27/02/2024

IKEA asks courts to intervene as Convoy’s unpaid truckers send flurry of invoices

Boardroom battle at Norfolk Southern heats up

Ancora Advisors (some info here), an activist hedge fund with over 300 high-wealth customers, is suggesting 7 new board members for the Class I rail Norfolk Southern (NS). You may remember NS as the victim of the giant train wreck in New Palestine, OH, which released a lot of fumes; it has been criticized for having too few workers to perform required preventative inspections. Ancora also has suggestions for a new COO who is a disciple of Hunter Harrison, who implemented precision scheduled railroading.

Regulators also are suspicious of the idea. They fear that Ancora is more interested in short-term profit and will drive railroad operations back into a philosophy of cost savings rather than a culture of safety.

I looked a bit at the Ancora staff and CEO. I don’t see folks who seem like rabid cost-cutters. I do see people who might feel that NS’s current management has not done enough to address the operational problems that have recently come up, both in the safety line and in operational effectiveness in meeting customer requirements.

That too is a concern of regulators, though it’s a bit muted. Reciprocal switching is also being discussed now, and the rails are not enthusiastic about a change towards this practice, even though it would be consistent with a common carrier’s role, and would increase competition for customers.

We will watch closely to see how the boardroom battle continues.

By Ian Putzger in Toronto  28/02/2024

Boardroom battle at Norfolk Southern heats up as rail regulators weigh in