American Club Circular No. 35/1 8 1 OCTOBER 2, 2018 CIRCULAR NO. 35/18 TO MEMBERS OF THE ASSOCIATION Dear Member: THE INTERNATIONAL GROUP OF P&I CLUBS: 2017/18 ANNUAL REVIEW The International Group of P&I Clubs, of which the American Club is of course a member, has very recently published its 2017/18 Annual Review, a copy of which is attached for Members’ ready reference. The document is available on the International Group’s website at www.igpandi.org and is also being posted on the Club’s own website at www.american-club.com. It contains a review of several of the most important issues with which the International Group has been collectively engaged over the preceding twelve months. It is hoped that Members will find it to be of considerable interest speaking, as it does, to the very broad range of activity with which the Group concerns itself on behalf of the shipping community throughout the world. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB 1 123.10944,960%8M18a0y 5US5$ Annual Review 2017/18 23 123.10944,960%8M18a0y 5US5$ CONTENTS CHAIRMAN’S STATEMENT 4 EXECUTIVE OFFICER’S STATEMENT 8 REINSURANCE 10 SANCTIONS 14 AUTONOMOUS VESSELS 16 POLLUTION 18 CARGO WATCH 20 CLUB CORRESPONDENTS’ CONFERENCE 22 PIRACY AND ARMED ROBBERY AT SEA 24 P & I QUALIFICATION 26 STOWAWAYS 28 ON THE RADAR 29 Total mutual tonnage in the Group Clubs now exceeds 1.209 billion GT The world fleet comprised just over 94,600 vessels totalling 1.322 billion GT West Africa continues to attract the highest level of piracy activity, with 42% of incidents reported in 2018 Japanese owners now hold the largest share of the global order book with 18% of total ordered tonnage A further 7 States have ratified the Nairobi Wreck Convention bringing the total number of contracting states to 41 On May 8, 2018 the US announced its unilateral intention to withdraw from the JCPOA on Iran KEY FACTS Since 2014 the average size of entered vessels has increased by 19% to just under 21,000 GT 21 of the world’s top 25 reinsurers participate in the Group reinsurance programme Between 2008 and 2018 removal of wreck accounted for 46% of all claims from ground up 45 123.10944,960%8M18a0y 5US5$ in 2017 seaborne trade grew over 4% 2018 forecast 3.2% 21 17 13 9 5 US$000/day Shipping Cycle 2012-2018: ClarkSea Index (The ClarkSea Index is a weighted average of the earnings of Tanker, Bulk, Gas & Container Vessels) Source: Clarksons Jul ’12 Oct ’12 Jan’13 Apr ’13 Jul ’13 Oct ’13 Jan ’14 Apr ’14 Jul ’14 Oct ’14 Jan ’15 Apr ’15 Jul ’15 Oct ’15 Jan ’16 Apr ’16 Jul ’16 Oct ’16 Jan ’17 A pr ’17 Jul ’17 Oct ’17 Jan ’18 Apr ’18 Jul ’18 Hugo Wynn-Williams Chairman CHAIRMAN’S STATEMENT Collectively stronger. 2017/18 has been a year of focused introspection within the Group, including a root and branch review of the ways in which the Group delivers benefits for shipowners through its claims pooling arrangements and through the sharing of the unparalleled underwriting, technical and legal knowledge and expertise which resides within the managements of the Group clubs. Tonnage up — reinsurance cost down Another increase in Group-entered tonnage, and a fourth year of savings in the cost of the Group reinsurance purchase, albeit more modest than in recent years, were among the notable and welcome features of 2017/18 for the Group clubs and their shipowner members. World fleet growth continues to slow World fleet growth continued to slow duri