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Marine companies starting late in exterminating the Millennium Bug better have contingency plans to deal with problems likely to occur.

Ships are particularly vulnerable because of the number of embedded chips that control so many functions, said Mark Holford, a director at Thomas Miller Risk Management (UK) London Ltd.

"One thing is certain: Nobody will get it all right," he said of the attempt to find Year 2000 computer glitches. "It's impossible to find all Y2K problems. Indeed, some of them are impossible to get at."

Speaking at the Houston Marine Insurance Seminar last week, Mr. Holford said some ships will have at least minor problems when the year 2000 begins. "Some of those could produce something more serious."

While there is a risk of a serious incident, "one can't tell," if an incident will occur, Mr. Holford remarked. "I certainly wouldn't predict a whole host of serious incidents."

He warned shipowners that "time is getting short," and he suggested that if they haven't done so already, it's time to start thinking about ways to mitigate problems that could occur at the calendar change.

"Contingency planning is absolutely crucial," Mr. Holford said. "The late starters will certainly have to rely on it in order to cut the problems down."

He emphasized that the Year 2000 risk is a "management problem, not an (information technology) problem. . . .You can't just leave it to IT. You need to make decisions" that include whether the business can survive if Millennium Bug problems are severe.

As part of a contingency plan, Mr. Holford said some shippers should consider suspending cargo operations on the first day of the year 2000. And, he added, "you might fully provision your ships and restrict crew transfer."

Guidance systems could be affected. "How many (ships') masters still know how to use a sextant?" Mr. Holford asked.

Automatic systems should be curtailed, and ships should have "a man in the unmanned engine room," he suggested.

Testing for Year 2000 problems should always be done when the vessel is in port or dry dock, Mr. Holford said. Because many of a ship's systems are integrated, the shutdown of one system could lead to the failure of others.

He said it appears that newer ships are the most vulnerable because they have the most "electronic goodies." That doesn't mean older ships are out of danger, he added, because in many cases they carry updated equipment that is not Year 2000-compliant.

Because ships are "one off," or not built in series as are aircraft, the process of finding the bugs is slowed, Mr. Holford noted. If the vessels were built alike, many of the problems would be in the same place, but even "sister ships" often are built differently, he said.

Don't rely on new bug-free equipment to be available, he warned shippers, because as the year 2000 approaches, the ability of manufacturers to provide such equipment will be "severely strained."

And, he added, don't take manufacturers at their word when asking whether equipment already in place is compliant. "They will tell you that it is compliant when it's not. And they'll tell you it's not compliant when it is," partly because of the legal consequences that could come from claiming a non-compliant piece of equipment is all right, Mr. Holford warned.