Insuring cleaner oceans: the economics of oil pollution prevention

The current system of controlling oil spills involves a complex relationship of international, federal and state law, which has not proven to be very effective. The multiple layers of regulation often leave shipowners unsure of the laws facing them. Furthemore, nations have had difficulty enforcing these legal requirements. This thesis deals with the role marine insurance can play within the existing system of legislation to provide a strong preventative influence that is simple and cost-effective to enforce. In principle, insurance has two ways of enforcing higher safety standards and limiting the risk of an accident occurring. The first is through the use of insurance premiums that are based on the level of care taken by the insured. This means that a person engaging in riskier behavior faces a higher insurance premium, because their actions increase the probability of an accident occurring. The second method, available to the insurer, is collectively known as cancellation provisions or underwriting clauses. These are clauses written into an insurance contract that invalidates the agreement when certain conditions are not met by the insured The problem has been that obtaining information about the behavior of an insured party requires monitoring and that incurs a cost to the insurer. The application of these principles proves to be a more complicated matter. The modern marine insurance industry is a complicated system of multiple contracts, through different insurers, that covers the many facets of oil transportation. Their business practices have resulted in policy packages that cross the neat bounds of individual, specific insurance coverage. This paper shows that insurance can improve safety standards in three general areas -crew training, hull and equipment construction and maintenance, and routing schemes and exclusionary zones. With crew, hull and equipment, underwriting clauses can be used to ensure that minimum standards are met by the insured. Premiums can then be structured to reflect the additional care taken by the insured above and beyond these minimum standards. Routing schemes are traffic flow systems applied to congested waterways, such as the entrance to New York harbor. Using natural obstacles or manmade dividers, ships are separated into two lanes of opposing traffic, similar to a road. Exclusionary zones are marine areas designated off limits to tanker traffic either because of a sensitive ecosystem or because local knowledge is required of the region to ensure safe navigation. Underwriting clauses can be used to nullify an insurance contract when a tanker is not in compliance with established exclusionary zones or routing schemes.

Bringing Japanese manufacturing systems to America: the feasibility of implementing just-in-time production in the United States

This paper addresses the feasibility of implementing Japanese manufacturing systems in the United States. The recent success of Japanese transplant companies suggests that Just-In-Time (JIT) production is possible within America's industrial environment. Once American workers receive proper training, they have little difficulty participating in rapid setup procedures and utilizing the kanban system. Japanese transplants are gradually developing Japanese-style relationships with their American supplier companies by initiating long-term, mutually beneficial agreements. They are also finding ways to cope with America's problem of distance, which is steadily decreasing as an obstacle to JIT delivery. American companies, however, encounter Significant problems in trying to convert traditionally organized, factories to the JIT system. This paper demonstrates that it is both feasible and beneficial for American manufacturers to implement JIT production techniques. Many of the difficulties manufacturers experience center around a general lack of information about JIT. Once a company realizes its potential for setup-time reduction, a prerequisite for the JIT system, workers and managers can work together to create a new process for handling equipment changeover. Significant results are possible with minimal investment. Also, supervisors often do not realize that the JIT method of ordering goods from suppliers is compatible with current systems. This "kanban system" not only enhances current systems but also reduces the amount of paperwork and scheduling involved. When arranging JlT delivery of supplier goods, American manufacturers tend to overlook important aspects of JIT supplier management. However, by making long-tenn commitments, initiating the open exchange of information, assisting suppliers in reaching new standards of performance, increasing the level of conununication, and relying more on suppliers' engineering capabilities, even American manufacturers can develop Japanese-style supplier relationships that enhance the effectiveness of the system.