Professional Writing on "Maritime Laws: 3 Case Studies"

Professional Writing 9 pages (3808 words) Sources: 30

[EXCERPT] . . . .

This system of transportation moves just about ninety per cent of cargoes and commodities to all parts of the world at reasonably low cost when matched with the value of the goods being shipped. Not only does this recommended system of transportation limit the costs incurred but it also has both logistical advantages and further conservation and/or environmental advantages. [16: (U.S. Department of Transportation)] [17: (Dow and Leschine, 1990)]

Both the United States and Cuba benefit from a well-organized and extensive, global regulatory organization for safe and ecologically sound seafaring and marine transportation. This system distributes and conveys without a doubt the world's most uncontaminated, least polluting service for the bulk transport of cargoes, and with industry players dedicated and devoted to environmental protection[footnoteRef:18]. Another important factor for developing a cost-effective system of transportation is that it will offer a distinctive platform for collaboration between the government administrations of the United States and Cuba. In the same manner, the system of transportation will also create a stage for global and regional organization for different players in the industry as well as for other maritime stakeholders. Modern society is necessarily heavily reliant on the Maritime system of transportation and profits from its level and easy way of operation. Without a doubt, present-day society has become accustomed to a comparatively economical or cost-effective, yet consistent and suitable freight handling system[footnoteRef:19]. [18: (Graham, 1998)] [19: (International Maritime Organization, 2013; Boske and Cuttino, 2003)]

Another important factor to be considered in developing a cost-effective means for transporting goods both from Cuba to inland destinations in the U.S., and from the U.S. To inland destinations in Cuba, is the factor of congestion, as underlined by the U.S. Federal Maritime Commission (FMC). Currently, several shipping companies have formed alliances; as a consequence, there have been increased and worsening port delays that hamper the movement of cargo and goods[footnoteRef:20]. Congestion could potentially become extreme as several cruise lines would also have interest in the container terminals in the ports of the United States and Cuba. With every line wishing to make use of its own personal facility, the containers and cargoes shipped by the different carriers will end up being dispersed around the expanse of the dock location and will thereby necessitate re-positioning[footnoteRef:21]. This shows the need for a cost-effective transport system. The cost benefit is that there would be no delay in the ports, and therefore containers and cargoes would be delivered quickly to their inland destinations in both countries. What is more, with a cost-effective system of transportation, both economies would be able to thrive from trade as well as the surrounding regions such as the Caribbean[footnoteRef:22]. [20: (Milewski, 2011)] [21: (Durvasulaet al, 2002)] [22: (OEC Group, 2015)]

Question Three

Dear Stakeholders,

As you are all aware, one of our vessels recently suffered an engine room fire that caused the 3000 passengers who were aboard the ship to be stranded for four days. These were four devastating days for our clients as they had to go without running water, food, and of course air- conditioning. In response to this disaster to the passengers, I have made a decision that I believe is in the best, long-term interests of our firm. This is to offer each of the passengers not only a refund of their full cruise fare, but also to include full fare ticket for another cruise, to be used at a later date of their own choice. I am well aware that the cost to our firm for this refund cost is likely to result in financial constraints for the company for at least the next two years.

We are under no contractual obligation to offer passengers either a refund or the gift of a future fare. Every passenger agreed contractually to our terms upon signing up for the cruise, a contractual obligation that indicates no refunds will be provided. However, I firmly believe that my decision to benefit the customers is our best, most effective active, in terms of the company's well-being over the long-term.

My reasoning addresses logistical, cost-benefit and (potential) legal reasons. First, as the Chief Executive Officer (CEO) of the company, my main obligation and responsibility for the company is to ensure not only its long-term viability in the industry, but also to work towards profit maximization for you as stakeholders. As you are well aware, other cruise ship firms have recently been in the news with analogous situations, and they opted not to reimburse their passengers. As well, they opted not to reimburse rescue operations. The press and public support for these other cruise-lines was very bad. Indeed, it was so unfavorable, when Carnival cruises said they would not reimburse the government for the rescue, that Carnival reversed their stance just 4 days later.

While we as Funship Alliance have to evaluate our own business on a case-by-case context, we would be foolish not to pay attention to the media and prior examples from other lines. Our public reputation is one of our strongest assets as a company, and we are a company that depends upon the public to 'stay afloat'. Thus, one of the major reasons for my decision is consideration of the brand reputation of Funship Alliance as a company. I believe that without strongly positive and pro-active steps to reimburse and express our sincere regret to passengers, we risk ruining our brand reputation. It is important that we make sure that the passengers are not frustrated and exasperated by expectations for the cruise and offended by a poor and scant offer of compensation.

At the moment we are facing and trying to pull through some potential brand impairment; therefore we have to make certain that the compensation we offer to the passengers is generous and more than fair. As a company, logistically, it is imperative for us to express real and major concern for the passengers and properly communicate what we are doing[footnoteRef:23]. [23: (Mungin and Morgenstein, 2013)]

Financially, this decision is of course a potential blow to the company. However, the recent turn of events necessitates financial sacrifices. As a company, I believe this is the right decision rather than opting not to properly compensate the passengers and badly damage the goodwill of the consumers we depend upon for our company's livelihood. In the present day and age where technology is advanced and where the people in general take consumer feedback very seriously, Funship Alliance cannot afford to have bad reviews from the consumers. Goodwill is an aspect that is not easily repairable once it becomes damaged. In addition, with poor perceptions through the public opinion, the company might incur numerous losses when the consumers opt for other cruise lines and the company faces decrease in revenues and income due to declines in bookings. All these instances have been avoided by offering the consumers the sufficient compensation[footnoteRef:24]. Therefore, the cost-benefit of the company is key in this decision making. [24: (Bartlett, 2013)]

With respect to legality issues, there are conflicting aspects to consider. On one hand, the fine print on the tickets that the passengers hold indicates that the company is not liable for any untoward incidents that take place during the cruise; specifically our company is not bound to reimburse the passengers[footnoteRef:25]. From this aspect, any redress sought after by the passengers through law suits would be null and void. [25: (Fantz, 2013)]

However, there are several other legal aspects to be considered. The passengers potentially have a strong legal case along the lines of negligence. In accordance with the law, in order to prove negligence, the appellant has to show that the defendant owed the plaintiff a duty, and that the defendant breached that particular duty[footnoteRef:26]. The plaintiff also has to prove that they suffered damages as a result of this negligence and/or breach of duty[footnoteRef:27]. It is important to note that in accordance with maritime law, a cruise line owes its passengers the duty of exercising reasonable care with regards to any situation and state of affairs as was stated in the case of Kermarec v. Compagnie Generale Transatlantique (1957)[footnoteRef:28]. In this case it is possible for the passengers to take Funship Alliance to court based on the argument that the company was in fact negligent in checking its engine capabilities prior to leaving for the cruise. This argument could potentially make the case that we as Funship Alliance failed to exercise due care. As well, the passengers did experience injuries as they had limited or no food for four days in the cruise ship. In accordance with the Shipping Act of 1984, a cruise line is indebted and obliged to provide its passengers with a high extent of care. [26: (Schwartz, 2014; Best and James, 2007)] [27: (Erin Lynn Baker v. Carnival Corporation, et al., 2006)] [28: See Table of Authority]

Taking all these factors into consideration, I felt it was appropriate to compensate the passengers. Avoiding a law suit and also… READ MORE

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