23 September 2017
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Industry needs to save those who save ships

Business Times
13 Sep 2017
David Hughes

Professional salvage experts are losing jobs to freelancers who might lack the experience and equipment, in addition to raising the risk of wider damage.

Last week's column was about managing risk in the shipping industry. The biggest risk of all is that ships and lives are lost.

Compared to just a few decades ago, the modern shipping industry is much safer. Not only do fewer ships actually sink, but fewer also have major accidents - or in parlance of the industry become "casualties".

A few months ago, the International Union of Marine Insurance (IUMI) released statistics showing that the frequency of major vessel casualties rose in 2016 for the second consecutive year. There had been a year-on-year decline until 2015 when they recorded a sharp upturn which continued in 2016.

When a ship has a major accident, such as collision, grounding or fire, salvage experts, or "salvors", are needed. These specialist firms carry out the difficult and dangerous task of bringing a situation under control and often in the process protect the environment from damage.

The problem has been that a declining number of casualties has meant less work for salvors. And not having sufficient salvors available around the world is bad news for the industry, and for countries with coastlines.

Perhaps surprisingly, the recent increase in casualties has not been reflected in better times for salvors, as the president of the International Salvage Union (ISU), John Witte, explained recently.

Last week he told the ISU's 63rd Annual General Meeting here in Singapore: "It is no secret that the salvage industry is experiencing significant commercial pressures. ISU's most recent industry statistics (2016) show a fall in revenues from all sources of nearly 50 per cent on the previous year. Nevertheless, it is absolutely clear to me from the discussions we have had here in Singapore that this remains a vibrant industry.

"Many of our members have substantial assets and experienced personnel at their disposal and are willing to take on the financial risk of providing services in dangerous and uncertain circumstances."

Opportunistic operators

The ISU has 58 full members from around the world, many represented at the recent meeting. All ISU members have to demonstrate a track record in salvage as a lead contractor. ISU also has more than 80 associate and affiliate members representing a range of supporting industries and professions.

So why are salvors in trouble?

Mr Witte explained: "We know our members are not only competing against each other, but also against more opportunistic operators; the under-utilised offshore sector and so-called consultants who might assemble a team and gear on a case by case basis. "

However, ISU believes that ship owners and their insurers benefit in individual cases - and in general - by supporting a strong, professional salvage industry and members of the ISU."

He noted, for example, recent cases of giant container ships grounded in the approaches to both Hamburg and Antwerp and in which ISU members were able to use their experience and assets to re-float the casualties, avoiding potentially huge interruptions to trade in those key ports.

In concluding, he said: "There is a point of difference between our members and others offering salvage services and ISU will continue to work with shipowners and property and liability underwriters to ensure that the value of this vital industry is properly recognised."

Huge loss

Non-partisan observers might say that using suitable vessels from the offshore sector as and when needed makes sense. It is difficult to simply dismiss that view but the real argument is not about vessels and equipment, but expertise. ISU members, of course, know what they are doing, but the non-ISU specialists who Mr Witte dismisses as "so-called consultants" will surely bridle at the idea that the ISU has a monopoly on salvage expertise.

Nevertheless it would be a huge loss to shipping industry, and would expose the world's seas to more pollution if the traditional specialist salvage firms gradually disappeared. We need to listen to what the ISU is saying.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.