October 9th, 2020
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IN THIS ISSUE
1. IUMI looks at insurability
Notices & Miscellany
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced:
1. IUMI looks at insurability
The International Union of Marine Insurance’s recent two-week online conference included a comprehensive loss prevention workshop chaired by Uwe-Peter Schieder, from German Insurance Association, GDV and Mariella Dauphinee from Intact Insurance Company.
Both were keen to highlight the role of loss prevention managers and their role in identifying, quantifying and mitigating risk as an enabler of the underwriting process. Schieder explained:
Schieder highlighted a number of issues that IUMI is currently debating: Autonomous shipping is not a new concept. Various on-board systems and processes have been operating autonomously for a number of years and these have been adequately covered by underwriters. However, the growing practice of increasing the amount of autonomy onboard and bringing them together as a single and fully autonomous vessel is a reality that underwriters must continue to manage carefully. The silk-road connecting Asia with Europe is an ancient concept but the resurgence of this route by China and partners as part of the One Belt, One Road initiative will impact heavily on marine insurance. New cargo centres, new stations and new transport modes will all generate a new series of risks that will require careful scrutiny.
The availability of data is nothing new but the emergence of digitalisation and big data will significantly change the overall risk profile – perhaps for the better. Loss prevention managers will need to investigate and react to this change, advising their underwriters at the same time.
The trend towards electric vehicles and the inclusion of lithium-ion batteries is a further example. When conventional vehicles are transported by sea, efforts are made to ensure their fuel tanks are as empty as possible. Similarly, to reduce risk, some commentators are suggesting that electric powered vehicles should discharge their batteries to 25% or less. This is achievable when moving vehicles in PCTCs but less realistic for domestic cars being transported by commercial ferry. Fires resulting from these batteries are becoming more commonplace and on-board fire-fighting is challenging. Loss prevention teams must advise their clients and their underwriting colleagues accordingly.
2. Someone to blame – Michael Grey comments
If there is one good reason (and I cannot think of many others) for the development of the autonomous ship, it is that when a ship has nobody aboard her, the authorities will not be able to prosecute the master, if she comes to grief. This thought suddenly came to mind reading about the plight of the master of the VLCC New Diamond, who has been prevented from leaving Sri Lanka, where he was landed with his surviving crew, after the fire that devastated his ship in the Indian Ocean last month. It is suggested that the tanker’s master could be prosecuted, charged with offences under environmental protection legislation, after a certain amount of bunker fuel escaped from the severely fire-damaged ship before the salvors were able to patch the hole.
It is important, in such cases, to have someone to blame and the master of a casualty is the obvious choice. The improbability that he might have been in some way involved in the boiler explosion that killed one of the engine-room staff and initiated the conflagration in the machinery space that gutted the whole after end of the ship, or the subsequent bunker tank leak is quite irrelevant. If somebody is to face what passes for justice in such cases and is able to bear the blame, so much the better that it is the most senior officer.
It is probable that the 2000 built VLCC will be declared a constructive total loss , but worth pointing out that the action of the salvors and the Sri Lankan Navy managed to save the vessel’s full cargo of crude which, in some respects is a good-news story. The bunker spill itself, could have been a lot worse.
Nothing new in any of this, of course. The master has always been the fall guy, the man who carries the can. I can remember a master I sailed with telling me that if he ever lost a ship, he would make sure he went down in her. He wasn’t joking. And that was when casualties were investigated by marine professionals, or expert assessors, before criminal prosecutions became “normal” in so many of these incidents.
Isn’t there a case for more common sense following marine accidents, rather than simply unleashing the criminal prosecutors with a menu of possible charges that can be “marinised” to fit the bill? Throwing the book at the senior survivor, because he or she is available cannot surely be described as justice, or indeed, encouragement to aspire to become a shipmaster.
Michael Grey is former editor of Lloyd’s List.
3. SCMA Virtual Hearings
The Singapore Chamber of Maritime Arbitration (SCMA) has launched its Specimen Directions for Virtual Hearings to provide guidance to arbitrators, tribunals, and users of SCMA maritime arbitrations. The specimen directions can be adapted and customised to suit the circumstances. Key points in the specimen directions include the platform of hearing, how the hearing will be conducted and where necessary, how electronic hearing bundles might be organised.
These specimen directions were drafted by the SCMA Procedure Committee which is comprised of established lawyers and arbitrators from various jurisdictions including Singapore, Hong Kong and the United Kingdom. Andrew G Moran QC, Chairman of the SCMA Procedure Committee, said, “With a plethora of existing guidance from arbitral bodies, associations and institutions, the SCMA Procedure Committee hopes that these specimen directions represent a user-friendly, adaptable means of securing and conducting a fair and efficient virtual hearing of evidence and submissions in any maritime case.”
On the need for practical guidance on virtual hearings, Punit Oza, Executive Director of SCMA, explained, “The ongoing Covid-19 pandemic has necessitated a push towards digitalization and implementation of emerging technologies in many sectors of the economy. In the realm of maritime arbitration, virtual hearings have become part of the new normal and the SCMA hopes that these specimen directions will provide timely guidance to parties in SCMA virtual arbitration hearings.” These specimen directions may be accessed below and an explanatory note by Andrew Moran QC, Chairman of the SCMA Procedure Committee may be accessed at sgma.org.sg
4. Safety and Health at Sea by Arne Sagen
Much of Arne Sagen’s long life has been concerned with the promotion of marine safety. He has a formidable reputation as a fearless advocate of proper and adequate accident investigation and has been critical about many of the industry’s cavalier habits. With a lifetime’s experience in all aspects of ship operation, he is also a practical person, with a good deal of sympathy for the seafarers on the industry’s “shop floor”, assailed by rules and regulations, conventions and legislation.
His book, “Safety and Health at Sea” is first and foremost a practical compendium for practical people, packed with common sense and, above all, easy to use as a manual for everyday safety management. It is the 2nd edition of this book, but brought fully up to date for today’s officers and safety supervisors and is both readable and uncomplicated, with the information that people need to know, logically presented.
The author, who well understands the culture of modern seafaring, believes that what he sets out in this manual has the power to materially improve shipboard safety and health, using sensible procedures, proper planning and the use of simple check lists. He offers a template for shipboard safety systems, tools for the improvement of safety, a model for a healthy and fit crew, how safety and health aboard can be objectively reviewed, and how that important element “the human factor” can be so influential in the understanding of a safety culture, what causes accidents and human behaviour. The book also contains details of the most relevant IMO and EU regulations.
You can become bewildered by the sheer volume of safety information that descends upon those operating ships. This useful and manageable volume, published by Witherby, is as good as it gets.
Further information from firstname.lastname@example.org. (Review by Michael Grey).
5. Virtual reality approach
Given the challenging conditions of operating at sea and the high instance of accidents on ships involving human errors, the search has been to come up with new and innovative methods of improving training alternatives both on ships and ashore.
SQLearn which already provides e-learning solutions to the maritime industry has come up with an innovative approach by harnessing the benefits of virtual reality as part of the educational mix. This is the aim of the Brave Dolphin Project which has been supported by a grant from Iceland, Liechtenstein and Norway through the EEA Financial Mechanism 2014- 2021 in the frame of the Programme “Business Innovation Greece”.
The main objective of this project is the development of a VR application that will include a series of training modules on maritime emergencies that might occur onboard. Since particular safety risk cases are difficult to be simulated in a real environment, the VR application to be developed will include interactive scenarios and give the user a sense of presence in the simulated environment in which they will be encouraged to interact, offering an exciting and safe learning experience.
Among the most dangerous incidents that occur onboard are those of fire-explosion related accidents. These emergencies were also indicated by SQLearn’s maritime clientele as particularly crucial. Taking this fact into consideration, the VR training solution to be developed in the framework of this project will mainly include simulations of real-case scenarios of this context. It is estimated that the Brave Dolphin VR training tool, will engage seafarers with the necessary training by allowing them to immerse in a virtual world that simulates all those active factors during a corresponding emergency.
6. Hydrogen investigations
MSC Mediterranean Shipping Company has said it is further exploring the viability of hydrogen and fuels derived from it as a possible fuel source for the future for container shipping, and is increasingly pioneering the use of biofuels within its existing fleet.
Speaking on 5 October at the inaugural Maritime Transport Efficiency Conference in Geneva, MSC Group’s Bud Darr outlined some preferred options in a keynote speech on decarbonisation and during a panel discussion on fuels for the future.
“There’s no one single solution to decarbonise shipping; we need a range of alternative fuels at scale and we need them urgently,” he told delegates. “The future of shipping and decarbonisation will rely on strong partnerships from both the perspective of technology collaboration and procurement.”
In support of the UN International Maritime Organization’s (IMO) policy goals to decarbonize shipping, MSC is actively exploring and trialing a range of alternative fuels and technologies and is already actively bunkering biofuels at scale. Fossil-sourced LNG remains a transitional option, while carbon capture and storage, if perfected for marine use, could be useful.
Industry partnerships could help accelerate the development of clean hydrogen for the benefit of the entire container shipping industry. Despite some significant challenges to overcome mainly related to density, volume and safe handling, MSC is in favour of further R&D efforts to produce it in a greenhouse gas neutral way and to develop it at scale, along with other fuels that may derive from it.
MSC is also pioneering the large-scale usage of biofuel blends for container ships and is already bunkering responsibly sourced, up to 30% biofuel blends on a routine basis in Rotterdam, the Netherlands.
MSC recently introduced its latest sustainability report. For further details visit msc.com/sustainability
7. Changes to the sanctions regime
Watson Farley & Williams has produced a report on recent changes to the sanctions regime and likely forthcoming changes. Recent decades have seen a proliferation of sanctions regimes, used as foreign and security policy tools. While these sometimes have conflicting requirements, they use broadly the same tools: prohibitions or restrictions on trading, exports and imports, and the freezing and blocking of funds. This makes them of particular relevance to the shipping sector.
Against this background of increasingly complex sanctions regulation and ever closer attention by the relevant authorities, it is important to have a full understanding of the sanctions applicable to the industry, the risks they pose and the due diligence and compliance measures required to address these.
This report highlights some recent developments and forthcoming changes in the sanctions landscape in the UK, EU and US, compliance with which is vital to the shipping community. Further details here.
8. US advisory on GPS interference
The US Maritime Administration has issued a renewed advisory to the maritime industry about instances of GPS interference that have been reported worldwide within the maritime domain.
According to the advisory, “multiple instances” have been reported over the last year from areas including eastern and central Mediterranean Sea, the Persian Gulf, and multiple Chinese ports.
“The US Coast Guard Navigation Center (NAVCEN) and NATO Shipping Center websites contain information regarding effective navigation practices for vessels experiencing GPS disruption. The information reaffirms safe navigation practices when experiencing GPS disruptions, provides useful details on reporting disruptions, and is intended to generate further discussion within the maritime community about other disruption mitigation practices and procedures,” the Maritime Advisory 2020-016 states.
This guidance also recommends reporting such incidents in real time; noting critical information such as the location (latitude/longitude), date, time, and duration of the outage/disruption; and providing photographs or screen shots of equipment failures experienced.
Contact Information: Maritime GPS disruptions or anomalies should be reported immediately to the NAVCEN at https://go.usa.gov/xQBaw or via phone at 703-313-5900, 24-hours a day.
9. Swedish Club report
Container focus: Preventing the loss of containers at sea, a new loss prevention report from The Swedish Club, provides an overview of statistics, an insight into specific cases, and with the help of experts, delivers hands-on advice for preventing such losses.
Even a small number of containers lost overboard can pose a serious danger to shipping and the environment, says Lars Malm, Director, Strategic Business Development & Client Relations at The Swedish Club. “In Container focus we have used case studies to highlight common and avoidable errors and provided simple to follow advice to prevent them. However, unlike other of the Club’s loss prevention guides, in the case of container loss, the statistics that we have analysed fail to tell the whole story.
“One catalyst for such losses is known to be misdeclared cargo. Sadly, the nature of these losses makes it difficult to translate incidents into data, and more importantly, identify the party that causes such damage to the industry.
“A second catalyst we have seen is heavy weather. The excessive forces that are applied to the structure of a vessel in extreme conditions can lay bare errors that have been made when loading the cargo on board,” he adds. “The immediate cause may seem to be poor navigation but in fact often the root cause lies in port.”
The Club’s statistics show heavy weather to be the major immediate cause of container losses, responsible for half the claims and more than 80% of the costs – despite the widespread availability of sophisticated weather routeing systems.
Container focus explores planning, loading and stability, lashings, and provides advice on dealing with heavy weather. Case studies show the extent of the problems that can be revealed by heavy weather.
To request your copy of Container focus: Preventing the loss of containers at sea, please visit www.swedishclub.com.
10. Decarbonisation strategy
The destination for decarbonization is already set as the International Maritime Organization has made the large-scale development and deployment of carbon-neutral fuels a core part of its long-term strategy. The Poseidon Principles signed by major shipping banks for assessing the climate alignment of ship-finance portfolios illustrate the pressure to reduce greenhouse gas emissions from shipping. Cargo owners and charterers have also begun addressing GHG emissions when selecting shipping vendors.
The Maritime Forecast to 2050 creates 30 scenarios to model across three decarbonization pathways.
The report also explores uncertainty relating to seaborne trade demand. While the Maritime Forecast to 2050 is based on and concerned mainly with long-term trends between now and 2050, there is no denying that the Covid-19 pandemic is having a dramatic, and hopefully short-term, effect on many economic activities, including maritime.
The report estimates that total demand for seaborne transportation will decline by approximately eight per cent in 2020. For maritime trade, the negative effect of Covid-19 varies between cargo types. The report assumes a gradual recovery to the previous long-run norm for growth rates in seaborne transportation. Because manufacturing is typically more affected in an economic downturn than the economy as a whole, seaborne trade of manufactured products and base materials is usually at risk of greatest decline. The construction of commercial and residential buildings as well as vehicle manufacture will decline by almost a quarter in 2020, so related shipping sectors will be hit hard. Some sectors will rebound to higher than former growth rates after 2020 before settling down later.
Source: DNV GL https://www.dnvgl.com/expert-story/maritime-impact/Prepare-for-a-decarbonization-pathway.html
11. Climate change analytics
JBA Risk Management has recently launched Climate Change Analytics; a sophisticated data suite developed to help banks, lenders, investors, and the wider global financial sector to understand the potential long-term impacts of climate change and to meet regulatory requirements.
The launch of Climate Change Analytics represents the largest range of data available for financial services. It comprises the full range of Representative Concentration Pathways (RCP) climate scenarios and represents every five-year time period from 2025 until the end of the century.
Following Climate Week 2020, and at a time during which the resilience of our society and economy to climate change is under intense scrutiny, JBA is now providing the most comprehensive data suite for understanding potential flood risk under a changing climate.
For details contact jbarisk.com
12. OCIMF paper on its human factors approach
The Oil Companies International Marine Forum (OCIMF) has released a new paper outlining the organisation’s approach to human factors. The organisation’s mission, which was updated at the beginning of 2020, promises that human factors will be considered in everything the organisation does.
OCIMF aims to improve safety and environmental protection in the maritime industry by considering human factors when providing guidance and recommendations.
The Human Factors Approach paper outlines how OCIMF will integrate human factors into its activities and contribute to making our industry progress on human factors. It includes: A set of principles that guide OCIMF’s actions on human factors; an overall goal for OCIMF; a framework to understand how human factors issues impact operations and opportunities to take action. The paper is available to view in full or download here.
13. Fuel cell technology
New and flexible fuel cell technology can reduce emissions from shipping by 40 to 100%. Partners from shipping, R&D and oil and gas are now constructing a pilot system that can use different types of fuel. The system will first be tested at the Sustainable Energy catapult centre in Norway before installation on board a chemical tanker.
The new technology applies to many different types of fuel, including green ammonia and LNG. With this flexibility, vessels can choose fuel according to availability. The main partners in the project are Odfjell, Prototech, Wärtsilä and Lundin Energy Norway. Odfjell has leading expertise in global shipping, Prototech in fuel cell technology, Wärtsilä in maritime technology and energy, and Lundin Energy Norway in oil and gas.
“Our tests show a CO2 reduction of as much as 40-45% when using LNG, compared to current solutions. Increased efficiency and reduced fuel consumption also provide significant cost savings, and the ship will be able to sail significantly longer on the same amount of energy. The system will also be ready to operate completely emission-free from the locations where, for instance, ammonia is available for bunkering,” says Bernt Skeie, CEO of Prototech.
“The technology also enables direct capture of CO2, which will be yet another alternative for emission-free operation when logistics for CO2 management become available,” Skeie explains. The project aims to develop a technology that can provide emission-free operation over long distances. Battery solutions are currently not suitable for operating ships that sail long distances, the so-called “deep-sea” fleet.
This fleet consists of more than 50,000 ships globally and thus constitutes a big share of international shipping. It is difficult to achieve the goal of climate neutrality without finding solutions for this segment.
Events and appointments
Michael Austin brings to our attention the death of Captain Barry Thompson in Auckland recently. Michael worked with Barry as a surveyor in his marine surveying business in 1974 and continued until his retirement, while maintaining a friendship with him throughout his remaining years. He is best known as author of Surveying Marine Damage published by Witherby that is in its 3rd edition. He is also the author of a number of professional handbooks for the International Institute of Marine Surveyors (IIMS) who have also paid tribute to him in his passing. He was well known in many marine and insurance related circles and so may be known to some of Maritime Advocate’s readers.
West of England P&I Club, a leading insurance provider to the global maritime industry, has announced that Captain Simon Hodgkinson has been appointed as Global Head of the West’s Loss Prevention Department. Hodgkinson joins from Polarcus, where he was Head of Marine Operations and responsible for the performance of a fleet of ultra-modern seismic vessels. In addition to his work at Polarcus, Hodgkinson served on the DNV GL Technical Committee Middle East for six years and is a member of the Honourable Company of Master Mariners and the Nautical Institute.
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