1. Apologies all round
2. IMRF safety initiative
3. ETS financial exposure
4. Claims recoveries
5. Supply chain safety
6. Sustainable fund
7. Sales terms and safety
8. IUMI stats
9. Fire suppression
10. Ship education
11. Battery fires
12. Anchoring issues
13. Seafarer population research
Notices & Miscellany
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1. Apologies all round
By Michael Grey
Not before time, there is something of a backlash manifesting itself over the issue of ethical investments, as some investors are discovering that one can tolerate just so many sermons when it seems that the ethical alternatives fail to cut the financial mustard. It is one thing for your bank to be sending you helpful messages about failings in your lifestyle and hints for environmental improvement. It is arguably going a bit far when you find that the managers retained to improve your finances have decided to disinvest from funds linked to sectors that the sensitive among us find “problematical.”
This includes oil and gas or the defence industries. Somebody has dared to point out that without drilling for hydrocarbons, all the lights will go out, and in a dangerous and unstable world, you need something more substantial than well-meaning, if infantile, thoughts. Well-funded and profitable energy and defence industries matter, if an industrial nation is not to be beholden to others, or in the worst case, destroyed. The shipping industry is, as usual, rather behind the curve in any fight-back against the sheer nonsense eructed by the high priests of environmental, social and governance matters. There is, of course, no cost whatever when a prominent shipper declares righteously that it intends to favour only sustainable ships for the carriage of its goods. It burnishes its reputation in the market place and furrows the brows of those operating ships, who regard this as just another set of hoops they are forced to jump through, as they provide the means for feeding the world and keeping its lights alight.
One does not have to probe too deeply to discover a great deal of hypocrisy behind the façade of corporate righteousness. How many of the shippers who wag their fingers at the shipping industry about their need for better ESG will stand close scrutiny about the way in which they treat their own workforces, export their own emissions and manage to trade with exceedingly nasty regimes? How can banks, which let us remind ourselves, through their greed and incompetence, caused an economic disaster of epic proportions in 2008, dare to lecture shipowners about environmental issues, well beyond their technical expertise?
Their only duty to their shareholders is to ensure that their lending is sound, not pandering to the noisy activist minority who want industry to cease and all to happily eat their locally grown root vegetables. It is worth pointing out that the causes embraced by the ethically inclined are highly selective, sometimes fluid, according to the trends determined largely by social media.
Now we have history, or at least a highly selective version of it, being manufactured to embrace the exciting opportunities for reparations. There is clearly plenty to be ashamed about in our history with the world’s premier insurer to the fore, heaping ashes on its corporate head, apologising and doling out substantial sums in recompense for all that business they wrote for the slave ships and cargoes which last sailed 200 years ago.
Quite what will be achieved by pandering to the modern cult of historical victimhood, it is hard to determine. There is no logic to an apology when it is made by somebody who is at least five generations away from those who participated in these heinous, but legal acts. And where will it all end, for the millions contributed, from the well-meaning, to those who may, or may not, be descendants of the victims will never be enough? It will only encourage a new generation of specialist lawyers, representing victim groups that have yet to discover their disadvantage thus facilitating the mining of rich seams of past crimes.
The descendants of the “shippers,” which provided the human cargoes from those they enslaved in sub-Saharan Africa, will be unlikely to support the cause of reparations. They probably won’t apologise, either. There are no shipping companies left which could possibly be connected by even the most devious historian to the dark days of the Atlantic triangular trades. There are probably sufficient matters on the maritime agenda, which merit apologies, in the eyes of the perpetually offended. Just keep them to yourselves.
Michael Grey is former editor of Lloyd’s List.
2. IMRF safety initiative
The International Maritime Rescue Federation (IMRF) has announced the launch of its #SaferSAR initiative, which will look to enable global search and rescue (SAR) organisations to better collect, analyse and share maritime SAR incident response data in a bid to enhance future maritime SAR response operations.
The initiative, which is being funded by Lloyd’s Register Foundation, will encompass a 12-month feasibility study for a globally accessible platform that SAR personnel and organisations can use to share lessons and best practices identified in SAR response, incidents, accidents and exercises to improve safety at sea.
“All leading marine accident investigation branches, like the United Kingdom’s Marine Accident Investigation Branch or Germany’s Bureau of Maritime Casualty Investigation , as well as SAR organisations and government bodies, analyse and publish reports on maritime incidents and lessons learnt. However, there is no global system that collates this SAR data, analyses it for trends, patterns, or particular safety concerns and then disseminates these findings more widely,” said Caroline Jupe, CEO of the IMRF.
“While SAR delivery ranges from country to country and organisation to organisation, at its core the principle remains the same: saving lives and rescuing people in distress in the world’s waters. By sharing data and experiences more effectively, global SAR organisations can develop greater understanding and safer operations to drive that principle. This way the global community can also assist organisations that do not yet have the adequate resources to collect such information themselves, by providing information on identified safety risks,” she added.
Olivia Swift, Senior Programme Manager at Lloyd’s Register Foundation, said, “Global safety challenges around maritime activity are vast, and it is vital that the maritime sector has access to the best possible information on evolving risks and how to mitigate them. We are pleased to partner with the IMRF on the #SaferSAR initiative to help SAR organisations reduce these risks and enhance the safety of the maritime sector more widely.”
The IMRF will work closely with a number of key industry stakeholders and SAR organisations during the study, including its own membership of more than 120 SAR organisations, governmental and non-governmental bodies, and service providers from over 50 countries.
In the first phase of the initiative, information and views are sought on sharing safety data in SAR organisations. Readers can fill in the baseline survey: https://www.surveymonkey.com/r/saferSAR.
To find out more about the IMRF’s #SaferSAR initiative, click here: https://www.international-maritime-rescue.org/safersar.
3. ETS financial exposure
Albrecht Grell, co-Managing Director of OceanScore says in a viewpoint piece that shipping companies are facing significant financial exposure from introduction of the EU Emissions Trading System (EU ETS) next year that will increase balance sheet risk, further fuelled by carbon price volatility and the threat of fines for non-compliance. The big question is: who will foot the bill?
And that bill will be substantial. In 2022, the maritime industry generated CO2 emissions of 126m tonnes from voyages to, from, between and within European ports that would have resulted in the need to surrender 82.7m EU Allowances (EUAs), or carbon credits, under the EU ETS, equating to a total cost of €6.5bn based on the current price of €78 per EUA that corresponds to a tonne of CO2.
This figure is based on full implementation of the EU ETS in 2026 after a three-year phase-in period, with 68% of emissions last year generated on voyages into or out of EU ports, which will incur costs for 50% of emissions, and the remaining 32% between or within EU ports that are liable for 100% of emissions.
Container shipping, not surprisingly, will account for the largest part of the industry’s total emission costs at around 28%, followed by the Ro-Pax segment with 14%, while bulk carriers and tankers are set to carry around 11% apiece, according to OceanScore analytics based on EU MRV data.
However, on a per-vessel basis, it is cruise and Ro-Pax ships that will have to bear the largest burden with annual EUA costs for the respective vessel type estimated at €2.8m and €2.5m. By contrast, the average bulker – while being the largest segment with 30% of all vessels in the EU ETS regime – will only see EUA costs of €208,000 annually.
The sheer size and hotel load of the cruise sector and the deployment patterns and speeds of Ro-Paxes have a significant impact on their carbon footprint, with these vessels accounting for nine out of 10 of the top contributors to emissions under the EU ETS with over 100,000 tonnes of CO2 per vessel annually. The highest emitter in European waters is a cruise vessel with 134,000 tonnes of CO2 emissions per year.
At a country level, given fleet structure and typical voyage patterns, the shipping industry in Turkey, for example, would be required to buy and surrender EUAs for a total of €200m, which translates into nearly €400,000 per vessel.
Each shipping company, as the Document of Compliance holder or vessel owner (EU regulation on the ETS responsibility is still in the process of being finalized), must determine the volume of EUAs to be purchased and surrendered to compensate for its emissions in any given year based on MRV data.
The overall cost will be largely dictated by the EUA price that historically has proven highly volatile. While it has dropped to €78 in recent weeks, the price is set to be driven upwards over time due to high demand and an annual 4.3% reduction in the number of available allowances under the cap-and-trade system, incentivising investments in efficient operations, carbon reduction technologies and alternative fuels.
Furthermore, there is the risk of penalties for failing to surrender the required number of EUAs, with a fine of €100 per allowance in addition to the cost of acquiring additional EUAs to make up the shortfall. Failure to comply on any vessel for more than two years running could risk an EU trading ban for the entire fleet.
A key factor for shipping companies in tackling EUA liabilities and risks is an efficient EU ETS management system with accurate tracking of emissions data, both to determine the correct volume of allowances required – also covering for offhire and periods of unemployment, as well as considering all the exemptions, discounts and regulatory details – and ensure correct allocation of EUAs to charterers (based on the EU’s ‘polluter pays’ principle) and owners with proper monitoring of all EUA provisions, open positions etc.
A solution to efficiently manage these processes and assure transparency and control is a vital prerequisite to mitigating the inherent risks of the EU ETS regulation to a shipping company. Any such system will need to be based on solid data to reduce the risk of disputes between charterers, owners and managers.
A whole range of solution providers have sprung up recently, from MRV verifiers to vessel performance management solutions providers to consultants. Most of these systems provide data at a level of granularity and data quality that can serve as input into an integrated ETS management process, with solution-specific issues remaining to be compensated for.
Shipping companies will need to set up so-called Union Registry accounts to receive, buy and manage EUAs, and to later surrender them to the respective authorities. Setting up these accounts as well as getting access to EUA trading solutions via banks or brokers will be necessary. This requires having EUA accounts in Europe and monitoring these, putting in place an EUA trading solution and managing potential disputes in the process.
Clearly, reducing emissions at the operational level is another means of cutting EUA costs exposure but the industry has so far been able to make lacklustre progress in this area, with a reduction of only 0.14% for ships in EU waters since 2021, driven by fewer vessels sailing fewer nautical miles.
Emissions per nautical mile actually increased by 3.09% last year, driven by changing operational patterns and higher speeds in some segments – outweighing the many efficiency-oriented measures put in place in recent years. Still, emissions of 411 tonnes of CO2 per 1000 nautical miles are way below any alternative transport option, testament to shipping’s efficiency.
In the bigger picture, the EU ETS appears well designed and is leading shipping in the right direction. The current price of EUAs adds more than 50% to the cost of bunkers.
As a result, the competitive advantage with newer, more efficient tonnage versus less efficient tonnage will increase, impacting the chartering market, the second-hand market and deployment patterns. The upcoming regulation will enhance business cases for energy-saving projects, improved operations and, in the long run, for cleaner fuels as well.
Analysis indicates that shipping companies are correctly focusing on increased efficiency, making fears of substantial evasive behaviours seem unjustified, so far at least.
The EU ETS regime will further accelerate the trend towards digitalization and data transparency. In the end, the winners in the EU ETS regime will not be those able to buy EUAs at a 10cents discount but those that are able to efficiently manage their related processes and risk exposure.
4. Claims recoveries
Securing an equitable share-out of the proceeds – often millions of dollars – of third-party recoveries following marine casualties demands exceptional care, practitioners were reminded at a market briefing in London.
“Recoveries – are you missing out?” was the challenge in the title of a presentation by the speaker, John Thompson, Fellow of the Association of Average Adjusters, at the seminar, organised this month by the Association in co-operation with the International Underwriting Association.
Thompson highlighted the complexities around the right to proceeds, including interest and costs, and how recoveries can be shared between the concerned parties.
He focused on common marine policy provisions and relevant case law on who should receive credit when a recovery is obtained from a third party.
The event attracted a strong audience of marine specialists in-person and online, and several attendees were quick to congratulate Mr Thompson on what one called his “terrific presentation” spanning so many aspects of recoveries.
In English law, the doctrine of subrogation applies when the insurer has paid a claim (section 79 of the Marine Insurance Act 1906). Mr Thompson noted that while insurers tend to take an active role in assisting the insured in seeking a recovery, it is only when the principle of indemnity has operated that an insurer gains the right to be credited with some part of the recovery.
Thompson, who is associate director in the Liverpool office of Richards Hogg Lindley, further underlined that insurers are generally entitled to recover only up to the amounts paid, plus interest and costs. This follows the approach taken in the case of Yorkshire Insurance v Nisbet Shipping (1961) where insurers, following a collision, paid a total loss claim for the vessel’s insured value which was slightly less than its actual value. Due to a revaluation of exchange rates, the recovery gained from the other vessel was significantly greater than the value of the vessel and claim paid, and the Court held that the insurer was not entitled to receive more than they had actually paid.
When a recovery is not for the full amount of the claim, from an English law standpoint, reference can be made to section 81 of the Marine Insurance Act 1906 which deems that where the assured is insured for an amount less than the insurable value, the assured is viewed as an insurer in respect of the uninsured balance. This is illustrated in the case of The Commonwealth (1907) where it was found recovery of an amount for less than the amount of the loss should be apportioned in the ratio the insured value bears to the insurable or agreed value of the subject matter insured.
Care must however be given to the policy conditions. Different policy regimes have different approaches, with for example Clause 12.3 of the Institute Time Clauses – Hulls (1/10/83), giving priority, or “first bite” to the insurer in respect of the principal proceeds of the recovery – essentially the insurers get first bite at any recovery up to the amount paid, with the assured then only receiving credit for anything left.
This position changes in other policies, such as the Nordic Plan where Clause 5-13 specifies that recoveries are to be apportioned between the insurers and assured in proportion to the loss that each has carried, whether a full recovery of claim is made from a third party or not. Commonly this means that where a claim has been paid by insurers after application of deductible, the assured will participate in the recovery from the third party in the proportion that the amount of the deductible bears to the amount of the compensation paid by the insurer.
A similar position is reflected in clause 49 of the International Hull Clauses 2003 where recoveries are to be apportioned between insurers and the assured in the same proportion that insured and uninsured losses bear to the total insured and uninsured losses. The American Institute Hull Clauses are silent on how recoveries should be apportioned and follow the position at law. For English law, this means an approach is taken like that in the Nordic Plan and Institute Hull Clauses 2003.
Interest can be a key component of any recovery, Mr Thompson emphasised. Clause 12.4 of the Institute Time Clauses – Hulls (1/10/83) provides insurers can recover more than they have paid out. Interest is generally apportioned between the assured and the insurers, considering the original amounts paid and dates when they were paid. Care does need to be taken when a recovery is for General Average (GA) including GA interest as it is then necessary to ensure proper credit is given to the insurer from the point GA interest starts to accrue.
On the question of collision recoveries, Thompson noted this was probably a topic for another seminar but commented that from a vessel-to-vessel point of view, single liability settlements work perfectly fine; but without the inclusion of a cross liabilities clause, the way the claim is placed on policies, and any recoveries are allocated, can be seen as unfair. The cross liabilities clauses found in most policies open up the calculations to allow losses and recoveries to be correctly attributed to concerned parties.
Thompson noted that recoveries might also sometimes be required as between different kinds of policy. A common example of this is where allowances for operating costs for removals to repair yards and in GA situations are made and claimed on a Hull & Machinery (H&M) policy, when similar operating costs are also deemed to have been included in a Loss of Hire (LOH) claim. If proper credit is not given to the LOH insurance, then a double indemnity situation can occur. While provision for this can be found in Clause 16-16 of the Nordic Plan the position is not 100% clear in English law or ABS LOH conditions, but the view commonly taken is that hire is divisible, and that wages and operating costs etc are part of the rate of hire, so there is a need for them to be credited back to LOH insurers to avoid a double indemnity.
As for the matter of costs, Thompson advised that generally each party should bear the costs relating to their own recovery of claim and that this appears to be a fair approach. He noted that although the ITC 83 clauses are silent on how costs of making a recovery should be dealt with, the Nordic Plan and International Hull Clauses 2003, have provisions to that effect. He added that a specific way of dealing with collision costs, some of which have to be charged to the recoveries made and some as an actual claim on policy, can be found in the Association of Average Adjusters’ rule of practice A8.
He concluded by considering where average adjusters fit in; noting that adjusters can carry out the essential task of independently preparing, calculating, and stating the division of recoveries between different heads of claim, including GA, particular average, collisions, loss of hire, and an assured’s uninsured losses.
During questions and comments, a member of the audience urged care to check whether any elements in a claim might be time barred.
Burkhard Fischer, chairman of the Association of Average Adjusters, who presided at the meeting, said the question of recoveries could become very complex in relation to container and other cargo fires. In many cases the ‘bad’ container can be identified quickly, suggesting that the party to blame for the outbreak of the fire could be a cargo interest. A scenario could be that other cargo interests affected by the fire or by firefighting efforts would go against the shipowner or immediately against the shipper of the suspect cargo. In reality, there were more complicated procedures involved as for instance cargo owners who suffered sacrifice losses, or their subrogated insurers, had a right to recover losses in GA.
“As the average adjuster,” said Mr Fischer, “you are in the position that somehow you have to finish the GA adjustment bearing in mind there could be an ongoing action against the third party to recover loss. You have a whole level of redistribution of losses within the GA regime which has to be considered within the recovery action, and that makes it very complicated.”
5. Supply chain safety
The seven industry bodies dedicated to container safety, collaborating as the Cargo Integrity Group, have highlighted an independent study carried out by researchers at Italian University Politecnico di Torino into shipper and forwarder application of the CTU Code, the Code of Practice for Packing of Cargo Transport Units. The 2023 survey yielded encouraging signs of adoption and highlighted several convincing arguments – including financial benefits for its use.
The survey highlights multiple benefits to CTU Code users including:
- Improved safety, reputation and supply chain coordination
- Decreased cargo damage, environmental impact and operational inefficiencies
- Those using the CTU Code incurred no extra costs in employees, contractors, or vehicles
- Any increase in loading and waiting times were typically offset by CTU Code related efficiencies overall
- Annual costs and penalties reduced from €670,000 pre-implementation of the Code to €13,000 post-implementation
- Extra costs as a percentage of revenue reduced from 37% to 10%.
“The application of the CTU Code to cargo loading and transportation processes can increase the safety level of transport activities, and also improve business processes and competitiveness. The results show that the use of the CTU Code provides an increase in safety with a drastic reduction of loading accidents and damage to goods, as well as important benefits in terms of costs, improved efficiency, corporate image and reduced environmental impact,” the authors said.
Welcoming the Politecnico survey, the CEO of ICHCA, one of the group’s founding associations, Richard Steele said, “As far as we are aware, this is the first example of publicly available empirical evidence about the use of the CTU Code made by forwarders, shippers and others responsible for safe packing. Notwithstanding the regional focus of this particular survey, we believe the results to be genuinely encouraging. They show that good operational management, efficiency and safety are partners, not opposites.”
To facilitate a greater degree of understanding and wider use of what is a lengthy and complex document, the Group has published a Quick Guide to the CTU Code, together with an editable and saveable Checklist of actions and responsibilities for the guidance of those undertaking the packing of cargoes in containers. These materials are now available in all six of the United Nations’ official languages, as well as Italian.
The full results of the Politecnico di Torino’s survey can be accessed here https://www.sciencedirect.com/science/article/pii/S2590198223000738?via%3Dihub
6. Sustainable fund
Law firm HFW recently advised on the launch of the shipping industry’s first sustainable fund.
The fund, named Low Emission Methanol Shipping Company (LEMSCO), was launched by maritime investment advisor ProMarine with an initial portfolio of four methanol-fuelled MR tankers, which were acquired from Proman and Stena Bulk.
It is backed by equity investors and is also financed by a green loan from ABN AMRO.As part of the deal, LEMSCO will benefit from a dedicated supply contract from Proman – one of the world’s largest methanol producers – ensuring that the fleet’s operations are not only cost-effective but also powered by a technology-proven and globally available low-emission alternative fuel.
HFW advised the fund and also supported Proman and Stena Bulk on the transaction. The HFW team was led by Gudmund Bernitz and Katherine Noble.
Gudmund Bernitz, Partner and Shipping Sustainability Ambassador at HFW commented: “Having collaborated on this huge project for over two years, we are very proud to have enabled this landmark transaction which marks a big leap towards the decarbonisation of shipping.”
7. Sales terms and safety
With the primary goal of ensuring the safety of the global supply chain, international freight insurer TT Club draws attention to the critical question of who is initially responsible for the state in which cargo is shipped. The insurer also updates its guidance on correct dangerous goods packing procedures by reissuing its ‘Book it right and pack it tight’ publication.
The intricacies of responsibilities during the transfer of goods internationally are standardly defined by the INCOTERMS¹ that may govern the sale and purchase of the goods. This has a crucial bearing on who has responsibility for certain risks relating to the cargo in transit. TT indicates that a substantial 65% of cargo damage claims can be attributed to inadequate packing and securing in the cargo transport unit (CTU). The question of responsibility for packaging and packing has therefore an important impact on the safety of the supply chain.
“Poor packing practices, including improperly secured loads and mis-declared goods, give rise to the majority of incidents resulting in damage to cargo both on land and at sea, and potentially in injuries or broader incidents. While INCOTERMS seek to standardise the responsibilities and costs between seller and buyer under a sale of goods contract, where the goods are to be transported, such that there is clarity for delivery, the influence on the fulfilment of the transport (or ‘carriage’) contract may be less understood ,” explains Peregrine Storrs-Fox, TT’s Risk Management Director. “There is, therefore a need to increase awareness for those involved in trading goods to ensure that responsible decisions are taken in relation to the physical packing operations or, indeed, placement of cargo insurance.”
When incorporated, INCOTERMS will determine when responsibility, and therefore risk, is transferred from the seller to the buyer for delivery of the goods, which includes not just who is contracting for the transport but also inherently issues relating to packaging and packing. For example, under the “Ex Works” (EXW) INCOTERM, the risk is transferred from the seller to the buyer at the seller’s premises. This means that the buyer assumes responsibility for packing and transporting the goods from that point onward. In contrast, under the “Delivered Duty Paid” (DDP) Incoterm, the seller is responsible for delivering the goods to the buyer’s premises, including arrangements for transport.
“Issues impacting safety within the supply chain are not directly answered by INCOTERMS, and thus the concern. As with much of logistics, the range of practices is complex, but there is silence or insufficient clarity around issues of safe packaging and packing that impacts the interface between the differing types of contracts involved (including sales, financing, carriage and insurance). These terms may mitigate certain risks associated with cargo safety,” concludes Storrs-Fox. “Therefore, businesses engaged in international trade need to consider carefully the implications of the choice of terms of sale, specifically ensuring that packaging and packing are adequately understood to enhance safety.”
Regardless of any sales term that may be agreed, therefore, both parties need to consider responsibly the broader issues. However, TT urges buyers, often also importers, particularly to consider carefully the potential implications of the term selected, not just in relation to the simple division of responsibilities, but also the impact of the condition of the goods at the commencement of the movement on all involved in fulfilling the transport, as well as the wider environment.
Alongside this alert on the influence of this trading scenario may have, TT regularly highlights safety issues arising from inadequate CTU packing processes, most notably in relation to Dangerous Goods. In regard to this critical aspect of international trade, TT has, along with its sister insurance mutual UK P&I, recently published an update to the ‘Book it right and pack it tight’², joint publication, now reflecting Amendment 41-22 of the International Maritime Dangerous Goods (IMDG) Code, which enters mandatory effect on 1st January next year.
This publication also explains the importance of the Code of Practice for Packing of Cargo Transport Units, known as the CTU Codeᵌ and provides the important reminder from caselaw that it is the shipper’s duty to ensure that the carrier is alerted to all the hazards posed by the cargo, even beyond what may be strictly required by the regulations.
TT’s intention in all these regards is to support shippers, forwarders, those who pack CTUs, and all carriers to understand the interplay of differing responsibilities in ensuring a safe outcome for all.
8. IUMI stats
The International Union of Marine Insurance (IUMI) has released its 2023 analysis of the global marine insurance market – the IUMI Stats Report.
This annual document reports on the health of the marine insurance sector within the framework of the global economy, trade and shipping. Data is gathered from a number of agencies including IUMI’s own sources and is analysed and presented with some additional commentary.
Highlights from this year’s report include:
Global marine insurance premiums in 2022 totalled USD35.8 billion- an 8.3% uplift on 2021. The post-pandemic rebound in trade, increased asset values, reduced market capacity and an adjustment in premiums were all likely to have exerted an influence. European markets continued to enjoy growth whilst some Asian markets had slowed due to a range of economic factors.
Ocean hull premiums were reported at USD8.4 billion, up by 5.7% on the previous year. More activity, more vessels, rising values and reduced market capacity were responsible. Claims continued to be low resulting in positive loss ratios for nearly all regions.
Premiums for cargo insurance reached USD20.5 billion representing an 8.3% uptick on last year and continuing the trend for market development in this sector. This was on the back of a post-pandemic rebound in global trade. Loss ratios had returned to more normal levels and for 2022, had started at their lowest point since 2015.
The offshore energy sector continued its three-year run of premium base growth reporting USD4.1 billion for 2022, an increase of 7.3%. The uptick in oil prices was largely responsible, translating into increased offshore activity and a rise in average day rates. Losses had remained relatively low and recent years’ loss ratios were currently positive.
The report also provides an update on IUMI’s Major Claims Database. Cargo claims are now being published for the fourth consecutive year based on 13 data fields. Major losses are analysed with respect to loss severity, frequency, location and cause.
Commenting on this year’s report, IUMI Secretary General, Lars Lange said:“Our annual Stats Report has become a much-anticipated descriptor and analysis of the current health of the marine insurance market. This year, it is gratifying to note that all business lines have performed relatively strongly showing an increase in the global premium base and a better performance in terms of loss ratios. This is largely off the back of a post-pandemic rebound in global trade but can also be attributed to more disciplined and effective underwriting. Insurers are continuing to operate in a relatively low claims environment, which is good news for all concerned, but we must be watchful for a return to more usual loss levels now that shipping and offshore activity has normalised following Covid.”
“Our report is the product of our Facts & Figures Committee together with input from a number of valued partners. We also publish data from our Major Claims Database which is an ongoing project in partnership with the Boston Consulting Group. I thank all those involved in producing this year’s report”.
The full report is available to download from the statistics section of the IUMI website: https://iumi.com/statistics/public-statistics
9. Fire suppression
Global Survival Technology solutions provider Survitec recently released the results of pioneering tests conducted on high-pressure CO2 fire extinguishing systems aboard three Floating Production Storage and Offloading (FPSO) vessels.
The full-release tests, believed to be the first to be conducted on vessels of this type and of such protected volume, confirmed the value to shipyards and ship operators of live testing to verify on-paper or on-screen predictions of fire system performance.
Michal Sadzynski, Product Manager, Survitec, said: “The important take-home for the industry here is that some of the protected spaces did not pass the tests the first time. This suggests there may be other vessels and offshore structures out there with potentially underperforming CO2 fire extinguishing systems in fire-critical areas such as switchboard rooms, engine rooms and generator houses.”
The tests were conducted as per NFPA’s (National Fire Protection Agency’s) NFPA12 Standard on Carbon Dioxide Extinguishing Systems, published in 2011, allowing a calculation-based prediction of system performance. This was upgraded by NFPA in 2018 to a much stronger standard and regulations advocating live, full discharge testing of all cylinders along with the constant monitoring of CO2 and oxygen concentrations over a 20-minute period in all protected spaces. Survitec has designed and released a new set of test protocols (HPCO2) around the most recent annexes to the NFPA12 standard, with these initial tests on the three FPSOs conducted in a variety of scenarios and vessel operations from moored in the oil field to within the shipyard delivering the conversion.
“The devised live test comes as close as is practical to creating the demands of an actual fire aboard. On large vessels like FPSOs, it involves opening hundreds of cylinders – for example, in the engine room of one of these FPSOs, 315 cylinders were released,” revealed Sadzynski.
“We have found that the release of large amounts of highly pressurised gas into a partially closed space usually uncovers some engineering challenges within the enclosed space, rather than with the delivery system itself,” he said.
Survitec saw this most clearly in the switchboard room test aboard the first FPSO to be tested, where the space was gas-tight due to the unrelated system requirements for the air conditioning system.
During the live test, the rapid pressure increases in the space found the weakest point, which in this case was the door, causing damage. This damage reduced the gas integrity of the space, allowing CO2 gas to escape, leading to test failure.
On the second FPSO, another key finding was that a machinery space or compartment cannot always be assumed to be airtight. In one test, the gas collecting inside the space started to escape through leaks, leading to a drop in concentration and test failure.
As Sadzynski explained, “There are often relatively simple and inexpensive fixes in these scenarios. Overpressure in air-conditioned spaces can be resolved by implementing a time delay on one of the fire dampers. This allows over-pressurised gas to escape from the space and then closes when the pressure becomes stable, thereby keeping the CO2 concentration at the required level. This was the solution for the switchboard room on the first vessel to be tested.”
There is, of course, an expense associated with full-release testing as the CO2 cylinders are completely exhausted in the test and require replacement to recharge the system. Additionally, CO2 is not a human-friendly gas, so if the vessel is in operation, all personnel or crew need to be relocated to a safe space. But as Sadzynski acknowledged, the consequence of operating a system that fails to perform in a real-world scenario could be catastrophic.
“It is important to emphasise that designing a vessel is a highly complex process, encompassing hull structure, compartment layouts, ventilation systems and so on, which all interlink with the design of the fire suppression systems. As the build progresses, any amendments or deviations that are introduced can have unforeseen consequences that impact system performance – the most critical being the failure of a fire extinguishing system during emergency firefighting operations.
“This study shows very clearly the limitations of modelling the performance of a fire suppression system within a virtual environment at the vessel design stage versus a real-world test.
“For safety-critical vessels in particular, such as FPSOs, tankers and gas carriers, we encourage shipyards and owners to consider additional safeguards, such as live discharge testing, as proposed in the new guidelines. The guidelines are there not only to protect lives better but also assets. The data collected from these tests are invaluable in helping us design even better and more efficient fire suppression systems.”
10. Ship education
The Korean Register has officially launched KR-Real360, a 360-degree XR (eXtended Reality)-based ship education and training programme. KR-Real360 has been developed to provide users with the educational information necessary for ship operation and maintenance using the latest XR technology. Users can effortlessly locate educational resources, such as operation manuals, survey data, and checklists, available in diverse formats including images, text, PDFs, and videos within the ship’s virtual reality environment, crafted using 360-degree panoramic images.
In addition, other convenient functions such as ship touring, XR-drawing matching, customized route setting and TTS (Text To Speech), which converts text to voice, are included, and they can be easily customized according to users’ convenience and preference.
With the rapid pace of digitalization and decarbonization in the maritime sector, there is an increasing need for familiarization training to keep pace with the constantly evolving onboard operation systems. It is expected that KR-Real 360 will be a useful tool to respond quickly to changes while significantly complementing the traditional ship education and training system.
KIM Daeheon, Executive Vice President of KR’s R&D division, commented, “We tried to make KR-Real360 more real and vivid by showing the realistic appearance of ships. KR will work to provide the best technical support to assist the maritime industry in applying the latest technologies promptly in line with the digitalization and decarbonization trends.”
Information on KR-Real360 can be found on the KR SeaTrust website (https://www.seatrust.kr).
11. Battery fires
In an opinion piece to be found on the Gard website, industry players are warned that the risk of EV battery fires should not be downplayed.
They can be hotter, more toxic, quicker to spread – and possibly more explosive. Most experts agree that lithium battery fires are different and that the risks for people on board are serious. The industry needs to align and collaborate more to address the issue.
Lithium batteries and the potential fire hazard they pose in electric vehicles (EVs) during transportation by sea, have become a “hot topic” in the industry. Awareness is increasing, but discussions remain as to how risky this cargo really is. In this article, an overview is given of the main concerns and reasons behind them. For more details see the website.
12. Anchoring issues
The Maritime and Port Authority of Singapore (MPA) will progressively implement the Just in Time Planning and Coordination Platform (JIT Platform) to tankers berthing at the energy terminals and to all vessels calling the anchorages in Singapore from January 2024 Britannia P&I Club has reported.
MPA states that the JIT Platform provides advanced information of the vessel schedule in port, allowing vessels to maintain an optimal speed to arrive at the Port of Singapore, reducing the time at anchorages prior to berthing. Marine service providers can make use of the advanced and real-time information of the vessel schedule to plan and optimise the deployment of the port resources such as pilotage, towage, bunker tankers and supplies more effectively.
Find out more information here.
Britannia also points to an increase in detentions has been reported in Off Port Limit (OPL) areas due to vessels anchoring without local authorities’ permission, with detentions extending beyond the twelve nautical mile zone. Ongoing territorial disputes among Indonesia, Malaysia, and Singapore highlight the need for vessels to secure approval from the respective local port authority.
Ships are advised to obtain clearance through local agents and maintain active AIS broadcasting. If detained, there are no established release guidelines, potentially causing indefinite delays. Local authorities have expressed concerns about navigational safety when vessels drift or slow down, impacting traffic flow and port approaches.
IMO Circular SN.1/Circ.282 reinforces restrictions on anchoring in specific areas.
13. Seafarer population research
The Maritime Charities Group is commissioning new research on the size and demographic profile of the UK seafarer population. Information about working and former seafarers is vital to the work of MCG members and their partner organisations. It helps them to understand the welfare needs, locations, challenges and changes facing seafarers and their families and informs all aspects of their work. From grant-making to service provision, this data will enable the maritime charity sector to make more informed decisions from now to 2040.
Announcing the launch of a call for proposals, MCG Chair, Dr Tim Slingsby said:
“This new study is a key element of MCG’s programme for the coming year. It will update our existing datasets, building on the work we first undertook in 2007 and then updated in 2015. These studies showed that despite the fall in the number of working and former seafarers, the demand for charitable services and support was not likely to decline. It’s nearly 10 years since we last looked at seafarer demographics and we need a more up-to-date picture, including the impact of the pandemic, to help us understand the potential demand for the next decade and beyond. We are now calling on research teams to respond to our call for proposals.”
The new MCG study will focus on the UK’s Merchant Navy and fishing fleet and their dependants and will include both working and former seafarers. A comparable study is being carried out with the UK’s Royal Navy and Royal Marines communities by MCG members Greenwich Hospital and the Royal Navy and Royal Marines Charity, in partnership with the RAF Benevolent Fund. Together these two pieces of work will provide the sector with the data it needs to plan future services.
Download the full research brief here
Reflecting on the value of past research, MCG member Vikki Muir, Head of Charitable Giving at Trinity House, said: “As with any charity that wants to be as effective as possible with the resources to hand, Trinity House depends on a robust, up-to-date and detailed understanding of the needs of its sector. Site visits with beneficiaries provide an invaluable connection on the ground, but we also need high-level data to help make decisions about how we manage our giving in a sector that changes and demands adaptability. We look forward to the new MCG study and the insights it will yield.”
MCG member Deborah Layde, Chief Executive at The Seafarers’ Charity, added: “The Seafarers’ Charity is the largest independent grant funder of maritime welfare services around the UK, investing over £2m every year into the sector. We look forward to this essential research providing accurate demographic data which will inform our long-term strategic funding of more than 70 charities delivering a wide range of welfare services for seafarers and their families.”
And Sharon Coveney, Deputy Chief Executive of the Merchant Navy Welfare Board, the umbrella charity for the UK Merchant Navy and Fishing Fleets and also an MCG member, said: “Without seafarers, the world grinds to a halt. That’s why this new research project is so important. The maritime sector, like many, is still recovering from the devastation caused by the pandemic, the Russian/Ukrainian conflict and the P&O Ferries crisis. These results will help shape the future and ensure the industry meets seafarers’ demands to improve their lives.”
To submit a proposal
Interested research teams are invited to submit a short outline proposal by Monday 27th November 2023. For further information email Ben Gibbons, MCG Manager at firstname.lastname@example.org
Notices & Miscellany
The Mission to Seafarers has revealed the winners of its annual Seafarers Awards in Singapore.
Coming in the same week as the latest Seafarers Happiness Index results (run by the Mission) showed a continuing decline in seafarers’ levels of happiness, this underpins the increasing need for the Mission’s services. Recognition of seafarers’ welfare initiatives is of vital importance to raise standards across the board at a time when seafarers continue to face unprecedented challenges, and this only emphasises the importance, more than ever, of recognising those who go above and beyond to support their welfare.
The Awards Ceremony highlights the value and importance of seafarer welfare and honours individuals and organisations that have made significant contributions to enhancing the welfare and well-being of seafarers worldwide.
Maritime industry professionals once again gathered in their numbers for the 6th annual gala dinner which has become a focal point in the Singapore maritime calendar. The event was held at the prestigious Fairmont Hotel, with 500 people in attendance. The electric ambience in the room not only highlighted that the industry thrives on face-to-face contact but also their excitement to celebrate the backbone of the industry – seafarers. Throughout the evening, guests had the opportunity to network with their peers over dinner and drinks as they waited in anticipation for this year’s winners to be announced.
Honouring the commitment to seafarer well-being made by crew, shore staff, and shipping companies around the globe, the award winners for outstanding contributions to seafarers’ welfare are:
Seafarer Award: The seafarer who has made the most significant contribution to seafarers’ welfare.
Winner: Karl Japeth Rosal, Bernhard Schulte Shipmanagement
Highly Commended: Sophia Tan, Pacific Carriers Limited
Shore-Based Award: The shore-based person who has made a significant contribution to seafarers’ welfare.
Winner: Patrick Davies – The Flying Angel Club, Fremantle, Western Australia
Highly Commended: Joan Kwek, Hafnia
Cadet Award: The Cadet or Trainee who has made a significant contribution to seafarers’ welfare either at sea or ashore.
Winner: Dwi Kartini, Hafnia
Innovation Award: An individual or a company who embraced a new programme, project or training which enhanced the welfare of seafarers.
Winner: Hafnia’s Maritime Culture Lab
Highly Commended: Rio Tinto’s Shop to Ship Programme
Rescue Award: The captain and crew who have coordinated a successful rescue operation to save lives at sea.
Winner: Capt. Anil Choudhary and the Crew of Helios Leader, NYK Shipmanagement PTE LTD
Highly Commended: Capt. Ivan Vlasimsky and Crew of LNG Prosperity, Bernhard Schulte Shipmanagement
Secretary General Award: The person or company who has shown sustained efforts to improve seafarers’ welfare at sea or ashore.
Winner: Peter Broadhurst, Inmarsat
Highly Commended: Eduardo M R Santos, Maritime Academy of Asia and the Pacific
A Special Award was added to the Mission’s usual list of six and was presented to Oleg Grygoriuk of the Marine Transport Workers Trade Union of Ukraine. This award was given in recognition of his efforts in leading advocacy for Ukrainian seafarers and their families following the outbreak of the war. Oleg was presented the award by Her Excellency Kateryna Zelenko, Ambassador of Ukraine to the Republic of Singapore.
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(With thanks to Paul Dixon)
Experience is something you don’t get until just after you need it.
It’s always darkest before dawn. So if you’re going to steal your neighbor’s newspaper, that’s the time to do it.
Always remember you’re unique, just like everyone else.
Never test the depth of the water with both feet.
Timing has an awful lot to do with the outcome of a rain dance.
If you think nobody cares if you’re alive, try missing a couple of car payments.
It may be that your sole purpose in life is simply to serve as a warning to others.
Before you criticize someone, you should walk a mile in their shoes. That way, when you criticize them, you’re a mile away and you have their shoes.
If at first you don’t succeed, skydiving is not for you.
Don’t squat with your spurs on.
If you tell the truth, you don’t have to remember anything.
Some days you are the bug; some days you are the windshield.
Good judgment comes from bad experience, and a lot of that comes from bad judgment.
Duct tape is like the force: it has a light side and a dark side, and it holds the universe together.
There are two theories to arguing with women. Neither one works.
Experience is the sinking feeling that you have made this mistake before.
Never miss a good chance to shut up.
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