Salvors busy yet again

WRECKS REMOVED

SALVAGE • CONDUCTING MARINE SALVAGE IS NOT ONLY DANGEROUS FOR THE PEOPLE INVOLVED, IT IS ALSO FINANCIALLY PERILOUS – AND 2020 WAS NOT A GOOD YEAR FOR SALVORS

THE WORLD’S SALVAGE capacity is under threat after an alarming drop in the sector’s revenues last year. Gross revenue fell from $482m in 2019 to $301m in 2020 as the number of services provided by members of the International Salvage Union (ISU) dropped from 216 in 2019 to 182. Revenue through Lloyd’s Open Form (LOF) cases actually increased from $49m in 2019 to $60m.

“The 2020 ISU statistics show a 38 per cent fall in the income received by our members compared with the previous year,” notes ISU president Richard Janssen. “It is the dramatic fall in wreck removal income that stands out in these statistics - a 65 per cent drop. In recent years, wreck removal income has represented roughly 50 per cent of our members’ income but in 2020 it accounted for just under 33 per cent.

“The economic pressures on our industry continue and we know that on an annual basis activity and income for our industry is variable. The general trend towards a smaller number of larger and more complex cases enhances that annual variability,” Janssen adds. “There has also been some structural change in the industry in the last 18 months with the loss of a major player. That may have had an impact on these statistics but it is not possible to say for certain or to what extent.”

PAYING FOR SAFETY “What we can say with confidence is that ISU members have continued to provide vital services to shipowners and insurers,” Janssen continues. “And, taken alongside the ISU’s pollution prevention statistics, these numbers still demonstrate an active industry which year-in, year-out provides in the region of 200 services to vessels in trouble.

“Professional salvors protect the environment, reduce risk and mitigate loss. They also keep trade moving - demonstrated so clearly in front of the world’s media with the refloating of the containership Ever Given in the Suez Canal this year. But there also has to be a concern about the ongoing provision of salvage services globally and the long-term viability of the industry as it is today. ISU continues to actively engage with shipowners and insurers to ensure we are aligned with them on the future challenges they are likely to face.”

To be sure, the maritime industry will inevitably need the services of salvors in the future, as incidents continue to occur, unpredictably but repeatedly. To ensure that salvage capacity is available when needed – and when it is needed, it is needed quickly – salvors need to be fairly recompensed if they are to be able to have the necessary equipment on station around the world. That is why they appreciate the certainty offered by the LOF contract as well as the Special Compensation (Scopic) clause that confers additional recompense for activities involving the prevention of pollution.

Meanwhile, wreck removal has become an increasingly important source of income for ISU members, though last year the number of services provided fell by almost one half from the 2019 level, when 101 operations were conducted. Gross income dropped from $284m to just $98m in 2020, although the timing of income is linked to contracts that may not be signed in the year work was carried out. Care has to be taken in interpreting those data, though it is clear that salvors’ fortunes are tied to an activity that provides precious little predictability. www.marine-salvage.com

SALVORS PLAY A VITAL ROLE IN THE SAFETY OF LIFE

AND CARGO AT SEA BUT A SHARP DROP IN THEIR