toaugsept2012fullres

TANKEROperator AUGUST/SEPTEMBER 2012

www.tankeroperator.com

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Contents 04

Markets Mark-to market valuations

08

News Focus New IACS chairman airs his views

12

Germany Report GL’s upgraded Aframax Government funding Marenave in the black Autopilot saves money SMM preview

31

Commercial Operations Helping to reduce costs C/P wording warning CONWARTIME examined Be aware of time bars

40

Shipmanagement Effective internal audits Shipboard software Wallem joins Nanjing Tankers Shipmanagers help lenders Increasing garbage problem ECA voyage planning

49

P&I EC gives IG the nod

51

Piracy Effective rules needed

52

Technology 52 Ice Class Where is the Polar Code?

Arctic shipping development Help with NSR transits

60 Technical Focus MAN’s engine hardware Pump upgrades save money 64 Tank Servicing Benign crude in tanks Bilge level switches Enclosed space video

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Front cover At SMM, Becker marine will be showcasing the company’s latest steering gear, which is claimed to be the world’s largest. In addition, Becker will be showing its various rudders and ducts aimed at cutting fuel costs by up to 8%.

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August/September 2012

TANKEROperator

01

COMMENT

Why do we go to exhibitions?

A visitor to a shipping exhibition from Mars –and there might well be soon given that a craft has landed on the planet – could well be lured into a false sense of security.

Upon viewing the many halls stacked with booths of all shapes and sizes and covering nearly every segment of the industry, plus the shear volume of people encountered in the hallways, he or she would automatically conclude that there is nothing wrong with this industry.

Why is it then that during one of the worst recessions on record, shipping exhibitions flourish? Is it to do with the often held belief that during bad times, companies should expend more energy on sales and marketing?

So why do shipping exhibitions draw the crowds, pack the hotels, bars and restaurants in the host city, despite inflated hotel prices and the currency fluctuations, especially recently? Is it the networking opportunities where company representatives can talk to their clients face to face and market their wares to potential clients in a selected shipping hub?

In Europe, the exhibition concept really took off in the 1970s aided by increased and cheaper air travel and better facilities in terms of hotels and exhibition centre services. They were often organised by leading shipping publishing houses who saw a market to be exploited.

Although there are a few exhibitions, which have come and gone, the ones that we now think of as the majors, have since flourished.

Asia catching up Asia is following and from a small beginning is now starting to challenge the might of Europe in staging events. There are also specialised exhibitions and conferences aimed at a certain segment of the industry, for example, offshore, gas, workboats and tugs. They have also built up a loyal following.

However, it is the majors that still hog the limelight, as where else can you see up to 50,000 shipping people in just three or four days. By the majors, we mean Nor-Shipping, Posidonia, SMM and possibly Europort in Europe, while Marintec, Kormarine and the Singapore expos, represent the major Asian input today.

At the beginning of September, we are all packing our bags for Hamburg, Tanker Operator included. It is time for SMM (see page 21).

German companies have has always been at the forefront of technical innovations and in the main port cities, shipmanagement concerns have flourished under the weight of tonnage built and ordered under the KG investment system, as have the service companies who look after

vessels calling at the ports, some of which are among the largest in Europe.

I suppose one of the key talking points at the exhibition and the conferences will be finance, or lack of it. With the KG system all but dead, German shipping companies are looking at other means of financing their assets. This should be ‘meat and drink’ to the SMM Ship Finance Forum, which will no doubt see a good attendance.

Energy efficiency on board ships is another hot topic as the day of the eco-ship has arrived, mainly driven by international and national regulations, plus the constant efforts of the IMO to stay one jump ahead of regional regulators.

No doubt the arguments will rage over the merits of distillates, scrubbers, or the use of LNG as fuel, to cope with the worldwide phased lowering of emissions soon to be implemented. It seems that this subject is dividing the industry with diverse opinions regularly aired.

Security hall Maritime security has also come to the forefront in the past few years and to encompass the ever growing number of security forms cropping up, the SMM organisers have dedicated a hall entirely to their needs, as well as hosting a conference on the subject.

Similar to most major exhibitions, SMM tries to pack each segment of the industry into its own dedicated area, or hall, or makes use of national pavilions. For example, we will see all the machinery, communications and navigation IT, in their own halls. What a company makes of being next to their rivals is anybody’s guess. However, it seems to work.

The big spenders in terms of exhibition space tend to be the Asian shipyard associations, in particular the Chinese, South Korean and Japanese. With new orders tight, the competition to have the best display will probably be even more severe.

Certainly the bars and restaurants around the Alster Lakes, the River Elbe and other popular areas of Hamburg, will be hoping for a bonanza.

But will the visitors spend money?

This was the question posed at London’s recent Olympic Games and by and large, they did, perhaps not sufficiently in the retail areas, but on general living expenses.

I was pleasantly surprised by the activity surrounding this year’s Posidonia exhibition, despite being held at a time of the playing out of a Greek tragedy. I hope the same can be said for Hamburg upon my return.

TO

TANKEROperator

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Vol 11 No 8 Tanker Operator Magazine Ltd 2nd Floor, 8 Baltic Street East London EC1Y 0UP, UK www.tankeroperator.com

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TANKEROperator August/September 2012

INDUSTRY - MARKETS

Mark-to-market valuation challenges “How confident are you that you know the true value of your business on any given day?

Are you 100% certain that you have the means to accurately calculate your fleet’s mark-to-market value?” avier Navarro, freight risk solutions manager at Triple Point Technology said that if you hesitate to answer these questions, your company’s future may be at risk.

In the shipping industry, understanding the true market value of a fleet is the difference between sinking and swimming. Volatility related to the number of available cargoes and vessels, operating expenses, such as bunker fuel costs and other variables mean that a fleet’s value has the potential to swing wildly from one day to the next.

Performing frequent mark-to-market (MTM) valuations is an integral part of doing business and is critical to ensuring the financial health of a commercial shipping operation. However, due to the highly unpredictable nature of the industry, the complexity of calculating freight rates and flaws inherent in popular valuation methods and tools, companies often end up with inaccurate numbers. This provides a false picture of financial standing that can result in lost profits, faulty decision-making and ultimately the demise of an entire business.

Fully understanding the challenges associated with calculating accurate MTM valuations and how to address them is critical to staying afloat in the cut throat shipping industry.

J

Adjusting freight rates The first of these challenges is adjusting freight rates. The value of commodities in most markets is transparent and easily determined at any point in time by looking at an index. But the freight rates that play such a large part in determining a fleet’s MTM valuation are not so clear.

The indices for freight rates, provided on the Baltic Exchange, only take into account certain standard vessel sizes and a limited number of standard routes. In reality, very few vessels are a standard size, or perform standard voyages. In order to determine accurate freight rates, operators and charterers have to use complex formulas to adjust the indices to account for the proper vessel sizes 4

and routes.

This is frequently done using antiquated spreadsheets, a method that is prone to human and formula errors that lead to inaccuracies affecting the MTM valuation of the entire portfolio. Overvalue the fleet, and there will be a very rude awakening when an unexpected event requires funds that were assumed to exist, but are nowhere to be found.

The second challenge is gaining a clear picture of another important factor in MTM valuations - the value of multiple voyages. A vessel’s activity is often uncertain, particularly when there are multiple voyages involved. In these circumstances, a valuation can only be based on a best guess about what the subsequent voyages will be. This uncertainty – combined with dependence on error-prone spreadsheets – only adds to the difficulty of producing an accurate MTM valuation.

If depending on antiquated spreadsheets for performing critical calculations is bad enough, depending on subjective information is even worse. And so the third challenge is overcoming the highly personal and often skewed views of the market that many companies use to perform their MTM valuations. It should go without saying that this subjective input can result in very inaccurate numbers that obliterate all hope for a valid valuation.

The first three challenges lead to the creation of an erroneous MTM valuation, but the fourth is what happens once those inaccurate valuations filter through to the decision-making process. Timecharter contracts specify the minimum and maximum time a charterer will use a vessel. The accurate market value of a vessel must be known in order to determine whether it should be kept only for the minimum contracted time, or longer. If the data driving that valuation is faulty, then the resulting decision is also likely to be flawed and a charterer may end up hanging on to a vessel that is losing money.

What makes this worse is that many companies limit themselves to using simplistic in-the-money/out-of-the-money calculations to drive valuations instead of other, more

complex methods that are more accurate purely because the more complex methods are difficult to manage in a spreadsheet.

Companies using the in- and out-of-themoney calculation stand to lose a significant amount of capital, especially when the market is close to the level of the contracted hire rate, because the formula is not sophisticated enough to effectively account for the frequent swings of the market.

The above challenges can be conquered with specialised solutions that comprehensively manage freight risk, chartering and vessel operations on a single, integrated platform. Unlike antiquated spreadsheets, these solutions provide complete transparency across all aspects of the business, presenting an accurate view of a company’s exposure and financial standing in real-time.

What to look for: Robust freight risk management: It is key that the chosen solution provides a realtime view of the position, including timecharter contracts, freight forward agreements, contracts of affreightment, cargo bookings and financial options.

The system should enable you to compute accurate freight rates with just a few mouse clicks and allow the saving of nonstandard routes in the system that can be used to drive the calculations. It should also manage bunker exposure from physical contracts and bunker swaps.

Multiple valuation methods: It’s imperative that the system selected is able to perform an accurate MTM valuation within seconds. It should also allow the application of multiple valuation methods (ie in- and out-of the money calculations; physical option intrinsic value calculations) that can be used to objectively drive important decisions including how long a vessel should be kept.

Multiple voyages should also be easily valued.

Chartering management capabilities: The solution ought to provide the ability to manage all pre-fixture activities of a (Continued on p7..)

TANKEROperator August/September 2012

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INDUSTRY – MARKETS

Disclosure of market value An increase is expected in the sort of pressure recently exerted on shipping companies by the US Securities and Exchange Commission (SEC) to make disclosure when the market value of their vessels is less than their carrying value.

According to UK-based accountant and shipping industry adviser Moore Stephens, the pressure for this type of disclosure, often referred to as ‘incipient impairment’, was reflected in the 2011 filings of many SEC registrants.

Moore Stephens partner David Chopping said, “The SEC has seen impairment charges in the accounts of a number of shipping companies in the last few years. But it has apparently not seen quite as many as it might have been expecting. It is easy to understand why the SEC, and others, might consider

disclosure of market value to be useful information and want to see it more widely disseminated.

“It is more objective than valuations based on management estimates, it is more comparable across companies, and it sets benchmarks against which companies’ own policies can be assessed. Indeed, for some parties, the information might seem far more important than valuations based on projected future income streams.

“At the same time, it is equally easy to visualise objections to such disclosure.

Values are to be determined on an unfixed basis, so are arguably of only limited relevance where vessels are fixed for fairly long periods with high-quality charterers.

Similarly, while values may look comparable, if the fixture position differs significantly, then such comparability might be considered spurious. And even if a vessel

is operating in the spot market, or a fixture is going to be ending shortly, while other objections might be less compelling, there are still concerns about the volatility of market values.

How relevant is a valuation at a point of time in a volatile market where an asset might have many years still to operate?

“Nonetheless, it seems very unlikely that the SEC will change its mind and decide that such disclosure is not useful. It is far more likely that other bodies, and indeed investors, will start expecting to see such information.

This can happen without any need for changes in the rules, and indeed the SEC has not explicitly changed the disclosure requirements. It seems to have relied more on the ‘Al Capone’ approach of a kind word; everyone already knows it has a gun!” he concluded.

Making money in a difficult market Improving economic resilience

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Technology and methods for cost management in tanker operations Prime mover optimisation, spending prioritisation, simplifying onboard operations

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06

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TANKEROperator August/September 2012

INDUSTRY - MARKETS (Continued from p4..) commercial operation including voyage estimating, cargo management, and vessel management. For charterers, it’s important to be able to analyse potential profit or loss before making an agreement to transport cargo. You should also be able to easily view all upcoming cargo commitments or open tonnage positions, as well as view all vessels and when they are coming open within a given date range or specific zone.

Comprehensive voyage and vessel management: Operators should ensure the solution selected enables them to keep track of day-to-day operations: arrival, departure, loading, discharging, bunkering and disbursement accounting. The solution should also maintain a technical and commercial description of vessels for improved control and efficiency.

In addition, because constant change is the norm in the shipping industry, ensure a solution is selected that is flexible and scalable. It should be able to grow and change along with the business.

Protecting the bottom line Accurate MTM valuations are critical to protecting profits and remaining competitive in the maritime industry. Too many companies are unwittingly jeopardising their bottom lines and incurring significant enterprise risk by using inaccurate information to determine their fleets’ value and make important business decisions.

These companies are operating in dangerous waters, risking lost profits that could ultimately cause their entire business to go into an irreversible decline. These are treacherous times and in order to maintain profit margins and remain competitive, commercial owners, charterers, and operators must embrace technology solutions that ensure accurate MTM valuations and provide complete transparency across the enterprise.

Companies that invest in scalable technology solutions with the flexibility to address current and future requirements can expect to reap immeasurable returns by maximising profits, minimising risks, and ultimately achieving a bigger bottom line, Navarro concluded.

TO

Tanker orders creep up With new orders difficult to secure, South Korean yards may be better placed to survive today’s difficult market.

This is reflected in the fact that these yards have taken 55% of all new tanker orders placed so far this year (beginning of July), Gibson Research said, as demand for eco ships takes off.

Good packages are available, while newbuilding prices for most tanker types have fallen by about one third since the beginning of 2008, Gibson said.

New orders placed during the 1st half of this year indicated that we are likely to exceed last year’s total, which was exceptionally August/September 2012

low for all types of ship contracting.

For example, firm orders for 52 MRs were placed in 1H12, already exceeding the last three years’ annual totals.

Not surprisingly, Suezmax ordering has shown the largest decrease with just three orders placed in 1H12. The current market doldrums appears to have placed the lid firmly on a fresh wave of tanker demand even at today’s prices.

What we don’t need to see is a fresh round of speculative orders towards the end of this year when the tanker market is expected to pick up ahead of winter demand, Gibson said.

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NEWS FOCUS

IACS to take a more active role New IACS chairman – LR’s Tom Boardley- recently outlined the intended programme for his 12-month tenure at the head of the class society association. oardley said that IACS was coming out of the uncertainty surrounding the EU’s anticompetition rules into taking a more active role in various industry forums.

He explained that meetings have already been held with many industry bodies and more are planned to discuss how best the shipping industry can meet the technical challenges thrown up by the plethora of regulations soon to come into force, or under discussion, at the IMO. The main areas to be looked at are the practicalities of any new rules in day-to-day vessel operations, such as the ballast water treatment issue.

The insurance industry is also being engaged to exchange information on minimising risks, which the class societies see as one of their critical roles.

As IACS chairman, Boardley’s short term agenda is to fine tune the harmonised common structural rules (HCSR). The initial consequence assessment reports for the HCSR were released for industry review at the beginning of July, which in effect was the start of the official consultation process. It is hoped to adopt the rules for newbuilding tankers and drybulk carriers during 2014, once a review has been undertaken in March/April next year with the aim of publishing the new rules in

B

LR’s marine director Tom Boardley.

December 2013.

He said that this particular piece of legislation will be time consuming to bring to fruition and it will be the major issue during the coming year.

There are also various technical issues with the ECAs, more of which will come on stream

shortly. “We will not try to frustrate the regulations, but will address the practical issues thrown up by the rules,” he stressed. He warned; “If you don’t understand the detail then you don’t understand the problem.”

IACS had significant input into the ILO’s Maritime Labour Convention (MLC) to

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provide uniformity.

Another of the tasks is to re-assert the 13-member organisation as a quality association with a stronger voice at the IMO, by way of a very active role in technical support for the flag states members.

As well as the IMO, Boardley said that he was keen to increase dialogue with the various EU departments, including European Maritime Safety Agency (EMSA), which will have a new man at the helm later this year - Markku Mylly of Finland - who has been appointed as EMSA’s new executive director, taking over from Willem de Ruiter.

Audit programme As part of the push to raise IACS members’ quality standards, each class society is being audited by their own appointed concerns. Since 1st January 2011, the audit and assessment of compliance has been carried out by independent Accredited Certification Bodies (ACBs).

Having now been in operation for nearly two years and given the proven benefits resulting from previous end user workshops, IACS will convene a 2012 workshop later this year between its members and their ACBs to reflect on their joint experiences of the scheme and to discuss any possible adjustments deemed appropriate to ensure it continues to meet fully the demands and needs of all stakeholders for a robust and consistent scheme of certification of its members.

The association will also be inviting flag administrations, classification societies, ACBs and other interested stakeholders that might have attended previous end user workshops to participate in the 2012 workshop to be held in Mumbai this November.

IACS permanent secretary Derek Hodgson explained that the 13member association would welcome more members, but no class society had applied for several years, which he thought could be down to other societies not coming up to the association’s criteria.

He confirmed that the Indian Register was now a full member again and the Croatian and Polish Registers had rejoined, following a period on the sidelines.

Helping Boardley in his year of office is LR’s head of external affairs, marine business, Konstantin Petrov who runs the chairman’s secretariat for the 12 months duration.

Around 95% of the work is undertaken by correspondence and there are usually between 150 and 180 subjects being discussed through 11 project teams.

Previous chairman Russian Register’s Pavel Shikhov remains as vice chairman, as is RINA’s Roberto Cazzulo, who will takeover the chairmanship from Boardley next year.

TO August/September 2012

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NEWS FOCUS

IACS Harmonised Common Structural Rules (HCSR) The first draft IACS’ HCSR was released at the beginning of July.

As part of the agreed process of development, IACS said that it had invited industry to offer comments on all parts of the draft rules prior to year-end 2012.

Feedback should be submitted via e-mail to csr@iacs.org.uk IACS said.

The Common Structural Rules (CSR) for double hull oil tankers and bulk carriers were adopted by IACS Council in December 2005 and came into force in April 2006.

These two sets of rules were developed independently and there were some variances in the adopted technical approaches for some of their elements. To remove variations and achieve consistency, IACS made a commitment to harmonise the CSR. This harmonisation project for the two sets of rules began in 2008.

The project also set out to achieve full compliance with the IMO Goal Based

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Standards (GBS), which will come into force in the middle of 2016. With this objective in mind, this first release of the draft HCSR and technical background are in compliance with the IMO Goal Based Standards (GBS), where functional requirements fall within the scope of these rules.

The harmonisation project has now delivered a single set of rules comprised of common, harmonised requirements applicable to both oil tankers and bulk carriers with specific sections of additional requirements applicable to each ship type.

Presentations of the draft HCSR are being planned for September in Busan, Shanghai, Tokyo, Houston, London and Athens.

The harmonisation of the rules involved extensive technical work, testing and calibration and now comes a period for the maritime industry and other stakeholders to review the draft HCSR and raise questions, observations and general feedback, IACS said.

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Knowledge centre To help with this task, IACS has set up, on the IACS website, a ‘Knowledge Centre’ (KC) where questions, observations and feedback can be found. In addition to offering support during the review period, the KC will act as a depository of knowledge, explanations, common interpretations and understandings, as well as facilitating the management and maintenance of the HCSR in the future - thus facilitating uniform implementation of the final rules.

IACS chairman Tom Boardley estimated that to get to the final objective of entry into force scheduled for 2014, the project will have cost ÂŁ9 mill.

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This initial industry review period will be followed by a second in the Spring of 2013 and a review by IACS societies’ technical committees in the Autumn of 2013 with a view to adoption of the HCSR by IACS Council in December 2013.

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INDUSTRY - GERMANY REPORT

GL unveils upgraded Aframax design Following the launching of GL’s Aframax conceptual design, developed in co-operation with the National Technical University of Athens (NTUA) about four years ago, the class society has introduced a new design following feedback from shipyards and tanker operators. he new design concept developed, called BEST-plus, incorporates many facets of the original design enhanced by the integration of hydrodynamic optimisation of the hull form and thus, offering further reduction in fuel consumption and emissions.

GL and NTUA again co-operated to develop their latest design concept and this time were supported by FRIENDSHIP Systems – a GL concern, which provided the company’s framework computer aided design (CAD) and computational fluid dynamics (CFD) integration platform.

Based on current growth rates, oil transport demand is forecast to be lower than tanker supply for the next couple of years, However, even a small change in demand will open up opportunities for new Aframaxes from 2014, GL said.

An analysis undertaken by GL showed that around 20% of existing Aframaxes will be at least 15 years of age this year, which could trigger replacement activities, the class society said.

GL said that the new BEST-plus design anticipates this replacement demand by integrating only the technologies that exist today. It targets the typical Aframax trades in the Caribbean. Facilities in the main US Ports and in the US ECA set the operating

T

conditions, the class society explained. If Mexico becomes part of an ECA region, some 30% of the transit distance would be inside an emissions control area, GL said.

The latest design assumes the vessel is powered by using MGO as a fuel when sailing within an ECA. However, both LNG as a fuel and the use of scrubbers are considered as alternatives to the basic design concept.

The need for a relatively high speed, which was mentioned by operators active in the Caribbean trades, must be considered with regard to the forthcoming EEDI requirement to ensure the vessel’s superior competitiveness, GL said.

Addressing the need for safer tankers, the conceptual design is aimed at reducing the oil outflow in case of an accident. It also contributes to greener shipping by improving energy efficiency and thus reducing CO2 emissions per unit transport. In addition, the design is claimed to reduce fuel costs by using an optimised hull form and also increasing revenues by offering greater cargo capacity, the class society said.

An advanced optimisation environment was used for the design approach, which integrated tools to predict the required propulsion power, stability, oil outflow, cargo capacity and hull structural scantlings. These were achieved through the linking of the Friendship-

Framework with SHIPFLOW, NAPA and POSEIDON and by using parametric models for the hull form, layout and structure, respectively.

As a result, the design concept offers improved cargo capacity with optimum speed performance. The main particulars are comparable with similar size Aframaxes.

The optimisation targeted speeds at three different drafts, a cargo capacity taking into account cargo volume and mass, hull structure mass, cargo and ballast tank layouts, as well as double hull width and height, which determine the oil outflow volumes in accidents. Related design parameters were systematically varied and about 2,500 design variants were generated and assessed.

Cost of transport – ratio of annual capital, fuel and other operating costs to annually transported cargo mass – normalised with respect to the reference design, was used as the optimisation’s primary target function. The capital costs were based on $58 mill newbuilding price and a 25 year lifespan. Fuel costs were computed according to a dedicated round trip model – with HFO at $500 per tonne and MGO at $800 per tonne – for the Caribbean trades. The other opcosts were constant – about $3 mill per year – based on Moore Stephens Opcost 2009.

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INDUSTRY - GERMANY REPORT transport costs was an existing pre-CSR tanker, which was also used in GL’s 2008 study. Compared to the reference design, a 7% improvement in transport costs was realised, due to the better hull form for the best hull variant. It was noted that many design variants were optimal in a Pareto frontier analysis, which meant that the selection of one variant for the final design depended on the weighting of the different optimisation targets.

Therefore, depending on the designer’s choice, a design optimised for oil outflow, EEDI, or for transport costs, might be selected, GL said.

The optimised hull form was designed for a speed of 15.6 knots at the design draft with a 95% confidence interval. The speed at the ballast draft of 7.4 m is 16.8 knots. This

represents a favourable speed increase when compared with recently built Aframaxes. With a standard main engine for Aframaxes – MAN 6S60MC-C, the fuel consumption is comparable with similar tankers of this size.

With a high speed and large cargo capacity, this design will easily meet future EEDI requirements, the class society claimed. The attained EEDI value is merely 84% of the latest published reference line value for this vessel size. This means that the vessel would be in compliance with EEDI regulations even if the first reduction to the required index had already started. At current estimates, this will occur on 1st January 2015 at the earliest.

Although a vessel contracted before EEDI has entered into force will not normally need to comply, vessel entering into the market say

in 2017, will be more energy efficient and, therefore, more likely to attract charterers than older vessels with lower energy efficiency. GL claimed that its new design would remain highly competitive.

Principal Particulars – BEST-plus LOA‌‌‌‌‌‌‌‌‌‌‌‌‌250 m Beam‌‌‌‌‌‌‌‌‌‌‌‌‌44 m Depth‌‌‌‌‌‌‌‌‌‌‌‌..21.5 m Design draft‌‌‌‌‌‌‌‌‌‌13.7 m Deadweight‌‌‌‌‌‌‌‌‌114,923 t Cargo capacity‌‌‌‌‌‌129,644 cu m Block coefficient‌‌‌‌‌‌‌‌....0.85 Double bottom height‌‌‌‌‌‌..2.1 m Double bottom hull COT 1‌‌‌....2.75 m Double bottom width‌‌‌‌‌‌.2.65 m Loaded speed at design draft‌‌....15.6 kn Ballast speed at design draft‌‌‌.16.8 kn EEDI‌‌‌‌‌‌...3.2814 g CO2/(t*nm) Source: GL.

The BEST-plus concept can be adapted for using LNG as fuel with gas tanks located

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on the deck.

To reduce oil outflow in case of accidents, the double hull side width was eventually set to 2.65 m. In addition, to further reduce cargo tank penetration in the event of a grounding, the No 1 cargo tank’s inner bottom was raised from 2.1 m to 2.75 m. To ensure structural continuity, an inclined inner bottom is

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INDUSTRY - GERMANY REPORT

BEST-plus was the result of industry feedback, including comments from shipyards and Aframax tanker operators.

proposed between two frames.

The final hull structure was evaluated with finite element analysis according to IACS CSR. Typically, the sea margin is only estimated to ensure that the vessel has sufficient reserve power to overcome adverse conditions and to keep to its schedule. Using advanced potential flow prediction and Caribbean Sea wave characteristics, the added resistance in waves was computed for the new design concept. It was confirmed that the available power was sufficient to deliver schedule reliability in 95% of all the encountered sea states.

BEST-plus’ hull form was designed to yield optimal wake properties, resulting in higher propulsion efficiency. Today, modern CFD technology facilitates analysing the flow field locally, GL said. A wake equalising duct (WED) was considered as a possible enhancement for a possible newbuilding, as well as retrofitting. A parametric model of the WED was generated and many different configurations were evaluated, keeping the hull form and propeller fixed.

One configuration was found that reduced the power delivered by 4.5% at the design speed. Alternatively, the WED can give an increased design speed of 0.2 knots to 15.8 knots.

GL claimed that this conceptual design has the lowest transport cost and the highest speed among the comparable designs available and also features a low EEDI and a low oil outflow index. With a possible market upswing, due to the expected older tonnage replacement requirements and by only including existing technologies, the class society said that this design concept will look attractive for those shipowners who wish to stay ahead of the competition for the next decade.

As mentioned BEST-plus was developed by 14

GL Strategic Research and Development, the National Technical University of Athens (NTUA) and GL’s subsidiary FRIENDSHIP SYSTEMS. The team proposed a synthesis model that comprised measures of merit for hydrodynamics, structures, payload, oil outflow probability in case of accidents, energy efficiency as expressed by the EEDI and, very importantly, economics.

BEST plus is an acronym for ‘Better Economics with a Safer Tanker.’ Within BEST plus, GL said that more than 2,000 design variants were evaluated in a concerted manner by combining simulation codes such as SHIPFLOW, GL Poseidon and NAPA, via the computer aided engineering environment FRIENDSHIP-Framework.

Supplementary hydrodynamic analyses were jointly undertaken by FRIENDSHIP SYSTEMS and the University of Applied Sciences in Bremen. Using the most advanced tanker design from BEST plus, an additional propulsion improvement device was

introduced, with the aim of homogenising the wake field in the propeller plane and further enhancing propulsive efficiency.

A duct was selected due to its inherent simplicity, presenting itself as a good candidate not only for new designs but also for the refitting of ships in operation.

In order to be able to investigate a considerable number of design variants, a fully parametric model of the duct was developed within the FRIENDSHIP-Framework. For the viscous flow analyses, the CFD code SHIPFLOW-XCHAP was used. XCHAP offers an overlapping grid technology that makes use of high-resolution body-fitted grids around appendages, which are superimposed on a background grid fitted to the hull form.

This yields high accuracy in the flow regions of interest and allows for automatic updates when changes in geometry are considered. Combining both the FRIENDSHIP-Framework and XCHAP, TO several hundred designs were studied.

A comparison of Aframax CSR tankers’ EEDIs, showing the BEST-plus design to be one of the lowest.

Source: GL.

TANKEROperator August/September 2012

INDUSTRY - GERMANY REPORT

VDR fights for government funding The German Shipowners’ Association (VDR) has welcomed the decision by the Budget Committee of the German Bundestag to unlock funds under the so called ‘maritime alliance’. hus, nearly €60 mill to promote the shipping industry this year is ready, the VDR said. “The German parliament is proving itself to be a reliable partner for the continuation and development of the maritime alliance,” said Ralf Nagel, VDR executive committee member.

However, he expressed regret that the Federal Government has again halved the average shipping promotion budget for 2013.

He said that the Bundestag, the North German states, the union Verdi and the entire maritime industry had continued to develop the alliance. “With their decision, the Federal Government has isolated the maritime alliance,” Nagel said.

At the VDR’s general meeting held on 8th December last year, it was decided to allocate €30 mill per year to promote training and employment in the maritime industry within Germany. Some €20 mill will come from the German shipowners and the remaining €10 mill will come from increasing the Ausflaggungsgebühren, the VDR said at the time.

In another move, the Federal Government

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has also introduced a draft law on the registration of security companies to operate on seagoing vessels. Speaking in July, Michael Behrendt, VDR president said: “We welcome the initiative of the Federal Government to regulate the use of private armed security forces on ships flying the German flag. Our owners need clear directions in order to effectively protect their seafarers from the threat of piracy.”

The landmark decision for promote a law had taken a long time. However, it was important, said Behrendt, that international security companies can be authorised to be used on board German flag vessels.

“It is therefore encouraging that the approval process was agreed, as we had requested based on the IMO guidelines,” he said.

Approvals by the Federal Office of Economics and Export Control (BAFA) will be monitored after the Bill comes into force.

Nagel, said: “A limitation of approvals is sensible to ensure a permanent high security services standard of equipment and personnel.”

Nagel said that private security companies

represented only the second best solution to protect crews, as sufficient protection of the international merchant fleet by sovereign security forces could be available for the foreseeable future, according to the Federal Government.

Sufficient time needed He expressed concern as to whether the shipowners would have sufficient time to find a suitable security advisor, once the law had entered into force. Nagel said: “There is no legal obligation for shipowners owning vessels flying the German flag to only use the BAFA approved security service, only maybe when a sufficient number of private security companies become registered. There is a risk of a further split when too few companies are licensed.

“Most importantly, it is now necessary to get the necessary legal regulation on the table very quickly. We are participating in the implementation of legislation in a constructive, effective and pragmatic cooperative manner with the relevant authorities in order to avoid friction and unnecessary bureaucracy,” he concluded.

TO

German shipping statistics As of the end of last year, figures produced for the VDR, showed that the German administration stood at number 14 in the world’s flag state league.

German controlled vessels flying the domestic flag amounted to 14.9 mill gt, or 1.5% of the world’s total. in 388 companies identified by the BSH and VDR. However, looking at the tonnage controlled by German domiciled companies, this rockets the country into third place with 3,878 vessels of 124.8 mill dwt, or 9.4% of the world’s total. The average age of the fleet is only eight years.

Looking at the tanker statistics, there were 455 vessels in the German fleet of 22.9 mill dwt, amounting to 4.1% of the world’s 16

total at the end of last year. Of those over 100 gt, 282 were crude oil carriers, 109 chemical and other liquid carriers, 56 gas tankers and four bunker tankers.

New people entering the shipping sector as at the end of last year stood at 720 seafarers and 366 apprenticeships to shipping and chartering managers, according to figures produced by the BSH/VDR. There were 388 companies domiciled in Germany, spread mainly around the northern states, including Niedersachsen (Elbe, Weser and Jade/Ems), Hamburg, Schleswig-Holstein, MecklenburgVorpommern, Bremen and others, according to the figures released by the VDR.

TANKEROperator August/September 2012

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INDUSTRY - GERMANY REPORT

Marenave bucks the trend One company to have made a strong start this year was mixed fleet German owner Marenave Schiffahrts.

The bottom line was a consolidated net profit of â‚Ź3.1 mill for the first three months of this year. The company claimed that this was the best quarterly result since the onset of the global economic and financial crisis in the third quarter of 2008. In addition to the net result, key performance indicators also showed improvements.

Sales revenues rose by 34%, compared to the same period in 2011. As costs only rose at a disproportionately low rate, the ship operating result and the operating profit from shipping operations showed growth rates of 47% and 52%, respectively.

The reasons for these positive developments were to be found in the investment and deployment strategy advocated and implemented since the company was formed.

CEO Tobias KĂśnig said: “The diversified employment of the fleet in all segments of the shipping industry, as well as the mix of spot and longterm fixed chartering makes it

possible for the contribution to earnings of the ships employed under medium term and long term arrangements to more than offset the negative contribution to the consolidated results of segments affected by crises.�

Marenave’s strategic goal is to further grow the fleet. KĂśnig said; “This is still a time to purchase ships on favourable terms and many market participants expect 2012 to be a year when many shipping limited partnerships in the German Market will come up for sale. As a listed stock corporation, we find ourselves well positioned to profit from the coming changes.â€?

Marenave Schiffahrts was the first publicly traded shipping fund company in Germany organised as a joint stock corporation under German law (AG, Aktiengesellschaft).

It was developed so that institutional and private investors could obtain long term exposure to the shipping market and diversify their portfolios further.

The company’s goal is to set up a diversified portfolio of container vessels, tankers and bulkers and to generate income from buying, selling and chartering ships.

Marenave’s fleet currently totals 13 vessels: six Panamax and Handymax product/chemical tankers, two 1,200 TEU containerships, one car carrier and four Supramax bulkers.

Mid/long term charter agreements for the car carrier and the bulkers have secured charter revenues of about $260 mill. The average return on capital employed for the vessels under long term charters is close to 15% per annum, which represents the benchmark for future investments, the company said.

Listing on the stock exchange puts Marenave Schiffahrts in a position to raise fresh capital for the acquisition of additional vessels, as needed and given the appropriate market conditions.

This will allow the current favourable market phase to be used for the targeted fleet expansion and thus an extension of operations in Hamburg, the company explained.

Marenave Schiffahrts claimed to be one of the few German shipping companies with a corporate structure that leading banks view as a necessary condition for financing future TO projects.

18

TANKEROperator August/September 2012

INDUSTRY - GERMANY REPORT

A positive effect on fuel consumption As a consequence of recent IMO regulations, shipowners are requested to improve energy efficiency of their ships’ operation with regard to various factors that drive fuel consumption and emissions. laiming to address these requirements is the German-based navigation system manufacturer Raytheon Anschütz.

This claim was made, following the retrofitting of the company’s newly developed autopilot series NP 5000 on board a fleet of tankers.

As one of the first customers, US-based Overseas Shipholding Group (OSG) contracted Raytheon Anschütz to exchange the existing autopilot systems in the tanker fleet with the NautoPilot 5300. The first autopilot system was installed on board the Aframax Overseas Fran in October 2011.

“OSG are undertaking great efforts to increase energy efficiency on board of their ships. The choice of our new adaptive autopilot system was influenced by considerations of saving fuel and thus reducing emissions”, said Olav Denker, Raytheon Anschütz product manager. “With OSG, we have now had the chance to prove positive effects of NP 5000 on steering performance and fuel consumption in practice for the first time.”

NP 5000 helps optimise rudder movements with its integrated Eco-Mode. In Eco-Mode, the autopilot automatically adapts to the current sea state and weather. Instead of keeping a heading using frequent rudder actions with high amplitudes, the rudder’s sensitivity to periodical yawing movements caused by roll and pitch is reduced.

Subsequently, less rudder action is required, which leads to lower levels of speed reduction and thus less fuel consumption.

Overseas Fran’s first voyage with the NP 5000 fitted was from Skagen to New York. To evaluate the actual effect of NP 5000 on rudder steering, during this voyage the heading and rudder plot was compared with the results of the previous voyage on the same route with the old autopilot system, under similar weather conditions during both voyages.

Capt Dmitry Shatrov, the tanker’s Master, explained: “We can see on our print-out that

C

20

rudder movement is more economic and gentle with the new autopilot system.”

The effect of EcoMode is further supported by the new integrated heading and rudder plotter, which provides a graphical indication of heading changes and the resulting rudder angles.

This graphic display instantaneously indicates the steering performance of the vessel due to the effects of changes to parameter settings, such as rudder, counter rudder and yawing.

The operator benefits NautoPilot 5000 with Integrated heading and rudder plotter. from simplified adjustments of the rudder plotter into the new NP 5000 autopilot autopilot’s settings to gain optimised steering series,” Denker explained. performance, which further minimises rudder In addition to its fuel-saving potential, NP action and thus increases fuel efficiency, the 5000 is also equipped with functions for high company said. precision course keeping, for example, for safe “The newly installed autopilot system has a navigation in challenging sea areas near user-friendly interface in which you can easily coastlines and shallow sea areas, platforms, or adjust autopilot functionality in the prevailing archipelagos. circumstances, weather condition and required Besides heading control and track control, steering accuracy. So that we can navigate the the new autopilot features a course control vessel more gently and economically, taking mode. When steering in this mode, the into consideration fuel savings and safety”, autopilot automatically compensates for drift Capt Shatrov concluded. and keeps the vessel on the defined course The relevance of optimised rudder over ground line. An optionally integrated movements for fuel savings has already been acceleration monitor provides a warning if a highlighted by IMO as a ‘best practice’ for pre-defined cross acceleration limit is efficient ship operation when developing a exceeded.

Ship Energy Efficiency Management Plan NautoPilot 5000 was launched at the (SEEMP). beginning of 2011 as successor to the “Since we all know that less rudder NautoPilot 2000 series. In total, Raytheon movement significantly contributes to reduced Anschütz supplies 800 autopilot systems each fuel consumption and emissions, we have year to the worldwide shipping market, the developed and implemented unique features, TO company claimed. such as the Eco-Mode and the heading and

TANKEROperator August/September 2012

INDUSTRY – GERMANY - SMM PREVIEW

September sees the shipping world in Hamburg Next month, the shipping world will descend on Hamburg for the bi-ennial SMM exhibition and conference, which this year celebrates its 25th anniversary. here will be 2,000 plus exhibitors from more than 60 countries taking up over 90,000 sq m of exhibition space with more than 50,000 trade visitors expected.

Alongside the regular SMM Ship Finance Forum, is MS&D, an international conference on maritime security and defence; and gmec, global maritime environmental congress – an integrated component in the SMM supporting programme for the second time.

Another regular feature is the SMM Offshore Dialogue, also held for the second time this year, with industry experts discussing oil and gas production at sea and offshore wind energy. There will be more than 150 programme items.

MS&D exhibition and conference has now been incorporated in SMM with dedicated floor space located in the new Hall B8. “Tomorrow’s Champions� is the subject of the SMM Ship Finance Forum. Leading experts from all parts of the world discuss current challenges and perspectives in the ship finance event on 3rd September, which forms part of the expo.

This is the fourth time that SMM organiser HMC (Hamburg Messe und Congress) will co-

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host this English-language conference together with Financial Times Deutschland; more than 200 participants and speakers are expected from all over the world.

According to analyses by Clarkson Research, some $90 bill was invested in new vessels last year –a lot less than in record year 2007 but still a large amount, which the shipping lines cannot raise under their own steam. At present, it is becoming increasingly difficult to obtain equity capital from investors and loan capital from banks. Private investors are scared off further commitments by the numerous insolvencies seen with single-ship companies, the organisers said. “The classic German KG model has become obsolete for the time being,â€? said Dr Torsten Teichert, chairman of the management board of Lloyd Fonds who will present ideas on the future role of shipping funds at the forum. He expects that international investors will in future become more involved in the maritime sector. “The entry of US private equity companies gives German shipowners a funding alternative to the previous models,â€? said Dr Dirk LammerskĂśtter, management board of HSH Corporate Finance. But experience

shows that their profit expectations are substantially higher.

While some of the traditional ship financiers such as HSH and Unicredit are successively reducing their commitment, the public-sector KfW IPEX-Bank is increasingly moving into project financing.

However, bank regulations are becoming more and more stringent (Basel II and III), which means that most of the banks find it hard to work in this volatile industry. So far, the expectations that an Asian bank would fill the gap by moving into this sector in a big way have not been fulfilled – as a rule such arrangements operate with a linked package deal whereby a ship built by a South Korean or Chinese shipyard also gets a funding arrangement, or credit guarantee from those countries.

In Germany, more attention is now directed towards alternative financing instruments, such as borrower’s note loans, profit participation capital, and ship mortgages.

Some of the major international shipping companies are already stock exchange listed, or can get access to the capital market by means of bond issues.

Investors currently benefit from an

MEET US AT SMM 2012 Hall A1 stand 217

August/September 2012

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INDUSTRY – GERMANY - SMM PREVIEW extremely favourable price level – “I think the risk-return ratio is at present the best it has been for many years,” said Dagfinn Lunde, director of DVB Bank and a panel participant at the SMM Ship Finance Forum. That is also confirmed by the figures from Clarkson Research: “Compared with their peak in 2008, shipbuilding prices have dropped by 30, or 40%,” said managing director Dr Martin Stopford.

The current crisis does give investors worthwhile openings. Newbuildings are mostly more energy-efficient than ships in the current fleet, so that is very useful in view of the dramatic rise in fuel costs. Individual shipping companies are already thinking of adding to their fleets – provided they find the right financing partners, the organisers said.

Shipbuilding The European shipbuilding industry is coming under pressure - in 2011 the number of deliveries related to tonnage exceeded the number of new orders for the fourth year in succession, at about 2.45 mill CGT (versus 1.8 mill CGT in 2011).

This means that the orderbook shrank to one third of what it was five years ago (around 5.7 mill CGT). Nevertheless, this industry has major importance for Europe - its sales volume, with a workforce of more than 500,000 people, is more than €80 bill per annum.

The Community of European Shipyards Associations (CESA) and the European Marine Equipment Council (EMEC) have now agreed to set up a joint association to represent the interests of the maritime shipbuilding industry.

The new association will include nearly 100% of the maritime industry from 18 countries. “This focusing of activities will strengthen the position of the European shipbuilding industry, as we will also see at SMM,” said Peter Bergleiter, business unit director at Hamburg Messe und Congress, SMM’s organiser.

Meanwhile, the European shipbuilding industry is focusing increasingly on construction of technologically sophisticated ship types - Meyer Werft (Germany) and its competitor Fincantieri (Italy) have established themselves as the leading builders of cruise vessels; STX Europe (Norway) also builds ferries, offshore supply vessels and naval ships. Sietas (Germany) and Crist shipyard (Poland) are working on offshore installation vessels; Flensburger Schiffbau-Gesellschaft is completing the fourth ferry for Seatruck and 22

the company’s order book includes two heavyduty freight ships. Nordic Yards is building the third high-voltage DC converter offshore platform for Siemens.

An interesting prospect is opening up for LNG carriers. Experts at Deutsche Shipping, the shipping unit of Deutsche Bank, are expecting significant demand in this area in the medium-term future. The industry has already responded - Meyer-Werft will deliver its first LNGC to the Dutch shipowner Anthony Veder at the end of this year.

The business principle of the Damen Shipyards Group, which specialises, among

other things, in tugs and platform supply vessels, could be applied to the whole of the industry - “We operate in every niche market because if we see an opportunity to improve, innovate or invest, we take it.”

European companies will be strongly represented at SMM 2012 - in terms of area booked, Germany leads the way, followed by the Netherlands, Norway and the UK. The People’s Republic of China, world shipbuilding nation number one, follows in fifth position, having overtaken Denmark (sixth position), the organisers said. “SMM is as global in scope as the maritime industry

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INDUSTRY – GERMANY - SMM PREVIEW itself,” said Bergleiter. Germany’s shipbuilding and offshore suppliers take a leading position in the world, with some three quarters of their total sales made outside their own country.

Energy-saving, cost-effective, environment friendly engineering is one of the new key areas of the marine equipment industry, supplying to ships and offshore operators.

German industry has a technological lead to defend here. “Developments of the propulsion train and in particular of the engine are excellent examples of that,” said Klaus Deleroi of MAN Diesel & Turbo. “Only technology leaders with system expertise are capable of optimising emission levels over the whole of the life cycle of the engine.”

The same applies to the Asian companies.

Exhibitors from China include a wide range of companies, plus the two most important shipbuilding associations CSIC and CSSC. The South Korean Shipbuilders’ Association KOSHIPA will also be present as will a large South Korean pavilion with equipment suppliers. Major Japanese shipyards will be present, together with the Japan Marine Equipment Association JSMEA. Retrofitting (refitting) is also gaining in importance. For example, operation in ECAs is a key reason for using LNG propulsion systems and also for retrofitting scrubber systems to remove emissions from exhaust gas. And from 2016 onwards, following majority ratification of the ballast water convention, its rules could be applicable to nearly the whole of the world’s merchant fleet – an enormous market.

“A scrubber, including its installation, costs several million (dollars) and the cost of a ballast water treatment plant can also go into seven figures,” said Rüdiger Pallentin, managing director of Lloyd Werft, Bremerhaven. Equipment suppliers such as

MWB, Alfa Laval, Mahle and RWO present their latest solutions in this area.

Tanker Operator has put together a snapshot of just a few of the exhibitors in strict alphabetical order.

ABB is marketing its energy management system EMMA, aimed at maximising vessel efficiency. “The system is expected to pay for itself in less than a year at today’s fuel price levels,” said Mikko Lepistö, responsible for advisory systems within ABB’s vessel information and control division (VICO).

“Industrial experience and on board tests show that the system can help our customers to make significant fuel savings and thus to reduce emissions.”

Admiralty will host the next series of digital integration workshops at SMM. The workshops, which are free to attend, help shipping managers effectively plan for the integration of digital technology into bridge operations to meet the IMO mandatory carriage of ECDIS legislation that came into force on 1st July 2012.

They will take place on first floor of Hall B6, in room B6.1 on 4th – 7th September 2012. Attendance is free, but spaces are limited and anyone wishing to attend should register online.

The workshops have been developed in conjunction with Capt Paul Hailwood, an ECDIS and integrated bridge operations expert. They will and provide a simple, stepby-step process to support the planning and delivery of compliance with the mandatory carriage of ECDIS. Following on from the start of the ECDIS mandate at the beginning of July, shipping companies must be planning and implementing digital navigation, said Capt Hailwood; “Many companies underestimate how long the transition to digital navigation

will take. It’s crucial that they make every effort to fully understand what ECDIS compliance requires. I’ve worked with many companies where the process has taken twice as long as first thought, resulting in a variety of operational issues.

“To avoid these problems shipping companies need definitive answers about the integration process to enable them to prepare effectively. The Admiralty workshops are designed to be the definitive resource to set them on the right course,” he concluded.

Ian Moncrieff CBE , UKHO and Admiralty CEO, said: “The integration of digital navigation into bridge operations is a huge step forward for the industry, delivering improved safety and efficiency. However, these benefits will not come automatically; they require the strategic implementation of a range of technologies and processes alongside highly focused and competent operational execution. The digital integration workshops we’re delivering at SMM Hamburg 2012 and around the world this year are designed to equip shipping companies with the knowledge and skills they need to embrace the digital future of navigation.”

Following SMM Hamburg 2012, the workshops will also be held in London on 24th September, details to follow and Dubai, UAE on 27th-29th November 2012.

Additional dates will also be announced.

Alfa Laval will be showcasing a wide range of solutions designed to boost efficiency and reduce operating costs.

This year’s SMM will be the launch pad for three new products. PureSOx introduces costeffective exhaust gas cleaning. PureDry introduces waste fuel recovery and a paradigm shift in separator design. The wide temperature and pressure range of the AlfaNova fusion-bonded plate heat exchanger

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INDUSTRY – GERMANY - SMM PREVIEW meets the demanding applications set by today’s modern fleet, the company claimed.

PureSOx exhaust gas cleaning system Is your ship or fleet prepared for 1st January 2015? If not, it’s time to look at your options. PureSOx from Alfa Laval reduces harmful emissions by scrubbing sulphur from the exhaust gas of vessels operating on HFO. It is a low-cost solution compared to running on low sulphur MGO. PureSOx is a hybrid system that runs in either seawater or freshwater mode. It is also the largest system currently in operation (21 MW).

PureDry The PureDry waste oil treatment system dries up waste oil streams on board, signalling a paradigm shift in separator design. PureDry recovers fuel oil from a dedicated waste fuel oil collection tank and returns it to the bunker tank for reuse after normal treatment. For the shipowner, it means a reduction of up to 2% in the total volume of fuel oil consumed – and a corresponding reduction in the ship’s fuel bill.

AlfaNova fusion-bonded plate heat exchanger Newly introduced to Alfa Laval’s marine portfolio, AlfaNova offers a working range temperature between -196 deg C to +550 deg C. Constructed completely in stainless steel it can be used for wide range of aggressive media. Among these applications are LPG/E re-liquification including ammonia and also in LNG fuel duties. This is made possible by the company’s patented active fusion bonding technology.

PureBilge 5 ppm DNV Clean Design PureBilge is the first system to obtain the new 5 ppm DNV type approval certificate for 5,000 l/h. And with its tamper-proof BlueBox data recorder, which locks in critical data and captures the whole sampling line, performance is a matter of total confidence.

PureBallast 2.0 Reliability, compatibility and convenience are essential considerations when selecting a ballast water treatment solution. That’s why more and more shipowners are opting for Pure Ballast 2.0. It’s not about buying equipment – it’s about an expert partnership, and investing wisely in the know-how, resources and support that come with it.

Aalborg boiler series Alfa Laval Aalborg boilers combine high performance and reliability with 24

environmental focus, ensuring superior quality from quotation and documentation to manufacturing and plant commissioning.

The TCi series of oil-fired boilers offer significant improvements in efficiency.

They feature an Intelligent Turbo Clean (TCi) system, enabling them to self-clean without water washing and subsequent effluent.

Waste heat recovery Alfa Laval’s Aalborg waste heat recovery systems deliver documented fuel savings and cut COx emissions by up to 12%. They maximise profitability and safety while helping you meet environmental regulations.

Thermal fluid systems Alfa Laval Aalborg thermal fluid systems are an alternative to steam boilers as a heat supply for separators, cargo heaters, and other heat consumers. Supplied as complete and fully engineered systems, they feature an optional energy management system that reduces unnecessary heating and emissions by comparing the system’s available heat with the actual requirements of the heat consumer.

Inert gas systems Alfa Laval Aalborg inert gas systems produce quality, soot-free inert gas, thanks in part to the Ultramizing combustion system that prevents soot formation even at partial load conditions. Easy to operate and maintain, they allow quick and accurate configuration and offer a low total cost of ownership.

S separator 9 series -

The latest version of Alfa Laval’s groundbreaking S separator combines proven benefits like our Alcap technology with a wide range of technical innovations. The result is lower energy consumption, lower oil losses, lower lifecycle cost, and smaller footprint.

There will also be more attractions on display in addition to the highlights above. Visitors will also be able to experience: AQUA freshwater generator.

Fuel conditioning module (FCM) and advanced cooling system (ACS).

Filters.

Marine boilers and heat exchangers.

An extended service network created by the union of Alfa Laval and Aalborg Industries.

Alphatron will introduce a marine fibre optic heading sensor at SMM. With more than 800 Alphaminicourse traditional gimbal gyro compasses in service, Alphatron Marine is introducing the Alphafibercourse to the marine industry. It contains a fibre optic and 1Xblue core as a sensor reference.

It is a small light weight fast setting device, fully approved by class and MED wheelmarked.

The fibre gyro compass is directly connectable to a variety of ancillaries via a galvanically isolated docking station. Among the ancillaries are bearing repeaters, OSV approved interswitches, digital repeaters, repeater stands and brackets.

Due to its extreme robustness and size as well as the output of roll and pitch information as second signal, the Alphafibercourse is

Alphatron’s marine fibre optic heading sensor - Alphafibercourse.

TANKEROperator August/September 2012

INDUSTRY – GERMANY - SMM PREVIEW targeting the high end market of the marine industry, including chemical tankers.

For the past 15 years, BASS has provided software to streamline and automate ship operation processes, one by one, forming an integrated system. The company’s latest release - BASSnet 2.8 - has been receiving good feedbacks from clients worldwide Bass now has more than 100 customers worldwide, including Stolt Tankers, in experiencing how its modular software can streamline a business. It enables a shipping company to build one, integrated solution covering all main areas of maritime operations.

The modules include: Maintenance.

Projects.

Claims management.

Procurement.

Contract management.

Operations.

Document management.

Safety management.

Vetting.

Risk management.

Self assessment (TMSA).

Reviews and improvements.

Crewing/HR management.

Payroll.

Financials.

Report generator.

KPI dashboard.

With origins in Norwegian shipping, BASS Software can provide 24/ 7 global support to customers.

Special steering gear is represented by the record breaking 93 sq m TLKSR system from Becker Marine Systems. In addition, the Becker Mewis Duct, a nozzle fitted in front of the propeller with an integrated fin system, increases propeller efficiency in loaded condition by up to 6%, the company claimed.

Colfax Fluid Handling will exhibit an upgraded product – Allmind - at SMM. Colfax’s Allmind pump upgrade reduces total cost of ownership through diagnostic capability and variable speed drive control, the company said.

Despite the best intentions of shoreside superintendents under constant pressure to reduce operational expenses and equipment downtime, the best pump systems are at risk due to a lack of diagnostic information and

sophisticated control systems.

Allmind provides an effective solution to this challenge, Colfax said. As an intelligent system it monitors all types of pumps in a vessel and can help reduce expenses for dayto-day operations, maintenance, energy and spare parts costs.

At the same time, Allmind helps to improve operational safety. The concept of Allmind was developed from a single leakage control device to become an intelligent condition monitoring and variable speed control unit.

Energy costs account for 85% of the total cost of ownership for ballast and cooling pumps, demonstrating the importance of assessing total cost of ownership rather than basing purchasing decisions purely on initial cost. “The concept is just as relevantly applied to upgrade decisions�, said Christian Martin, director, product management commercial marine at Colfax. This means keeping abreast of technology and, as is often the case with pumps, recognising when old practices must make way for the new to achieve greater operational efficiency and profitability. “We have the technology to reduce the energy consumed in pumping operations by up

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INDUSTRY – GERMANY - SMM PREVIEW to 50% simply by enabling variable speed operation with Allmind,” said Martin.

“Moreover, add intelligent diagnostics as provided by Allmind and reliability goes up and maintenance costs go down – dramatically.”

Allmind is comprised of interchangeable modules, giving the system the flexibility needed to adapt to highly individualised processes. The system offers the ability to handle everything from relatively simple condition monitoring to sophisticated monitoring and control activities involving multiple pumps- all with a single unit.

The system can monitor pressure, temperature, leakage, vibration and output, as well as activate PID controllers. Each pump can be individually equipped with speed control. The system will store all sensor values and makes them available for evaluation purposes.

Conrac will be showing the following new products at SMM. New additions to the marine panel computer series are fully integrated solutions in widescreen format featuring diagonals of 13.3 inch and 7 inch with touch screen. Specially designed for marine applications, these PanelPCs are ideally suited for use in ship automation and control applications.

In addition, the latest versions of the wideECDIS marine panel computers, includes SysMon, a system monitoring application, now with a special ECDIS calibration function.

Conrac will also be show casing one of the OEM products, a wideECDS monitor in portrait format, specially developed for river radar applications.

Danfoss will be exhibiting its marine portfolio, including the frequency converterfamily that holds eight marine approvals. A variety of sensors, such as the cylinder

pressure sensor that reduces fuel consumption and increases engine life, will also be shown.

Frequency converter: compact size and marine approved - the more compact D-frame construction design of the VLT frequency converter is now fully available in the 90 to 250 KW output range. VLT frequency converters are available in protection classes up to IP 66, making the products ideal for the refurbishment of older vessels, the company said.

Danfoss VLT frequency converters for marine applications possibly hold the highest number of class certificates on the market today and are certified by a total of eight authorities within the maritime and offshore sectors, including DNV, RINA, LR, CCI and others.

Depending on the output range, the new compact frame size can be up to 68% smaller than the former frames. Additional options are available for these devices on the power input side, from fuses and load circuit breakers to electric contactors.

These devices save a large amount of cabinet space. The greatest savings are achieved by the 250 KW VLT frequency converters. They require only 0.14 cu m, compared to the 0.450 cu m formerly needed.

Danfoss converters remain among the smallest products in their performance classes and are available in a wide power range designed for all applications, marine and others, the company said.

The frequency converters have a large number of functions developed to meet the diverse needs of all kinds of applications. It is the perfect match for pumps, fans and compressors, eg in vessels that are fitted with increasingly sophisticated solutions. The power range is from 1.1 to 1,400 kW with voltage ranges 200, 380 – 480/500 V, 525 – 600 V and 690 V. The product is available up

to protection class IP66, depending on the version.

Cylinder pressure sensor – reduces fuel consumption - the new pressure sensor allows 2-stroke and 4-stroke engines to operate with a higher output than is the case today. Owners benefit from reduced fuel consumption, lower maintenance costs as well as longer operating life, Danfoss claimed.

The MBS 1800 pressure sensor is available in two versions an integrated sensor and amplifier in one housing and in-line sensor and chare amplifier firmly but flexibly connected by a high performance cable.

The sensor offers a variety of significant benefits, including pressure ranges up to 250 bar, overload pressure up to 300 bar, temperature range up to 350 deg C, response frequency 20 kHz, natural frequency > 90 kHz. The sensor is designed for 20,000 operating hours in severe conditions.

The new MBS 1800 cylinder pressure offers the possibility to register what happens in the combustion chamber while the engine is running. Knowing exactly what happens inside the cylinder provides the possibility to reduce emissions and reduce fuel consumption, as well as reduce maintenance costs, Danfoss said.

GEA Westfalia Separator Group will be introducing the BallastMaster ultraV. Increasing demands for cost and resource efficiency in ship operations and the growing importance of sustainable management have resulted in repeated critical examination of the individual material and process cycles by shipping companies and shipbuilders in recent years.

Until now, ballast water on board has generally been treated with the use of chemicals, resulting in corresponding detrimental effects for the environment, as well as material costs.

ANCHORS & CHAINS

Rotterdam Shanghai Bergen Aberdeen Nantong

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TANKEROperator August/September 2012

INDUSTRY – GERMANY - SMM PREVIEW

GEA Westfalia’s BallastMaster System.

August/September 2012

TANKEROperator

At SMM 2012, with the new BallastMaster ultraV solution, GEA Westfalia Separator Group demonstrates that with this solution, the necessary cleaning processes can be completed entirely without the use of chemicals and solely on the basis of filtration and irradiation with UV-C light. As ultrasound is used for the self-cleaning of the lamps, no disinfection byproducts occur.

The BallastMaster ultraV has a modular structure and is therefore suited both for new ships and for retrofitting. The system has already been certified under IMO regulations and is being presented for the first time at SMM. According to Sven Jadzinski, senior product manager, talking with Tanker Operator, the type approval for BallastMaster ultraV was issued by BSH on 19th December 2011.

He explained that the smallest module has a capacity from 160 cu m per hour up to 250 cu m per hour. GEA is also working on an upscaled unit, which can handle up to 500 cu m per hour capacities, Jadzinski said. He also said that the GEA BallastMaster ultraV is suitable for capacities up to 1,500 cu m per hour.

If a larger foot print is needed, power

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INDUSTRY – GERMANY - SMM PREVIEW consumption and installation cost might be an issue. Usually for throughput capacities of around 3,000 cu m per hour, ie for large vessels, different technology is recommended, for example electrolysis, Jadzinksi explained.

He also said that GEA is currently engaged in getting this system certified at a test facility in Denmark, which should be completed by the second half of 2013.

Experts estimate that the costs of system failures and downtimes within one life cycle could be three to four times greater than the corresponding costs of maintenance and repair.

Particularly in ship operations, the economic importance of system availability cannot be overestimated. As a result, GEA Westfalia Separator Group is bringing its new, holistic serv&care service concept to SMM 2012. serv&care makes service not only more flexible and adaptable than before but also capable of learning. Maintenance measures are no longer bound by rigid concepts and firmly defined packages but rather form one element of individually co-ordinated service agreements. In all parameters, these are precisely geared to the individual requirements of the customer. The central benefit for the customer: maximum system availability with absolute budget security, the company claimed.

Life saving service concern Lalizas has set up a webpage (www.lalizas.com) where local service stations for life jackets, immersion suits, liferafts and emergency evacuation breathing devices (EEBD), can be found.

The country of interest can be selected followed by the town and products of interest.

Go to www.lalizas.com/service.php to visit Lalizas’ worldwide network of service stations.

The German navigation system manufacturer Raytheon Anschütz will show its navigation systems – from the gyro compass Anschütz Standard 22 through the new generation of manual and automatic steering control systems to the Synapsis integrated bridge and navigation system (INS).

Synapsis is claimed to be the world’s first navigation system, which has been type approved according to IMO’s new INS Performance Standard. The INS’ key elements are new multi-functional workstations, which use standardised, ultra-compact long-life PCs and a standard software framework to allow customising bridge systems for any ship’s requirements.

Thus, the newly developed Synapsis integration platform not only controls all configurations, functional tasks and displays of the workstations but also provides 28

flexibility for upgrades and extensions. It also fully integrates with Anschütz gyro compasses, autopilots and manual steering systems, the company said.

The new steering gear control systems, NautoSteer AS and NautoPilot 5000, have been developed to set high standards of safety and precision in steering, but also to contribute to a significant decrease in fuel consumption and emissions.

NautoSteer AS steering control series is based on CAN-bus technology and provides advanced functions to set the standard for highest safety in steering. Its functions cover integrated steering failure and wire-break monitoring and a simplified steering mode selector switch, which separates an independent ‘Direct NFU’ non-follow-up steering position from a ‘Main’ follow-up steering position. The takeover of steering control is possible from any steering position.

NautoPilot 5000 features an integrated heading and rudder plotter on its large colour display, which instantaneously indicates the steering performance of the autopilot due to the effects of changes to parameter settings, such as rudder, counter rudder and yawing.

The NP 5000 can also be operated in ecomode to reduce sensitivity to periodical yawing movements. Subsequently, less rudder action is required, which leads to lower levels of speed reduction and thus less fuel consumption. If high precision in automatic steering is needed, the NP 5000 autopilot offers a new course control mode and a highprecision controller to maintain the precise steering performance.

In addition to the NP 5000, Raytheon Anschütz addresses the requirements for fuelefficient ship systems with the development of

new features that help optimising route planning on ECDIS. As an example, the Synapsis ECDIS has been enhanced with an advanced automatic route planning function to calculate the shortest route between two destinations.

The ECDIS also integrates weather data to address the impact of wind and waves, swell and currents on fuel consumption, operating costs and just-in-time arrivals. Together with the autopilot, the fuel saving potential is estimated at 2-4%.

A live demonstration of these fuel saving capabilities is also a highlight of the Raytheon Anschütz exhibit – ‘How modern navigation systems can help reduce emissions and save fuel.’

Dr Meeno Schrader of weather forecast provider WetterWelt and Andreas Lentfer as head of business development at Raytheon Anschütz will give a hands-on demonstration on Synapsis ECDIS and NP 5000 on Wednesday, 5th September, from 10-12 am, and on Thursday, 6th September, from 10 am to 1 pm at the Raytheon Anschütz booth 304 in Hall B6.

Safebridge will be highlighting its online ECDIS familiarisation courses at SMM. On show will be the full working version of the ECDIS familiarisation course linked via the web to the Safebridge online server and the OEMs’ own software.

Having released the first course covering type-specific training on the Northrop Grumman Sperry Marine VisionMaster FT5 in May, Safebridge is now finalising courseware for its other manufacturing partners, which include Raytheon Anschütz, Transas Marine, JRC, Imtech, ChartWorld, Sam Electronics and 7Cs.

Raytheon Anschütz INS.

TANKEROperator August/September 2012

INDUSTRY – GERMANY - SMM PREVIEW

SAM Electronics NACOS INS.

The Safebridge courses are true simulation conducted remotely and not using CDs or DVDs, which allow the student to study from anywhere with a good Internet connection.

The content represents some 16 hours of study and re-teaches the competencies of the IMO 1.27 generic training, which is a pre-requisite, on the actual equipment display and controls of the ECDIS equipment concerned.

Claimed to be unique to the Safebridge training solution is the ‘FreePlay’ mode without any tutorial, which allows the trainee to practice and gain confidence by using and experimenting with the live ECDIS system. To allow this, and the repeating of lessons if required, the courses allow a three-week window from first login to complete all the lessons.

Upon completion of the learning content, the ‘TestMe’ mode is activated and after successful completion of the test, a manufacturer-specific certificate will be issued.

SAM Electronics and its associate L-3 companies will feature extensive ranges of next-generation shipmanagement systems and sensors for automation, communications, navigation, positioning, propulsion, energy distribution and supplementary applications.

Highlights include live demonstrations of the latest NACOS Platinum series of scalable navigation, automation and control systems featuring standardised components and operating networks.

Displays will be complemented by a August/September 2012

Rheinmetall Defence bridge simulator featuring NACOS-type consoles, as well as a new integrated Platinum dynamic positioning and control system developed by L-3 Dynamic Positioning & Control Systems together with SAM and Lyngsø Marine. Also featured, as an integral part of demonstrations, will be a three-console L-3 Valmarine Valmatic automation assembly.

New support exhibits for the Platinum systems consist of a remote service software package for reducing service costs via an integrated service router and for shore-based fleet control operations, a centralised data monitoring facility for evaluating key performance indicators - Fleetpilot.

Other main equipment highlights include new compliance-ready products comprising an EcdisPilot basic unit for simplified retrofit applications, a bridge navigational watch alarm system (BNWAS) and a modular ballast water treatment system designed by Techcross of South Korea.

Supplementary displays cover SAM’s propulsion control and shaft alternator systems. Associated company exhibits include J-3 Jovatlas UPS systems, Funa International entertainment and lighting equipment and smart sensor measurement systems from APSS, Italy.

The Finnish engine builder Wärtsilä is changing its two-stroke engine programme over to long-stroke engines.

These are claimed to use up to 10% less fuel than conventional engines and run at relatively

TANKEROperator

low engine speeds, allowing the use of larger propellers, with corresponding efficiency benefits.

New technology to deter pirates is a key topic for discussion at this year’s SMM conference in Hamburg.

Westmark BV’s patented P-trap antiboarding device provides shipowners with a non-lethal barrier to harden vessels against pirate attacks.

The P-trap will be displayed enabling visitors to view a scale model of the solution, as well as a video, providing test results from navy, coastguard and rescue services at Westmark and Vecom booths.

An additional Westmark alliance stand is located in B8 (dedicated to marine defence and safety), in which this section provides shipowners with additional security strategies.

Netherlands-based Westmark designed the P-trap, an engine blocking system, which creates a security zone around the perimeter of the ship and prevents other vessels from approaching too closely in an attempt to board.

Side booms extend from the bow on both sides of the ship, carrying a set of long thin lines that are dragged just below the water surface, thus creating a barrier along the entire length of the ship.

A pirate skiff or whaler entering the security zone will run into the lines, which are designed to disable the engine, leaving the pirate skiff inoperable. The P-trap is designed to continuously protect against multiple 29

INDUSTRY – GERMANY - SMM PREVIEW

Westmark P-Trap.

simultaneous attacks day and night and does not require crew involvement once deployed before entering high risk areas.

Westmark has created several P-trap systems, designed to fit most seagoing vessels.

“The P-trap concept is as simple as locking your doors and windows before going to bed at night. It’s practical and it makes sense,” said Lodewijk Westerbeek van Eerten, creator of Ptrap.

At this year’s SMM Hamburg, Wilhelmsen Ships Service’s (WSS) German subsidiary will be celebrating its 40th birthday.

“In a global market that is still getting back on its’ feet, we can contribute our continued success to a combination of excellent customer service which consistently exceeds expectation – and a dedicated team made up of experienced staff and young, enthusiastic newcomers to the industry”, said WSS Germany’s general manager Ove Loos.

From its HQ in Sittensen, 45 km southwest of Hamburg, WSS Germany has expanded considerably over the past 40 years, from small beginnings in 1972 when it operated as Unitor GmbH to its status today as a national market leader in the supply of marine chemicals, marine products and safety services, staffed by a team that has increased tenfold.

As he looks towards SMM, Loos said that 30

he understood the importance of focusing on the bigger picture, despite a somewhat gloomy outlook for the industry.

“Due to the large number of shipping companies based in Germany, we have always specialised in the business with those customers and at a port level, we are offering first class service through well trained and highly dedicated, motivated and experienced employees.

“Of course, we are also very much dependent on the development of the global economy, particularly when we consider that Germany is one of the world’s leading export countries. We currently offer the full range of product supplies and technical services in all German ports in order to support our customers to improve the operational efficiency of their vessels,” he said.

In 2011, WSS Germany co-ordinated 17,300 deliveries and services to 3,500 German client vessels in ports worldwide through WSS’ customer service centre and carried out more than 7,300 deliveries and services to 2,800 international customer vessels in German ports.

WSS Germany now operates its own liferaft exchange (LRE); fire, rescue and safety (FRS) service station and is providing ships agency services via an office in Brunsbuettel at the entrance to the Kiel Canal and through sub-

agents in all other German ports.

Loos said; “For the future, we are perfectly placed to align the business with the needs of the customer to provide an extended range of services and strengthen geographical coverage to extend to all of Germany’s main ports.

“We are also planning to increase our LRE capacity to provide more space for a new technical service workshop. We are confident that we have a sound base for further growth and have initiated the right steps to be prepared for the future,” he said.

WSS Germany will showcase a number of products and services at SMM Hamburg, giving visitors the chance to talk to the product experts on a one to one basis on a range of topics, from the newest welding machine, to WSS’s new active solutions marine chemicals offer, safety services and ships agency capabilities.

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Tanker Operator Magazine Copies of Tanker Operator Magazine will be available on Stand B1.OG/400.

Editor Ian Cochran will be in attendance and can be contacted on +44 (0) 7748144265, or leave a business card on the stand.

TANKEROperator August/September 2012

INDUSTRY - COMMERCIAL OPERATIONS

Trimming the fat As tanker owners and operators look to achieve efficiency savings and streamline operations, Neil Godfrey, GAC’s Group sales director - shipping, explains how the modern ship agent is well placed to help reduce unnecessary costs. hip agents have always been an important ally for tanker owners and operators, ensuring that the needs of each vessel and each port call are effectively managed and services efficiently delivered. In recent years, we have witnessed an important diversification and expansion of the services offered by global ship agents, including GAC. More than ever before, owners need a ship agent who can streamline services and provide complete solutions to help deliver time and cost efficiencies.

A ship agent must have the local knowledge, a global network and the depth of expertise to respond to the changing needs of the tanker industry. For GAC, combining ship agency with additional services including hub agency, crew welfare, spares logistics, ship supply services, bunkering, weather routing and more, ensures that their customers have optimal opportunity to bundle services together through a single supplier and save time and money.

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Market knowledge The ship agent in tanker operations must have a sound understanding of global markets and an awareness of the challenges faced by their customers. At a time when the tanker industry is suffering from record high bunker prices, an oversupply of tonnage, low freights, muted growth in world oil demand and the significant costs of anti-sea crime efforts, the margins for error, loss or delay are slimmer than ever and the commercial consequences all the more severe. Under these challenging conditions, owners and operators can ill afford to entrust their vessels and cargoes to under-equipped, or under-experienced agents.

Local expertise This is particularly true when it comes to ensuring regulatory compliance and the correct handling of liquid bulk and gas cargoes. Here, local knowledge is key. Regulations can differ between countries and the penalties for failing to comply are a cost that cannot be afforded.

While the Federation of National Associations of Ship Brokers and Agents (FONASBA) sets practice guidelines on a global level, regional August/September 2012

member bodies can stipulate their own quality objectives. This means that service standards may vary widely from region to region, or even port to port.

Ensuring that all of the relevant authorities and organisations are engaged, the paperwork filed correctly, communication with all parties is effective and measures put in place to ensure compliance at each port call can be time consuming and complicated. Appointing experienced ship agents who are well-versed in dealing with the processes and have good working relationships with the local authorities to manage these responsibilities can help mitigate risk, as well as save time and money.

Of course, it is fundamental that just as owners and operators have to adjust their business practices to changing regulations, so too must ship agents have the necessary expertise and resources to adapt to meet changing needs.

For example, the China Maritime Safety Agency (MSA) implemented new vesselsource anti-pollution regulations effective 1st March, 2012 whereby owners and operators of vessels carrying potential polluting cargoes must work with a Government-approved Ship Pollution Response Organisation (SPRO) to establish and implement a detailed ship pollution response regime before entering, leaving or starting operations in port. As part of its agency service package in mainland China, GAC has set up a pollution control services team composed of master mariners to help guide shipowners through these measures, cutting red tape and ensuring that the master and crew can focus on operational responsibilities. It is the obligation of the ship agent to work with owners and operators to ensure adherence to all regulations from those stipulated in the International Ship and Port Facility Security Code (ISPS) to comply with the Emission Control Areas (ECA).

Global scope Of course, the modern ship agent should add value beyond port limits. Just as an agent should have local expertise, the ability to deliver services globally is central to ensuring efficiency savings can be made. As a shipping, logistics and marine services provider, GAC

TANKEROperator

has an expansive portfolio of services delivered from a network of more than 300 offices worldwide.

Package offering From global trading of bunker fuels to safe and efficient ship-to-ship transfers, weather routing and vessel protection, GAC can provide a package of services tailored to each voyage. The benefit of using a global agent is that all of these needs can be discussed, coordinated, managed and billed by a single organisation, offering a ‘total arrangement’, planned and scheduled before a vessel commences a voyage.

The ability of ship agents to deliver both breadth of services and specific expertise is becoming increasingly important as a means of limiting delays and ensuring professionalism and compliance. As an important ally, the ship agent’s role is to help drive out costs and to work with tanker owners and operators to overcome the challenges they face.

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GAC’s Neil Godfrey.

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INDUSTRY - COMMERCIAL OPERATIONS

Be aware of C/P clause wording In this article, Tanker Operator looks at the general trends in disputes under charterparties and bills of lading in the tanker sector, with Cristan Evans, a Senior Associate in the marine and international trade team of law firm Stephenson Harwood. vans said that the main trend in recent times was an increase in speed and consumption claims, as some charterers look to try claw money back from owners/managers by effectively trimming the rates payable. This is particularly common in relation to long term period fixtures, where the rates payable were agreed prior to the steep falls in the market.

He stressed the importance for owners/managers of paying careful attention to the terms of the speed and consumption warranties in their charterparties, as their obligations are defined solely by what is in the clause and what appear on their face to be the ‘usual terms’ can often produce surprising outcomes when viewed under the microscope of arbitration proceedings. One particular area of dispute in recent times has been the role of charterers’ routing companies, with charterers often seeking to bind owners/managers to their findings.

However, Evans said that owners/managers should also be reassured that they will not face speed claims if charterers order slow steaming and that arbitrators will almost always take into account navigational issues, which may have affected a vessel’s performance, in particular where they are ex mariners.

Turning to the aftermath of piracy cases, especially the increased in tanker hijackings seen off West Africa recently where the cargo was stolen, Evans warned that owners need to be aware that claims maybe pursued by cargo interests on the basis of the vessel’s ‘unseaworthiness’ and that in these stolen cargo cases claims usually amount to several million dollars.

He said that the pirates operating off West Africa appear to be very professional in that they know which of the crew they needed for ship-to-ship transfer operations and they usually disable the SSAS shortly after coming on board and remove the vessel’s satellite phone and VDR when they leave to try to remove the evidence.

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Evans advised owners and operators entering into timecharters to pay close attention to the War Risk clause to ensure that this covered the risk of attacks by pirates as the precise terms will vary under different charter forms. For example, the printed terms of the Shelltime 4 form do not cover attacks by pirates, whereas under the Conwartime 2004 clause, ‘acts of piracy’ will be included as a War Risk (and the level of risk which must exist before owners can rely on the clause is relatively low).

The position is more difficult in relation to voyage charters, or timecharter trips providing for discharge at the West African ports (or more often by way of STS off those ports), as in these circumstances owners have expressly agreed to send their ship to area where there is a risk of piracy. In these cases, owners will only be able to rely on the War Risk clause if they can show that the risk of an attack has increased in the period since they entered into the charterparty.

Common sense Evans advised owners/managers to take all reasonable precautions and to use common sense when their vessels are due to call at West African ports, or transit off West Africa.

While Best Management Practice 4 (BMP4) is designed for the Gulf of Aden/Indian Ocean High Risk Areas (HRAs), the recommendations should be followed insofar as they are relevant to discharge operations off West Africa. This would include the provision of vessels with the recommended anti-piracy equipment (razor wire, dummies etc) and ensuring that their officers and crews have the appropriate training and drills before the voyages.

Evans also said that he had also encountered problems with armed guards being on board tankers. While owners have been keen to put them on board their vessels, charterers are wary of using armed guards, especially if a particular vessel is loaded with a cargo, such

as gasoil.

He thought that another problem arising out of today’s economic difficulties was the ease of which courts granted beleaguered owners’ protection, such as Chapter XI. The US Courts had been very quick to assume jurisdiction in such cases and the granting of Chapter XI protection could have a significant impact on the owners’ relationship with their counterparties – for example, it might prevent the arrest of the owners’ ships by parties seeking security for claims and could also prevent parties from cancelling their contracts.

Another related theme Evans identified was that the banks appeared to be increasingly willing to pull the plug on cash-strapped owners much more quickly, partly because they want to avoid the risk of owners obtaining Chapter XI protection.

As for the problem of Time Bars, which have received publicity recently with the announcement of a system offered by DADesk to take on the problem for operators (see page 37), Evans advised that the easiest way to avoid difficulties was to include all of the documents, which might conceivably be relevant to a claim in the package supplied to charterers.

Owners and operators should also be alive to the documentary requirements of their charterparties during operations, for example where the terms require letters of protest to be issued and then included in the package of documents for charterers.

Another technical point, which should be checked is that many charterers specify a particular address, fax number or, more commonly, email address to which claims must be sent and such provisions must be complied with. Owners should also take care when notifying charterers of claims via brokers, as Evans has experience of a number of cases in recent years where claims have been time-barred because brokers have failed to pass on all of the required documents.

TO

TANKEROperator August/September 2012

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INDUSTRY - COMMERCIAL OPERATIONS

Clarifying liberty in CONWARTIME clause On 11th July 2012, Teare J handed down a judgment that is significant for shipowners, timecharterers and their legal advisors when dealing with the liberty in the CONWARTIME Clause to reject a voyage order because of the exposure to War Risks, including the risk of piracy* ince the Court of Appeal decision in the Product Star No 2 (Product Star No 2 [1993] 2 Lloyd’s Rep 397), it has often been argued that there should be a twofold test: the first is whether it appears in the owners’ reasonable judgement that there is a real likelihood of exposure to War Risks; the second is whether there has been a material increase in that risk between the date of the charterparty and the date of the voyage order.

Analysis of the first part is by no means an easy matter. The second part adds a layer of complexity and gives rise to potential inconsistencies in a chain of charters, where there are significant differences between the dates of the respective charters.

Teare J’s judgment will be welcomed because it appears to remove the need for the second part of the test by confining the judgment in the Product Star to its specific facts and rejecting it as a judgment of general application.

The case before Teare J concerned a chain

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of three materially back to back timecharters for Paiwan Wisdom. Each charter contained the CONWARTIME 2004 Clause which states: “The vessel, unless the written consent of the owners be first obtained, shall not be ordered to ... any port, place, area or zone ... where it appears that the vessel ... in the reasonable judgement of the ... owners, may be ... exposed to War Risks ...�

The sub-sub charterparty was concluded on 25th March 2010. On 23rd April 2010, the sub-sub charterers gave an order for a laden voyage from Hoping, Taiwan to Mombasa, Kenya. The order was relayed up the chain of charters to the head owners. They rejected it.

The basis for the rejection (which was relayed down the chain) was that it exposed the crew to the risk of piracy. The owners invoked the liberty in the CONWARTIME Clause, which covers acts of piracy as a war risk. This resulted in a dispute under all three charters and the matter was referred to arbitration.

Part of the charterers’ case in arbitration was that the owners were precluded from relying

on the liberty in the CONWARTIME to refuse the order because there had been no material increase in the risk associated with the voyage instructions in question between the date of the charterparty and the date of the instructions.

The charterers relied upon the Court of Appeal’s judgment in the Product Star. This point was determined as a preliminary issue.

In a majority award, the tribunal distinguished the Product Star on its facts and disagreed that it was authority for the proposition that the liberty in the CONWARTIME can never be invoked unless the War Risks in question have altered in kind or increased significantly from the risks existing at the time of the charter.

The conclusion was that there was no requirement for such an increase in risk.

The charterers were granted permission to appeal the relevant question of law under Section 69 of the Arbitration Act 1996.

The appeal Before Teare J, the charterers argued that the

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INDUSTRY - COMMERCIAL OPERATIONS principles of the Product Star judgment required the dangers presented by War Risks at the time of the order to be greater than those existing at the date of the charterparty.

They argued that a War Risks clause (such as CONWARTIME) must be read in light of the charterparty as a whole and in its factual matrix, with the burden being upon the owners to show that they are entitled to invoke it.

They pointed to the provisions of Clause 50 of the charterparty, which required the vessel to trade within Institute Warranty Limits, and expressly excluded, allowed and/or imposed conditions on trade into certain countries, ports or places, including a provision that expressly allowed the vessel to pass the Gulf of Aden, subject to H&M insurance authorisation.

The charterers argued that these provisions indicated that the parties had given detailed thought to the risks of trading to places in East Africa and agreed only to exclude Eritrea, Ethiopia and Somalia, but not Kenya. On that basis, it was submitted that the risk of acts of piracy when trading to Kenya prevailing at the date of the charterparty were allocated and paid for by the charterers and the owners were

therefore not entitled to invoke the CONWARTIME provisions and refuse the order to carry cargo to Mombasa.

They submitted that it would not make commercial sense for trading to Kenya to be permitted at the outset of the charter period, but for owners to be entitled to refuse to trade to Kenya if, on the second day of the charter period, they were given instructions to go there.

The owners’ response was that there is no suggestion in the words of the CONWARTIME clause that it only applies to war risks that have escalated since the date of the charterparty. On their face, they only require that the owners form a reasonable judgment that the vessel may be, or is likely to be exposed to War Risks. There is nothing in the clause which states that the word ‘dangerous’ only encompasses new, or increased dangers. Further, the Product Star is a materially different case both in respect of the factual matrix and the terms of the charterparty, where the War Risk clause did not have the same structure or wording as the CONWARTIME clause.

In particular, by contrast to the facts in the

Product Star, the charterers were not the stateowned carriers for the nation of Kenya. The charterparties were not entered into in order to fulfil COAs for the carriage of goods to or from Kenya. There was no discussion of voyages to/from Kenya when the charterparty was negotiated and concluded. The result was that, although the charterparty was for worldwide trading, subject to specific exclusions and Kenya was not one of those exclusions, the owners had no reason to expect the vessel to be ordered to Kenya; nor that the charterers would insist on such a voyage being conducted by a route to the north of Madagascar.

In addition, there was no objective reason to see the exclusion in Clause 50 in respect of Eritrea and Somalia to be related to piracy risks at all. Along with Ethiopia, both countries had long been excluded under many trading limits clauses because of long-standing instability, resulting in internal strife in each country, as well as on/off cross-border conflicts between them.

These problems affected all three countries long before piracy became a concern in the region, just as it did in many of the other

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INDUSTRY - COMMERCIAL OPERATIONS countries specifically excluded. The significance of these exclusions was not that they indicated that the owners regarded the War Risks (or other risks) current at the time of the charterparty to be unacceptable, let alone that they gave specific thought to piracy as distinct from other War Risks. Owners wanted these countries excluded irrespective of whether, or not they would be entitled to refuse orders under the CONWARTIME clause, or other contractual provisions.

The judgment Teare J rejected the charterers’ contention in respect of Clause 50. While he accepted that Kenya was within Institute Warranty Limits and was not an excluded country, the CONWARTIME clause provides that an owner may refuse to proceed to a place which is dangerous on account of War Risks. It does not contain a requirement that the relevant War Risks must have escalated since the date of the charterparty.

The words ‘Passing Gulf of Aden always allowed with H&M insurance authorisation’ in Clause 50 indicated the owners’ agreement to pass through the Gulf of Aden. The owners would therefore not be entitled to refuse, pursuant to the CONWARTIME clause, to pass through the Gulf of Aden on account of there being a danger of an attack by pirates.

That is because the CONWARTIME clause must be read in the light of the charterparty as a whole, including Clause 50. Clause 50 contains an express agreement to pass through the Gulf of Aden and so it would be inconsistent with that express agreement to construe the CONWARTIME clause in such a way as to permit the owners to refuse to pass through the Gulf of Aden.

The presence in the Gulf of Aden of naval forces and a convoy system explains why the owners agreed to pass through the Gulf of Aden. That agreement is no warrant for construing Clause 50 as an agreement by the owners that the vessel shall proceed to any port, or place on the east coast of Africa (other than the excluded countries of Eritrea, Ethiopia and Somalia), where there is a risk of piracy but no naval forces or convoy system.

The charterers may direct that the vessel proceeds to Mombasa, but the owners have liberty to refuse to proceed through the Indian Ocean to Mombasa if, within the meaning of the CONWARTIME clause, there is a real likelihood of the vessel being exposed to acts of piracy on such a route. The CONWARTIME clause contains no requirement that any such likelihood should have materially increased from the date of the charterparty.

An important point of distinction between the facts in the Paiwan Wisdom and the Product Star is that the latter had a specific term in its charterparty regarding the payment of War Risk insurance by the charterers for the very place to which the vessel was ordered.

In conclusion, the Paiwan Wisdom was not a case in which the owners had, by the terms of the charterparty construed in its factual context, accepted the risk of piracy in trading to Mombasa, Kenya and they were in principle entitled to exercise the liberty on the CONWARTIME clause to refuse the order to go there by reference to that risk.

The Appeal was dismissed and permission to appeal to the Court of Appeal was refused.

This is a key decision for both owners and charterers to be aware of, as it clarifies the operation of the liberty in the CONWARTIME

clause. The case is also relevant to charters that do not incorporate the CONWARTIME clause, as the wording in the Product Star case itself was a bespoke War Risks clause and CONWARTIME was not included.

Interpretation Every War Risks clause must be interpreted in the light of the particular clause, charter wording and specific factual circumstances.

However, there is apparently no general rule that the risks must increase/escalate for owners to be entitled to refuse orders pursuant to the War Risks clause.

In light of this case, owners fixing vessels should continue to specifically exclude countries/ports they view as excessively risky.

The rights exercisable by owners under the War Risks clause should be viewed as a fall back to these specific exclusions. Charterers will of course want to continue to reduce exclusions to a commercially achievable minimum and to specifically include countries/ports involved in any known trades.

In this way, charterers can seek to reduce the likelihood that owners will be entitled to refuse orders under the relevant War Risks TO clause.

*This article was written by James Mackay and Alex Kemp, partner and associate in the Shipping & Transport Group of Holman Fenwick Willan LLP respectively, who have the conduct of the Paiwan Wisdom case for one of the intermediate charterers and who handle a substantial number of contractual disputes and associated issues arising from hijacks and other maritime casualties.

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TANKEROperator August/September 2012

INDUSTRY - COMMERCIAL OPERATIONS

DA-Desk focuses on time bars In the shipping industry, managing time bars within pre-agreed time limitations is a tedious and labour intensive process involving busy operations personnel who probably have higher priorities. verwhelmed by many administrative tasks, many operations departments simply don’t have the time, or resources to follow up with agents and re-bill charterers.

Consequently, they may forfeit on their right to be recompensed for expenses advanced if invoices do not arrive in a timely manner from the agent, warned port disbursement management service concern DA-Desk.

The amounts involved may not be large in each particular case, but in collective terms across the entire fleet, they may add up to a substantial figure.

The risk increases if the fleet is exposed to the unpredictable nature of the spot market.

There is customarily no agreement between the agent and the charterer to pay port expenses directly; hence, this can lengthen the negotiation and result in further loss of valuable time and cause a strain on the relationship with the agent prior to the port call.

Although agents are not obstructive, they generally have no incentive to send charterers’ expenses within the time bar period and, in addition, might not necessarily have any knowledge of the time bar agreement.

A standard clause in the agency appointment letter is usually all the information that an agent has regarding the time bar and charterer’s expenses. Thus, the vessel operators themselves have to follow up with the agents, so the process of following up – especially where there are multiple load and discharge ports – must be in place, DA-Desk said.

However, the management of this process is another routine administrative procedure that tends to be very time consuming. Realisng this, DA-Desk has come up with a solution to the problem.

DA-Desk has developed a management tool to identify and ensure conventional charterers’ expenses and those outlined in Worldscale, or in the governing charterparty, are re-billed to charterers within the agreed time limitations.

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August/September 2012

Other customary charterers’ costs, such as shifting expenses and/or specific charterparty related clauses are also included within the ambit of time bar. On behalf of its customers, DA-Desk will follow up with agents, both electronically and manually, to submit invoices for re-billing costs to charterers for port calls where a time bar exists.

Various reporting tools will be utilised to keep the customer well informed of the pending, received and dispatched expenses.

Charterers’ expenses can also be re-billed with a default outlay commission, usually 2.5%, automatically applied.

Management process The vessel operator initiates the process by appointing the agent through the DA-Desk system. By default, the agreed customer time bar setting applies or, alternatively the operator can select ‘As per the C/P’ and specify a time bar.

This entry then sets up the time bar notification in the appointment letter that is sent to the agent.

After the vessel departs, DA-Desk will send a weekly email to agents reminding them to submit to DA-Desk the invoices for charterers’ expenses within the time bar period, or confirm no charterers’ costs were incurred.

Subsequent weekly reminders will then be sent to agents until either the invoices have been received or the time bar period has lapsed. Where agents do not respond to the email reminders, DA-Desk will call the agent.

The first time bar report to the customer will be sent on the Monday immediately following the departure of the vessel. This report details all port calls where invoices for charterers’ expenses requested from the agents are still outstanding, indicating the time bar period and the number of days remaining before expiry of the time bar.

In addition, DA-Desk will send a weekly report detailing port calls where invoices for re-billing have been received and dispatched to the customer, or where the agent has

TANKEROperator .

indicated, among others, that expenses will be recovered directly from the charterer; no expenses were incurred for charterer’s account; or invoices will only be received after expiry of the time bar period.

Talking with Tanker Operator, DA-Desk’s operations director Ken Anderson explained that the time bar slippage is due to a lack of time and not a lack of vigilance.

“Often, operators will have to come in at the weekends to complete various administrative tasks, which add little value to the individual or the company. Disbursement account (DA) approval is usually carried out by busy operators, not low paid clerks, who have to check both the pro-forma disbursement account (PDA) and the final disbursement account (FDA).

DA-Desk fulfils these administrative tasks relating to the PDA and the FDA, thus enabling the operators to concentrate their time on operating vessels more effectively,” Anderson said.

A company operating a large fleet on the spot market will have more DAs to deal with and less time between calls; therefore, time will be at a premium. Essentially, DA-Desk gives valuable time back to the operators.

“And because our primary focus and key

DA-Desk’s Ken Anderson.

37

INDUSTRY - COMMERCIAL OPERATIONS competency is DA processing, the operators are assured of quality work in this regard,” he claimed.

He further explained that the agent is initially informed by the operator of any time bars, which may apply via a clause in the ‘Agent’s Instructions’ and this is sent prior to the vessel’s arrival.

The responsibility for any time bar will always lie with the operator; DA-Desk’s service assists the operator with a follow up procedure (via emails and even phone calls, if necessary) to remind the agent well before the time bar expires.

Turning to the multi-berth problem, he said that many charterparties are fixed for ‘one safe berth’. However, cargoes are bought and sold en route and vessels may have to ‘shift’ from one berth to another, the cost of which would be borne by the charterer.

Each ‘shifting’ can be attributed to a specific charter and therefore the process of shifting does not exacerbate the problem. DADesk would count this as one port call even if there were multiple ‘shifts’ involved.

“While the amounts of money involved are small relative to the cost of the charter or the cargo, we have regularly seen amounts topping $60,000, with the largest amounts

being around $140,000*. In this present market, many would agree that these are significant amounts,” he said.

“We assist the operator in the timely preparation of the invoice with documentation but the actual collection of the invoice is a matter for the operator. Since we are not involved in the collection, we do not witness any disputes.

“The terms are clearly set out in the charter parties and under Worldscale, as long as the claims are raised in a timely fashion with good documentation, they should be settled without dispute,” he explained.

Anderson claimed that DA-Desk has seen cases before the company became involved where the time bar had expired and amounts similar to the above have been lost.

In recent years, oil majors and large trading houses have tightened their belts, as previously, some allowances were made for late submission (one or two days), but this is no longer the case. In one instance, DA-Desk assisted in saving an operator over $100,000 over three port calls.

DA-Desk currently serves eight of the 15 largest tanker operators, listed in Tanker Operators Top 30 tanker companies published in March of this year.

In terms of deadweight tonnage, DA-Desk’s current market exposure is estimated to be around 30% of the oil tanker market and 40% of the chemical tanker market**.

At present, the company has nearly 20 customers using its time bar management service, which is a free service to customers.

Stena Weco is one customer. Manager for worldwide commercial operations Johan Jäwert commented: “For Stena Weco, the time bar function is very important in making sure that we are not time-barred for any port cost that is for charterer’s account.”

TO * Fairway dues and standby tugs in Finland. **Based on: Stopford, M (2008), Maritime Economics, p 69.

What is a time bar?

A time bar refers to the stoppage placed on the exercise of a claim, judgment, or right after passage of a certain period (eg 90 days within which if a party has not submitted a written claim, any such claim is deemed waived and absolutely barred).

DA-Desk introduces Vendor Direct DA-Desk has also unveiled Vendor Direct, a new service designed to manage all nondisbursement account-related invoices.

This service automates the processes required to handle the thousands of individual invoices that cross an operator’s desk, freeing the operator to focus on other, more important business issues.

“Our customers have been talking with us about the pressures regarding current business demands,” said Ian Baker, business development manager, DA-Desk. “For example, operators have told us that the process of initiating, monitoring, settling, accounting and reconciling thousands of individual voyage-related transactions is a constant and time-consuming challenge. So in response to their need, we have utilised our experience with DA’s to create this new service.”

Vendor Direct automates transactions that are typically single-cost items with single,

38

balance-only payments that go through a lengthy purchase-to-pay process. These transactions involve a wide array of counterparty types, including surveyors, vessel suppliers, mooring companies, transiting passage pilots and offshore security services.

It allows operators to systematically offload cumbersome transactions to DADesk through the simple issuance of a vendor service request (VSR). The requests automate and standardise the process so operators can use their time to analyse and benchmark transactions.

Customers who also use the DA-Desk PortPayables service will gain payment settlement savings, due to PortPayables’ zero transaction costs and the ability to pay in multiple currencies with highly competitive foreign exchange rates.

In addition, because vendor invoices are reviewed, queried and crosschecked, invoice errors are detected and credit notes can be issued. Plus operators can realise space and cost savings from no longer having to

physically store the paperwork.

Customers who use the Vendor Direct service will also benefit from another DADesk service, DA-Compliance, which aims to minimise exposure to legal, financial, transactional, regulatory and operational risks, the company claimed.

Through DA-Compliance, operators receive an automated sanctions-compliance screening of vendors, agents and transactions, powered by Dow Jones Sanction Alert. This fully managed data service is designed for transaction filtering and uses reliable, accurate, timely sanctions information. The system is based on a list of 16 key sanctions covering all major regulatory regimes.

According to NORDEN’s Jacob Koch Nielsen, “Vendor Direct is a tool that streamlines payments to our vendors in all aspects. As a bonus, we get fast access to statistics on all our vendors, which enables us to make better vendor agreements in the future.”

TANKEROperator August/September 2012

INDUSTRY - SHIPMANAGEMENT

Effective internal audits essential Internal audit is an important part of the effectiveness of a company’s safety management system (SMS). However, even today it has been misunderstood both by ship and office personnel*. nternal audits provide a number of important services to company management. These include detecting and preventing deficiencies, which can result to an incident, or an accident, testing internal control and monitoring compliance with company policy and safety procedures.

Establishing an internal audit function provides a vital step in the growth of the company and its fleet.

Although the shipping industry has identified monitoring mechanisms to ensure correct implementation of a company’s SMS on board ships, still accidents happen, major ones and we are still observers, just watching it happen.

For example 44 dead in 39 days – amazing statistics – Jian Fu Star sank on 27th October 2010, Nasco Diamond sank on 10th November 2010 and finally Hong Wei which went down on 10th December 2010.

Neither Erika, nor Prestige showed us the way to correct things and prevent accidents, when newbuildings hit the rocks off an island in the middle of nowhere – Oliva and unfortunately Rena few months ago in New Zealand.

As I explained above, recognising the ‘discomfort’ the word audit usually elicits and after having conducted hundreds of audits, I have to admit that Masters and senior officers are not comfortable with the idea of being audited. They think that this is a kind of examination, but it isn’t.

For example, who can say today what the difference is between an internal audit and the visit of a superintendent on board a ship, two procedures which are so close but at the same time, so far away. Why don’t attendance reports have the format of an internal audit checklist?

Because during the attendance the Master or the Chief Engineer can disclose – unofficially - to the company’s representative a serious defect but during an audit this is totally unacceptable. One can examine the accidents and it will be seen that most of the vessels involved had a blank ‘criminal record’ and

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what does it mean; zero non – conformities during internal/external audits and good reports uploaded by third party inspections (PSC, Flag, etc) which means blank reports, or three to four minor observation recorded, so it is surprising how these vessels are involved in a major accident?

Given the scope, objectives and functions of internal audits on board ships today are of critical value for several reasons all of which are well known: It is potentially of major importance, as an effective internal audit system leads to improved accountability, ethical and professional practices.

It can improve the quality of output, support decision making and performance tracking.

It has the potential to act as an independent and objective appraisal mechanism and its findings and recommendations can act as a tool enabling the company, or department within which it functions, to take suitable corrective and preventive actions.

It is also necessary to highlight the difference that exists between auditing on board, or in the office by an in-house, or by a private auditor; the in-house auditor’s opinion serves the interest of the company and is not confined to only providing a full and fair view to the management, as is the case of an-unannounced internal audit by a private auditor.

Why is the preparation for the execution of an audit, the advanced notice from the office to the ship and its senior officers necessary, if all the integrated management systems and procedures ‘shout’ that the ship must be always prepared for any kind of inspection at any time?

Lack of initiative In real life, things are much different. Perhaps we are pointing the wrong way; we cultivate people on board to fill in checklists and people in the office filing them in the correct folder, which corresponds to the specific company’s

procedure, ignoring that this is holding them back by removing any trace of initiative, which could change their mindset and safety culture.

With the expanded and extended role of internal audits now stretching beyond their traditional focus on ISM Code compliance, to encompass an assessment of the company’s SMS efficiency and effectiveness achieving its objectives, internal audits have become a management tool. Overall best practices in internal control and internal audits will generate key benefits.

The overall design of the internal audit system, including best practices, should be geared towards the specific priorities of the company taking into account its own circumstances and requirements for the sole purpose of preventing incidents/accidents.

But an overall best practices framework is necessary to evaluate the adequacy of internal controls and the performance of the company and its fleet, as well as of the internal audit.

Best practices could include those relating to roles, responsibilities and authorities plus an overview of the internal audit, resourcing the internal audit function, planning internal audit’s activities, audit processes and evaluating internal audit’s performance.

How many Masters do you know who point out non – conformities and send them to their DPAs, how many DPAs do you know who applaud this process?

The audit function is not an examination, is not something personal between departments, Masters, or superintendents. It should be ALWAYS seen as being part of the management function both on board and ashore and increasingly as a way for improving the performance both in the office and the vessel. This should be pointed out to all personnel involved in shipping to prevent incidents/accidents and save human life and TO the environment. *This article was written by Capt Andreas Togantzis, Master Mariner, MNI, MBA, HSQE, marine & risk manager, DPA/CSO, United International Management.

TANKEROperator August/September 2012

INDUSTRY - SHIPMANAGEMENT

Shipboard management software success ABS Nautical Systems (ABSNS) has added three more tanker companies to its portfolio of clients signing up to its newbuild program. ujian-based Tuofo Shipping Management will implement the hull inspection, maintenance & repair and energy & environmental modules on two of the company’s newly built tankers.

Without a current system in place, the Fujian-based company said that it was looking for a proven solution for fleet management.

Bremen-based Sloman Neptun, will install the hull inspection and maintenance & repair modules on three of their newly built chemical tankers and will also install the drawings management module in the company’s central office location.

The company said that it wanted a system that had the ability to fully track and monitor the condition of the vessels.

Finally, Athens-based Stealth Maritime Corporation has been added to ABS Nautical Systems’ growing list of recently signed customers in Greece. The company will implement the hull inspection module on two of its liquefied petroleum gas vessels early next year.

The newbuild program’s offerings provide these companies with the ability to streamline processes while improving cost and efficiency, ABSNS said. Free software is currently on offer for a 12-month period on all ABSclassed vessels built after 1st January 2009.

“In targeting new opportunities, we take advantage of the extended ABS network around the world and the relationships they have with some of the most prestigious shipowners and operators. Taking advantage of these relationships lends us insights into the maritime industry and we use this knowledge to apply our resources in ways that best support our customers and the industry as a whole,” said Joe Woods, ABSNS senior vice president, global sales and marketing.

ABS marine newbuild program is offered free for hull inspection, maintenance management and energy & environmental

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August/September 2012

management software to all ABS-classed vessels built after 1st January 2009.

Claimed to be one of the first classintegrated, fleet maintenance solutions available to the maritime industry, the newbuild program has the potential to change how classification is managed in the future.

By linking ship maintenance software with classification and survey requirements, the newbuild program has the ability to streamline the vessel owner’s inspection process and provide a more cost-efficient and effective method of monitoring long-term ship maintenance and integrity.

The newbuild program includes three software specific modules programmed with the technical data specific to the newly built vessel - hull inspection, maintenance manager and energy & environmental manager. All three modules are also offered in NS5 Enterprise, ABSNS current suite of software products.

Hull inspection The hull inspection module is a browser-based tool that helps track the condition of a vessel’s structure throughout its service life.

Designed for owners and operators, the program provides an electronic model of the vessel with vessel-specific compartment data and critical areas identified, along with an asset-specific hull maintenance manual that outlines the compartments/spaces to inspect, critical areas to examine and identifies intervals for inspection. It also includes tools for scheduling, recording and reporting inspections.

By identifying potential problems and critical inspections areas, the hull inspection module makes it possible for fleet managers to take preventative measures to reduce risks and increase productivity in a more cost effective manner, ABSNS said.

The maintenance manager module manages functions of vessel maintenance and is claimed

TANKEROperator

to be one of the industry’s leading planned maintenance programs.

The module includes tools to develop a maintenance program, document repair history, review completed work orders, create service requisitions and monitor progress of class surveys and certificates by linking to ABS’ survey manager program.

It allows vessel owners and operators to easily identify ship maintenance trends and efficiently plan for future maintenance work and subsequent staffing needs. As part of ABS’ marine newbuild program, the maintenance manager module will be provided with technical information, already included

by ABS with information obtained during the newbuilding phase.

Energy & environmental manager The energy & environmental manager is a complete solution that provides a platform for effective, efficient and environmentally sound voyage management.

The software provides easy-to-use data entry forms that can be populated manually or automatically. The automated feature, powered

by ESRG’s OstiaEdge software gives users access to integrated, real-time analytics of shipboard equipment and automates the data collection necessary for environmental reporting, leading to fewer non-compliance events.

Business intelligence features include a drill-down capability that allows the operator to click to the data at a component level.

Customisable dashboards provide all personnel access to the same information for trending purposes, leading to improved vessel and fleet performance and fuel efficiency.

This software also makes it possible to track and record key voyage related events, including ballast activities, fuel and lube oil consumption and fuel oil switching.

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INDUSTRY - SHIPMANAGEMENT

Wallem in Singapore shipmanagement joint venture Wallem Shipmanagement has launched a joint venture shipmanagement partnership in Singapore with Nanjing Tanker Corp. he new company, NW Shipmanagement, represents Wallem’s first shipmanagement presence in Singapore, the company said.

NW Shipmanagement is a partnership between an established tanker owner and an experienced tanker manager with a common goal – to build and maintain an excellent reputation in the bulk liquid trading marketplace.

Simon Doughty, Wallem Group managing director, said the new venture would further grow the company’s reputation in managing tankers.

“Wallem already manages 130 tanker vessels, putting NW Shipmanagement in a good position to draw on our experience in managing the vessels to international standards,” Doughty said.

“NW Shipmanagement’s staff will use Wallem’s systems and processes to manage the vessels safely and efficiently. Both Wallem and Nanjing Tanker Corp pride ourselves on high quality, making this a partnership with a strong foundation and common understanding.

“This venture is also an opportunity for us to invest in more Chinese officers with tanker experience, providing longer term solutions to the current shortage of seafarers,” he said.

Wallem has had a presence in Singapore for more than 50 years. The 90-person strong office specialises in ship agency services.

Wallem Shipping Singapore offers owners services, including drydocking, dry and wet cargo operations, port captaincy and ship bunkering services.

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Asset management Wallem also now supports many financial institutions in asset management, leveraging the company’s expertise in technical and commercial management.

The team provides services from vessel 42

Simon Doughty seen with Zhu Ning, vice president of Sinotrans at the opening of the new venture.

takeover and situation assessment, to maintenance and employment for future earning potential. Alternatively, vessels are prepared for sale through the Wallem sale and purchase team.

Wallem currently technically and commercially manages 26 vessels, which have come through relationships with banks, the majority of which have come through Northern European banks.

Wallem is in a unique position to offer a service to banks, or shipowners looking to restructure, with a combination of technical and commercial management expertise. This allows an owner to decide how he or she wishes to proceed with a vessel. For example, some wish to prepare it immediately for sale and the S&P team can arrange for this.

Others wish to improve the quality of the vessel and trade it until it can be sold in a better market. Wallem said that it has the technical team to improve the vessel and a commercial management team to identify employment opportunities.

For shipowners who need to restructure, Wallem can provide a range of services, which can be outsourced from the owner to save on operational costs. These include procurement, technical and crew management in addition to commercial management.

The company claimed that no other

shipmanager provides a range of services from the operations to the commercial management of a vessel. “This is why the financial institutions have favoured Wallem and more shipowners are seeing the advantages of working with the company,” Wallem told Tanker Operator.

Several locations NW Shipmanagement in Singapore joins the Wallem Group’s other ship management offices located in Germany, Norway, China, Chile and headquarters in Hong Kong.

The Group currently manages more than 400 vessels, 43% of which are drybulk carriers and 32% are tankers.

NW Shipmanagement said that it will hire quality tanker crews from China and India with a focus on strengthening the pool of experienced tanker Chinese officers.

Wallem Shipmanagement currently has a full complement of quality Chinese crew on almost 100 ships in management.

The officers will be trained at Wallem’s Maritime Training Centre in Qingdao, China and Mumbai, India. The Qingdao Centre recently purchased a liquid cargo handling simulator and hired an experienced trainer in preparation for the increase in bulk liquid vessel crew training.

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TANKEROperator August/September 2012

INDUSTRY - SHIPMANAGEMENT

Shipmanagement safe havens for shipping lenders Many shipmanagement concerns are becoming more involved in offering technical services to banks and other financial institutions. anks are increasingly finding find themselves holding distressed assets, on the back of more and more owners defaulting on payments and builders looking to unload unwanted tonnage.

One solution is the link up between Cardiffbased Graig Group and Global Maritime Investments (GMI) to provide shipping lenders with tailor-made services for problematic shipping exposures.

Working together, the two groups will provide lenders with workout solutions, safe havens and exit routes for distressed assets and underperforming shipping portfolios. The joint approach brings together the long-term shipmanagement experience and bank contacts of Graig and the freight market expertise of GMI. Hugh Williams, CEO, Graig Group, said, “This is a slow burn crisis for shipping banks and it is by no means over. Banks are currently only really lending to offshore and LNG projects, while nursing portfolios of tankers and bulkers, which may be under the water in value terms and in many cases are underperforming as loans.

“They want a lot of ships off their books, or under better commercial and technical management and with GMI alongside us we can deliver that. We know there is a queue of shipmanagers outside every banker’s door offering technical shipmanagement and there is private equity in the market place looking to pick up opportunities.

“This link up with GMI brings the two together in a powerful combination, which can apply technical knowhow and commercial presence to help banks clean up their portfolios,” he said.

Steve Rodley, GMI managing partner said, “Our large physical portfolio and robust freight management systems provide a lowrisk pool for tonnage, which is why we are the

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charterer of choice for risk-savvy counterparties.

“Extending this expertise into managed services is straightforward and offers an optimal solution to current market challenges.

We chose to work with Graig due to their recognised excellence in technical management, in order to offer the best available product to the market.”

Bank links Graig has active shipmanagement divisions in Cardiff and Shanghai and has close links with significant shipping banks. The group already provides regular inspection services and technical support to two major shipping banks. GMI is one of the largest freight trading groups in the world.

The Graig Group is a broad-based international shipping services, shipowning and offshore group offering technical shipmanagement and commercial shipmanagement, newbuilding supervision, offshore support services, consultancy, drydock management, ship inspections, lay-up services, ship design, shipowning joint ventures and ship finance..

Graig provides technical and commercial management and crewing for a mixed fleet of vessels on behalf of a number of owners and banks and has supervised over 100 newbuildings for itself and major shipowners.

As mentioned, Graig provides technical

consultancy and management support services to two major banks with a financed fleet of over 100 vessels and also to a number of flag states. Yards and finance can be sourced for all vessel types and newbuilding supervision can be provided together with service management follow up, the company claimed.

Graig employs a global maritime workforce drawn from the UK, China, the Philippines, Vietnam, India and Russia and has offices in Cardiff, London, Oslo Shanghai and Hong Kong.

Among the group’s recent newbuilding supervision contracts was an agreement to look after 10 x 157,000 dwt Suezmaxes on behalf of Global Union Shipping of Hong Kong. The contract was won by Graig China (GCL), while the vessels are being built by Jiangsu Rongsheng Heavy Industries in China.

The last vessel in the 10-ship order is due for delivery in January 2014.

GCL is supervising – or has already delivered - 40 other newbuildings at Rongsheng. The total number of ships in GCL’s newbuilding programme is now nearing 150.

Global Union said that one of the main reasons it chose Graig for the supervision of the Suezmax newbuildings was the fact that it had been very impressed by the excellent performance of GCL and the fitting-out evident in other newbuildings in China TO supervised by Graig.

this expertise into managed services is “ Extending straightforward ...We chose to work with Graig due to their recognised excellence in technical management, in order to offer the best available product to the market.

Steve Rodley, managing partner, GMI

August/September 2012

TANKEROperator .

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INDUSTRY - SHIPMANAGEMNT

A ‘garbage time bomb’ The resulting increase of waste material and the management and disposal of it, is an ever growing problem for national and international organisations alike, a ‘Garbage time bomb’*. n the world’s oceans there are five regions of circulating ocean currents, known as gyres, in which floating debris tend to accumulate. Two huge regions of marine litter exist in the Pacific Ocean caused by the dumping, either collectively, or individually, of mainly plastic material.

Known as the Great Pacific Garbage Patches, they are characterised by exceptionally high concentrations of plastics, chemical sludge and other debris trapped by the currents of the North and South Pacific

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gyres.

The scale of the problem can be judged by the fact that the great pacific rubbish gyre is about the size of Texas and contains roughly 3.5 mill tonnes of rubbish, consisting of old fishing nets, plastic bottles, crisp packets, plastic containers, plastic components of all descriptions, ice cream tubs and lumps of polystyrene.

For many years and certainly up until the mid-to late 1970’s, it was generally believed that the oceans could absorb anything that was

deposited into them.

Following departure from port and once out of site of land, the ships crew felt free to dispose of all manor of garbage over the stern rail. However, in those days, the amount of packaging was far less than today and plastics were not so prominent.

Research has shown that a small piece of paper will only take two to four weeks to dissolve at sea, but a piece of painted wood will take 13 years, a tin can 100 years and a plastic bottle 450 years. Therefore, much of

TANKEROperator August/September 2012

INDUSTRY - SHIPMANAGEMENT the litter disposed of into the seas during the last century is still affecting the marine environment today.

Ships are not the only source of garbage effecting the marine environment, however, as in some areas of the world most of the rubbish found in the ocean and on the beaches comes from passing ships, which throw rubbish overboard rather than dispose of it in port.

In previous decades and in some parts of the world today, the lack of garbage reception facilities in port has left the mariner with very little choice but to dispose of garbage overboard.

Some port authorities expressed surprise when a vessel wanted to land rubbish, while the ship’s agent did not understanding why it wasn’t disposed of prior to arrival. These situations and attitudes have changed and many ports now allow for both general and recyclable garbage.

Delaying the time bomb Persuading people on land and afloat not to use the oceans as a rubbish tip is a matter of education. For the marine industry, 1988 saw

the introduction of MARPOL Annex V, which sought to eliminate and reduce the amount of garbage being dumped into the sea from ships.

The Annex forbade the dumping of plastics anywhere at sea and severely restricted the disposal of other forms of garbage, depending on geographical area, type of garbage and distance from the coast. It also obliged Governments to provide garbage reception facilities for visiting ships.

Since its introduction there has been a reduction in the amount of garbage, however, recent surveys have shown up to 10 tonnes of garbage per mile of coastline so it is clear more needs to be done.

The United Nations recognised that more needed to be done. The IMO was invited to review the Annex and to assess its effectiveness in addressing sea-based sources of marine debris.

The review commenced in October 2006 and the IMO consulted with relevant organisations and bodies worldwide. IMO’s MEPC approved amendments tothe Annex in the autumn of 2010 and they were adopted at MEPC 62 in July 2011.

They have fundamentally changed the Annex thus: Discharge of all garbage into the sea is prohibited, except as expressly provided otherwise.

The number of categories of garbage has been increased, including a definition for cargo residues.

Some cargo residues and cleaning agents can be discharged, as long as they are not harmful to the marine environment.

It is incumbent on the owner/Master to prove that discharged material is not harmful to the environment.

The requirements covering placards, garbage record books and garbage management plans have also changed.

Perspective of the problems have certainly improved in recent times but the old idea that the sea can cope with anything still prevails to some extent and it is therefore important to ensure vigorous enforcement of regulations such as MARPOL Annex V. Port State Control officers are empowered to inspect ships for compliance and where there is clear evidence that the Master and

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INDUSTRY - SHIPMANAGEMENT crew are not familiar with procedures, relating to the prevention of pollution by garbage, the ship can be detained until this is rectified. It is therefore essential to not only follow the regulations but also provide evidence that this is the case on board.

Burden of proof The combination of increased garbage categories, clearer definition and the declaration that the discharge of all garbage is prohibited unless expressly allowed has burdened the ship with additional responsibility.

Garbage that fits into a specified category can only be disposed of under certain circumstances; conversely garbage that does not fit a categorisation cannot be discharged into the ocean. The burden of proof has shifted so that the Master must now be able to prove that any discharge from his vessel will not cause harm to the marine environment.

The revised Annex has also made changes with regard to the size and type of vessel required to comply with certain regulations contained within it. Shipowners and operators

are advised to prepare for this change of emphasis with regard to marine garbage disposal by reviewing the current on board placards, log books and manuals.

Further advice can be obtained from IMO, flag states and specialist marine publishers, such as Maritime Progress.

Annex V requires every ship of 12 m, or more in length to display placards notifying everyone on board of the regulationâ&#x20AC;&#x2122;s disposal requirements. The placards should be written in the working language o the shipâ&#x20AC;&#x2122;s crew and where necessary in English, French or Spanish for ships sailing to other Statesâ&#x20AC;&#x2122; ports, or offshore terminals Garbage record book Every ship of 400 gt and above shall be provided with a garbage record book unless specifically excused by the administration.

This log book will be used to record all instances of garbage disposal both at sea and to port reception facilities.

The requirement to carry a garbage management plan has been extended to all ships of 100 gt and above. The plan is required

to have written procedures for minimising, collecting, storing, processing and disposing of garbage, including the use of equipment on board and will designate the person, or persons on board in charge of carrying out the plan.

In the previous version of Annex V, ships could under certain circumstances dispose of general garbage overboard, however, under the revised Annex, this is strictly forbidden.

Shipmanagers and port authorities need to act swiftly as these amendments enter into force on 1st January 2013. New posters, garbage management plans and record books relating to these changes will be available during the second half of 2012 from some marine publishers.

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*This article was written by Capt Andy Goldsmith, marine technical manager of Maritime Progress, manufacturer of marine signage and specialised publisher of marine books and posters.

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INDUSTRY - SHIPMANAGEMNT

ECA voyage calculations made easy The imminent tightening of fuel control areas around the US is providing ship operators/managers with a new set of challenges to face in the drive for cost effective operation.

AtoBviaC has claimed to come up with the answer to cost control during affected voyages with its new Port to Port - Online version of the established BP Shipping Marine Distance Tables.

This offers the user the ability to calculate both SECA (Sulphur Emission Control Area) distances and distances in the recently introduced North America ECA (Emission Control Area).

For vessels operating within the North American ECA, from 1st August, the sulphur content of fuel oil used on board must not exceed 1%. This is, however, only a stage in the ongoing legislative maritime timetable designed to gradually reduce harmful emissions across the globe in the course of the next decade.

“Our research has shown that it is rarely cost effective, or practical to avoid these routes entirely,” said Capt Trevor Hall, AtoBviaC director. “It is, however, essential to accurately calculate in advance the impact on vessel operating costs and to identify where a slight adjustment of route will avoid unnecessary incursion into an ECA.

“We have implemented SECA distance calculations into our distance table matrix from the time the various control areas came into effect, but with the implementation of the North American ECA, ship operators need to be aware they could incur unexpected costs if they do not make the correct provision for the additional fuel costs.”

AtoBviaC route tables provide routeing and distance information for the maritime industry, delivering high quality, realistic calculations of journey options.

This product also sees the launch of a new user friendly interface, which uses Microsoft’s Silverlight technology to provide exceptional functionality that is familiar and easy to use.

Working on a Windows PC or an Apple Mac, it now incorporates a new, easy to use purchasing structure, which enables the user to purchase a block of distances.

Ship operators can also benefit from route scanning, which provides the user with distances within the various SECAs and ECAs and distances within Load Line Zones via marine information map overlays.

All voyage reports and maps can be saved and exported in pdf and spreadsheet formats.

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INDUSTRY - P&I

International Group given the all clear What will come as something of a relief to the P&I community, the European Commission competition directorate closed its investigation into the International Group (IG) on 1st August. he EC said that it had closed its anti-trust investigation into certain provisions accompanying claimsharing and joint reinsurance agreements in the marine insurance sector.

This investigation focused on the International Group Agreement (IGA) and the Pooling Agreement between the P&I Clubs that contain rules on the sharing of insurance claims and joint reinsurance, as well as rules on the contractual relationships between the P&I Clubs and their members, the EC said in a statement.

Brussel’s aim was to examine whether certain provisions of the agreements lessened competition between P&I Clubs and/or restricted, to a certain extent, the access of commercial insurers and/or other mutual P&I insurers to the relevant markets.

After opening proceedings in August 2010, the EC said it conducted a market investigation involving shipowners, brokers and commercial insurers. The market investigation was not sufficiently conclusive to confirm the EC’s initial concerns, it said.

The agreements concluded within the IG were previously exempted from the EU’s competition rules by an EC decision of 12th April, 1999. The exemption expired on 20th February 2009, leading to the commencement of the EC’s investigations the following August.

EU competition law’s reformed procedures introduced in 2004 meant that the IG was not allowed to seek a further IGA individual exemption.

Even though the European Commission has decided to close its investigation, the IG said that it planned to make some amendments to the IGA. These are currently being finalised and details will be published in due course, the group said.

The International Chamber of Shipping (ICS), said that it welcomed the EC’s decision to close its investigation into IG’s activities.

ICS director of legal affairs, Kiran Khosla

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August/September 2012

remarked: “ICS has always firmly stated that the current system of mutual third party liability insurance provided by the International Group continues to serve the best interests of ship operators and their customers extremely well, alongside serving the interests of claimants and the general public.

“In particular, the mutual insurance arrangements provided by the Clubs enable the provision of the very high levels of insurance required under international liability conventions, under which compensation to claimants is generally paid regardless of fault and without legal wrangles,” she said.

Investigations followed ICS also said that it had has closely followed the EC investigations into the activities of the IG. The Commission had stated that it was simply conducting an investigation, and that this did not imply that there was ever any proof of infringement. It had also advised that it had opened the investigation on its own initiative and that it had not received any formal complaints, the ICS said.

In bilateral discussions with the Commission, ICS and the European Community Shipowners’ Associations (ECSA) had previously emphasised that the mutual insurance arrangements provided by the P&I Clubs are efficient and cost effective.

“We are very pleased that the Commission officials involved now appear to understand the benefits of the current system,” Khosla concluded.

Iranian/Indian puzzle Meanwhile, the Iranian situation rumbles on.

In July, the United India Insurance agreed to provide P&I cover to Indian tankers carrying oil from Iran, according to reports coming from India.

Since 1st July, 2012 European covers for shipping companies carrying fuel, or petroleum products of Iranian origin ceased under sanctions levied by the US and the EU

TANKEROperator

in protest of Iran’s nuclear programme.

India has since given state-owned insurers approval to provide limited cover to Indian ships transporting Iran’s oil allowing refiners to avoid any interruption in supply resulting from constraints on Iranian vessels struggling with Western sanctions.

According to local reports, Indian insurance firms are now allowed to provide shipowners carrying Iranian oil $50 mill P&I coverage, plus an equal amount for hull & machinery cover, although this is a fraction of the cost of P&I coverage for a VLCC. It was reported that Indian shipowners had asked for cover to lift Iranian oil, thus avoiding the sanctions.

Japanese insurance For the year ended 31st March, 2012 shipments to India from Iran fell 5.7% compared to the previous 12 months. In comparison, Japan’s Government has provided insurance of up to $7.6 bill for Iranian oil shipments to maintain trade with Iran.

Local reports said that Asian countries have been looking for ways to avoid the sanctions problem, as Iran accounts for a significant part of their oil imports, although South Korea has claimed that it had stopped all oil imports from Iran.

India was one of 20 countries who received a six-month waiver from the sanctions by decreasing its purchase of Iranian oil by more than a fifth.

The US government previously exempted Singapore and China from the sanctions allowing Singapore, the world’s largest bunkering port to purchase Iranian crude and fuel oil.

However, it has been reported recently that several leading Indian tanker owners have stopped shipping oil from Iran. Lloyd’s Maritime Intelligence reported that Mercator was the only Indian tanker owner to ship oil from Iran during July.

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Our ability to provide local knowledge and response is unmatched. In 350 ports around the world on-the-spot help and local expertise is always available to members.

INDUSTRY - PIRACY

A need for effective regulation Shipowners and operators have little choice but to adopt more robust forms of deterrence to counter the threat of piracy, warned Eric Conway MBE, managing director Protection Vessels International (PVI), talking with Tanker Operator.

Until a land-based solution is found to address the root causes of piracy, it will continue to grow and pirates will look to more sophisticated ways, including the use of GPS technologies, to target vulnerable vessels,” he said.

He said that the decision to employ privately contracted armed security personnel (PCASP) was a complex one for any shipowner, or operator. “This situation is complicated further by the rapid growth in the number of maritime security companies and the wide variances in the quality, integrity and professionalism of the services being offered,” he said.

As the maritime security industry has grown, so has the need for effective regulation. Conway said that PVI was encouraged by the IMO’s progress and its desire to establish a global standard for the use of private maritime security. This was because to maintain ‘business as usual’ had the potential to develop into a ‘race to the

“

PVI’s Eric Conway MBE.

August/September 2012

bottom’. “Lower quality, lower cost maritime security firms responding to competitive pricing in an unregulated market and gaining market share over tier one contractors can store up problems for the future,” he warned.

“This is not to say that companies like PVI currently operate in a vacuum. PVI submits its services and operatives to the most rigorous vetting criteria and procedures based on national and EU legislation on the ownership, licensing and control of firearms and ammunition, the compliance requirements enshrined in conventions, such as the International Code of Conduct (ICoC) for Private Security Service Providers and guidance published the IMO, the International Group of P&I Clubs and flag states,” Conway said.

Due diligence However, he said that until agreed, regulated and enforceable standards are brought in across the board, shipowners and operators will still need to conduct significant due diligence to ensure that the safety of their crews and vessels is in the best hands.

Turning to the perceived costs associated with the employment of armed guards while transiting a High Risk Area (HRA), Conway quoted the recently published ‘Oceans Beyond Piracy’ report on the cost of Somali Piracy to the world economy, which identified a fuel bill of $2.7 bill, resulting from increased vessel speeds transiting through HRAs, as the biggest cost factor for the shipping industry in

TANKEROperator

countering piracy.

He explained that employing PCASPs can free-up vessels to “slow steam”, “super slow steam”, or “ultra slow steam” to save fuel through HRAs. Employing PCASP can also prevent shipowners and operators from making costly re-routes.

In an earlier report from ‘Oceans Beyond Piracy’ and compiled by maritime industry experts, it was asserted 10% of vessels that would typically transit through the Gulf of Aden and Suez Canal, re-route to avoid piracy – with sailing around the Cape of Good Hope adding an extra 10 days to the average voyage time, rising to 20 days, depending on the route and type of vessels transiting.

Using the report’s conclusions as a guide, PVI calculated that a VLCC would burn 100 tonnes of fuel per day at approximately $686 (averaged across 13 key ports as of 24th May, 2012) per tonne - a 10 day re-route would cost $686,000 alone for one vessel. In addition, when taking into account the average day rate for a VLCC charter of $51,413 [Clarksons], then the extra 10 days to the journey would incur an additional $514,130 in charter fees. This amounts to more than $1.2 mill in extra costs for the charterer, before factoring in crewing, insurance and the various other opex that go with running a vessel.

A vessel employing a professional, vetted and trained security team, is the best deterrent to ensure a safe passage, allowing the master to concentrate on the efficiency of his, or her vessel, rather than the threat of piracy.

Another problem facing a shipowner today is that since the beginning of 2012, there have been numerous attacks on vessels in the Gulf of Guinea.

Pirate attacks in the Gulf of Guinea tend to be more violent than those in the Gulf of Aden, or the wider Indian Ocean.

“Although not yet on the same scale as attacks on the East coast of Africa, and not currently an active area of operations for PVI, the Gulf of Guinea is an area we are increasingly monitoring and advising clients on,” Conway concluded.

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TECHNOLOGY – ICE CLASS

Polar Code – still a long way to go Earlier this year, the IMO’s MEPC reviewed progress in the Sub-Committee on Ship Design and Equipment (DE) in developing the draft text of the mandatory Code for ships operating in polar waters (Polar Code). he Code is intended to cover the full range of shipping-related matters relevant to navigation in waters surrounding the two Poles and the protection of the unique environment and eco-systems of the Polar regions. It was noted that the intention was to develop an environmental protection chapter in the draft Polar Code.

Member states and international nongovernmental organisations in consultative status were invited to submit relevant proposals related to environmental provisions proposed to be included in the Polar Code to the next MEPC session in October 2012, with a view to providing additional guidance to the DE sub-committee for its next session in March 2013.

The MEPC agreed that the Code should be made mandatory through the adoption of appropriate amendments to the relevant annexes of SOLAS, MARPOL and other relevant environmental instruments.

One of the tasks facing the DE subcommittee is to unify the three different Ice Class notation requirements.

Also to be looked at are structures and mechanisms in what effectively is a second

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The Polar Code is still a long way off.

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Winterisation standards. Source KR.

attempt to define a set of rules for vessel operations in Polar waters.

The IMO sub-committee is also working towards the introduction of an ice certificate, which will be needed to be kept on board each vessel transiting, or calling in Polar waters.

However, according to one class society source; “There is still a long way to go.”

According to an article in class society’s Korean Register’s in-house magazine, the IMO developed guidelines for ships operating in Arctic ice-covered water in 2002 (MSC/Circ.1056 and MEPC/Circ.39).

The guidelines became mandatory in 2012.

They are called the Polar Code and focus on ship structure, safety, pollution and requirements of Arctic equipment The code was developed in 1991, when Germany suggested amendments to SOLAS Ch.II-1 as follows, ‘Ships intended for service in Polar waters should have suitable ice strengthening for Polar conditions in accordance with the rules of a recognised classification society’.

The suggestion was supported by IMO and Canada was designated as an OWG (outside working group) by DE sub-committee. Since then the main members of the OWG have discussed the issue at annual meetings supported by academic and industry input.

At the 41st DE meeting in 1998, the plan for the international safety code was submitted

by Canada and assessed by a technical committee at IMO. However, the ATCM (Antarctic Treaty Consultative Meeting) raised objections to the plan because it had not considered Antarctic’s special conditions and geographical features.

Additionally, there were corresponding political considerations, such a territorial disputes.

Despite the technical and political problems, most IMO members agreed the importance of navigation guidelines for the Polar area.

TANKEROperator August/September 2012

TECHNOLOGY - ICE CLASS Eventually, the earlier guidelines were approved in 2002.

At its 50th session in March 2007, the DE sub-committee began work on developing amendments to the Guidelines for ships operating in Arctic ice-covered waters to make them applicable to ships operating in the Antarctic Treaty Area.

At its 51st session a year later, the subcommittee continued work on developing amendments to the Guidelines for ships operating in Arctic ice-covered waters (MSC/Circ.1056 - MEPC/Circ.399), so that they were also applicable to ships operating in Antarctic waters. The amended guidelines became effective in 2011.

Test procedures The procedures for equipment test and assessments are generally divided into mechanical tests and environmental tests.

Mechanical tests include vibration resistance; vibration strength; shock strength and shock resistance. Environmental tests include heat stability; cold endurance; exposure to temperature changes and resistance to hoarfrost and dew after thawing.When tests

54

Table 1. Type of test specimen

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are performed, they need an independent test specimen (Table 1).

In terms of polar equipment tests, there are

two environmental conditions, which are normal environmental conditions and standard environmental conditions. In general, standard

TANKEROperator August/September 2012

TECHNOLOGY- ICE CLASS environmental conditions should be followed when the test is performed but if that is not possible then normal environmental conditions can be followed.

Test example Test procedures for vibration resistance & resonance are below.

If the resonant frequencies, or multiple resonant frequencies are

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Table 2. Test procedure for Vibration resistance & Resonance

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Table 3. Test procedure for Vibration resistance & Resonance (No resonant frequencies)

In conclusion, in terms of the Polar Code, new standards of equipment tests & assessments are necessary. This requires cooperation between governments and manufacturers. In light of this, the Korean Register said that is developing the relevant robust procedures and technical skills to enable its customers to comply.

NSR law passed Meanwhile, a new law regarding the Northern Sea Route (NSR), adopted by Russian legislators in July, did not include Murmansk and the Barents Sea. According to Ria Novosti, the law states that the route to the west officially stretches from the eastern coast of the Novaya Zemlya, the Kara Gate and the straits between the mainland and the island of Vaigach. To the east, the route includes the areas from the Russian-US sea border and the latitude of the Cape Dezhnev, the easternmost point on Russian territory.

Consequently, the regulations do not include the Barents Sea and the August/September 2012

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TECHNOLOGY - ICE CLASS

Equipment needs to be up to the rigours of a harsh environment.

Pechora Sea, areas, which are expected to significantly grow in shipping and industrial activities over the next few years. Both Murmansk and Arkhangelsk, Russia’s two main Arctic cities, are located outside the new definition of the Northern Sea Route territory, the agency reported.

The new law, which was adopted by the Russian State Duma in a third reading at the

56

Photo credit - VIKING.

beginning of July, will come into force in 2013.

Among the rules for vessels operating in the area are new insurance requirements, which are meant to address shipowners’ responsibility for possible environmental damage and pollution. The law also outlines the level of shipping fees, although not set in stone, saying that the rates on icebreaker

assistance will be provided based on the “extent of the services offered.”

Included in the law is the establishment of a new Northern Sea Route administration, which is to manage icebreaker and sailing Master services, as well as to provide radio communications and hydrographic information, organise search and rescue operations and prepare meaures for emergency situations. According to information website Bellona.ru, the Russian Finance Ministry is allocating RUB27 mill (€660,000) for the new administration.

The new law is a long-awaited and muchneeded piece of legislation, the agency said.

However, critics say that it does not address the environmental challenges in the vulnerable areas sufficiently.

According to Igor Kudrik from the Bellona Foundation, a major oil spill in the remote area will have huge environmental consequences for nature, and financial consequences for the shipping company. “If the shipping operators are to bear all costs related to spills, the route might ultimately not be so popular, after all,” he told Ria TO Novosti.

TANKEROperator August/September 2012

TECHNOLOGY – ICE CLASS

Driving Arctic shipping development The need for Arctic rules and regulations was clearly illustrated by a recent statement from Russian Prime Minister Dmitriy Medvedev who said that the Government expected an 8 trill ruble economic effect from the development of its continental shelf by 2030.

On the whole, the economic effect should amount – the figures are very tentative – to 8 trill rubles. The social and economic effect, or an indirect effect, is over 1.1 trill rubles,” Medvedev added.

The Government said that it expected oil production on the shelf to grow five by times and gas output to increase by four times by 2030.

“Annual oil production on the continental shelf is to increase to 66.2 mill tonnes by the time the programme ends. Let me remind you that in 2011 it was at 13 mill tonnes. Gas development will amount to 230 bill cu m, while in 2011 is stood at 57 bill cu m,” Medvedev said.

Thus far, only two of Russia’s state-run giants Rosneft and Gazprom are permitted to explore the shelf, which is claimed by Russian ministers to be insufficient.

Economic Development Minister Andrei Belousov said the projected oil output is too modest. “Given Russia’s total planned oil production of around 510 mill tonnes … and given the fact that some oil is already being developed on the shelf, it means that in 20 years - from 2020 to 2030 - the shelf’s contribution to the overall oil production will amount to less than 10% of the total output …

This is very little,” he said.

Belousov also said the programme should offer a cost recovery mechanism for private investors. At present, if a private firm discovers reserves on the shelf, it must form an alliance, or a joint venture with Rosneft of Gazprom.

“It is obvious that such a mechanism creates high risks for investors, because it is unclear whether a state–run company will agree to participate, and at what price… This is why there must be a mechanism to cut those risks for investors,” Belousov said.

Energy Minister Alexander Novak has offered holding tenders to attract private

“

August/September 2012

investors to the shelf development. He added that the current tax system does not sufficiently help with investments into new deposits, however, tax adjustments are to be prepared by October.

Medvedev appointed Deputy Prime Minister Arkady Dvorkovich, who chairs a government energy commission, to lead the shelf’s working group. Dvorkovich offered to adjust the programme within the next two to three months.

NSR transits up Meanwhile, more vessels are due to complete NSR transits this year. Vessel numbers have increased to about 34 in the three years that the route has been promoted as a short cut to and from Asia, shipping 800,000 tonnes of cargo, which included oil, condensate and iron ore. Local sources thought that the cargo could total 1.5 mill tonnes this year.

Rosatomflot, the Russian state-owned operator of nuclear icebreakers said that if conditions remain favourable, the season could last until November.

Among the vessels registered to sail from Europe to Asia is the LNG Ribera del Duero Knutsen, the world’s only ice-class 1A LNG vessel. Lloyd’s List reported that it had been booked to load a cargo of LNG at Snovit for Japan.

In the future, Russia’s independent oil major Novatek said that it intended to use the NSR to ship LNG from the Yamal field when it comes on stream, which could be as soon as 2016.

Nuclear icebreaker To cope with the extra traffic forecast, Russia’s Baltic Shipyard in St Petersburg is to build a 36.96 bill ruble ($1.15 bill) nuclearpowered icebreaker for Atomflot, the shipbuilder said, reported the RIA Novosti news agency Atomflot, which operates Russia’s

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commercial icebreaker fleet, announced an open tender in late June for a 60 MW icebreaker. Baltic Shipyard was the sole bidder in the tender.

The icebreaker is to be delivered by late 2017 and will be based at Murmansk. It is set to be floated out in November 2015, with sea trials due in August 2017 and ice trials in November 2017.

The vessel has been designed for operations in the western Arctic and shallow water areas of the Yenisei River and the Gulf of Ob. Ice breaker project In another move, the Russian Maritime Register of Shipping (RS) has signed a contract with JSC “Baltiysky Zavod Shipbuilding” to review the technical documentation on a new icebreaker design Project 22600.

The technical documentation will be reviewed for compliance with the applicable requirements of RS Rules, the provisions of international conventions and the supplementary requirements of the flag administrations in force on the date of keel laying.

If the project comes to fruition, the icebreaker will take the RS class notation КМ Icebreaker 8 [2] AUT1-ICS OMBO FF2WS DYN-POS-2EPP ANTI-ICE ECO-S HELIDECK-H WINTERIZATION (-40) Special purpose ship.

The vessel’s keel laying is scheduled for September 2012 with delivery scheduled for 2015.

The state customer under the contract is the Federal Agency of Marine and River Transport, the developer is the Federal State Unitary Enterprise ‘Rosmorport’.

There is no doubt that the cost of icebreaker assistance will be the make or break of the NSR for owners and operators.

Leveraged too high and owners/operators will revert to the more traditional routes, except those using Arctic ports.

TO 57

TECHNOLOGY - ICE CLASS

Help available for foreign vessel NSR transits Wilhelmsen Ships Service (WSS) is also helping clients execute voyages through the Northern Sea Route (NSR) as this new trade lane begins to open up new opportunities for shipping.

SS is working with Russian Arctic shipping specialist Rosatomflot to provide icebreaking assistance and has developed a programme to assists clients with technical, legal and insurance preparations they must satisfy to make the journey safely.

The NSR is currently open between 1st July and 1st November, cutting the journey time on an Europe/Asia voyage from 34 days to 22 days. This has the potential to provide substantial savings in fuel consumption and emissions, as well as hastening the development of oil and gas reserves in the Arctic, WSS said.

WSS Ships Agency service manager Eivind Jespersen said: “Our experience is that many shipowners are closely following the development of the NSR. Until now they have been reluctant to pursue this interest until their concerns are resolved. WSS Norway in partnership with WSS Russia is able to offer expert advice and assistance necessary to make voyages through the NSR a reality.”

Summer sea ice levels on the route have decreased about 12% over the last decade and the warming climate ice could bring ice-free summers by 2050, according to Norwegian Polar Institute estimates.

Russia is promoting the NSR as an alternative to routeing vessels through the Panama, or Suez Canals and its government is preparing regulations for foreign comercial vessels with the corresponding law expected to be approved by Russian parliament this year (see page 55).

WSS expertise in the region is in the field of navigation conditions and practical considerations for safe operations in the NSR. WSS has access to high quality meteorological data from the Norwegian Meteorological Institute for predictable ice conditions, including ice charts, edge positions and long

W

58

term weather prognosis.

“The NSR is a new global route and comes with significant challenges in terms of navigation but the risks can be managed by good preparation,” continued Jespersen. “We recommend extensive research and training prior to NSR voyages both on board and on shore. Highly competent crew in particular makes a huge difference.”

The average cost for a single NSR passage is about 10% greater than a Suez canal transit, however this is negotiable for multiple transits. Each transit is considered a separate project as to preparations, such as application for permission to the Russian authorities, equipment and crew training, WSS explained.

Issues that owners need to be aware of before navigating the NSR, include amendments to the terms of their P&I and hull and machinery insurance cover. In addition, paper charts and publications are in Russian only and ice pilots do not always speak languages other than Russian.

To make the journey, all vessels must comply with Russian rules for the NSR, including its guide and regulations for

navigation and pilotage, as well as requirements for vessel design and construction, ice operations and knowledge of tariffs for icebreaking services. At present it takes two to three weeks to get a ship accepted to transit the NSR and the vessel nominated must be the highest, 1A ice class.

In terms of navigation experience, WSS said that the gyro compass remains stable throughout the transit, but, as expected, the magnetic compass shows large magnetic errors. However, the GPS remains reliable and stable throughout the NSR transit.

Radar is a good aid to navigation but its limitations in ice-detecting capability should be kept in mind. X-band radar works better than S-band in these conditions, WSS said.

WSS said that it will act as agent only for principals requesting NSR transit and the principal will issue a letter of authorisation to WSS, which will negotiate the transit on their behalf.

WSS Russia operates from St Petersburg, while WSS Norway supports NSR transits from its offices in Porsgrunn, Kirkenes and TO Vardoe.

Sea ice concentration now available on AWT website As economic opportunities increase in the Polar region, AWT is assisting its clients to operate safely and efficiently in the region.

One way AWT does this is by providing sea ice concentration information on the website. AWT monitors multiple sources in order to ensure the most accurate information possible is shown.

The data is derived from the National Ice Center (NIC) and the National Center for

Environmental Predictions Marine Modeling and Analysis Branch, George Schlinkert, AWT’s vice president of operations said.

The data is therefore a combination of remotely sensed sea ice concentrations, enhanced by analysts to incorporate all additional available ice data.

The data is based on a five minute latitude/longitude grid, which equates to about one mile latitudinal spacing in the Polar region. This data is updated daily.

TANKEROperator August/September 2012

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TECHNICAL FOCUS - COMPUTERS

Quality requirements drive MAN Diesel & Turbo It is no accident that MAN Diesel & Turbo uses industrial computers from Beijer Electronics as human machine interface (HMI) for the company’s giant B&W engines, claimed the company.

AN Diesel & Turbo is the leading supplier of two- and four-stroke engines for maritime use. In recent years, demand for electronically controlled B&W two-stroke diesels has risen sharply together with advanced control systems that manage fuel injection and compression contribute to better fuel economy and reduced emissions.

With the progressive tightening of environmental requirements, shipowners are also increasingly interested in installing electronic control on board existing vessels.

As a bonus, modern control systems also facilitate operation and maintenance by the crew, including lubrication of the engines.

To prevent and avoid potentially costly problems, the engine control system consists entirely of carefully selected, high-quality electronic components, such as computers.

Vital functions are also duplicated.

Since the summer of 2011, Beijer’s robust industrial computers have been used for the on board systems. In the first six months, or so since deliveries started, around 150 computers from the EPC series have been commissioned: “Without a single complaint,” stressed Kennet Palm, head of hardware development at MAN Diesel & Turbo, who is responsible for all the hardware used in the control electronics.

The EPC boxes are specially designed and made for maximum reliability in the most demanding environments. Private PC buyers are mainly concerned with performance and low price. The occasional ‘blue screen’ may be irritating, but it is not a major problem. It is quite different at sea – particularly on a large tanker.

When MAN Diesel & Turbo chooses components for its electronic control systems, reliability combined with a long service life is crucial. “We build engines with a lifetime of 30 years, which have to work day in, day out

M

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in a tough maritime environment with all that this implies in terms of heat, humidity and vibration,” Palm said, emphasising that naturally, factors like purchase cost and warranties are not irrelevant either.

A secure supply of products and spare parts, with ‘just in time’ delivery, is just as high on the agenda: “To guarantee the supply of components, we made a decision at the group level to have two, or preferably three, alternative sources for every key product that we need.”

The adoption of Beijer as one of very few PC suppliers to MAN Diesel & Turbo was a lengthy process. The EPC boxes were tested, methodically and very thoroughly, over a long period.

Niels Torres Engel and Thomas Lehnemann, who are responsible for research and reliability, left nothing to chance. For rigorous testing, they have a small so called ‘torture chamber’ at their disposal in the company’s R&D division.

“Among the formal requirements, the products have to be type-approved by the leading maritime classification associations,” said Engel, explaining that, after the preliminary screening, the different computers are installed in test beds to confirm their compatibility, performance and quality.

Harsh environment Checks are made to ensure that the computers will still work in 70 deg C temperatures.

Beijer’s EPC boxes met this challenge, as well as the vibration and humidity tests. “By ‘stressing’ the products, we pick up any faults that might not show up at first,” Lehnemann said.

Lehnemann also stressed the importance of ensuring that manufacturers do not make any sudden design modifications. Even minor

changes to components can affect the programs running in the computer. “We perform constant spot-checks to ensure that the equipment supplied is up to the mark and we are in constant contact with our partners,” he said.

The partnership with Beijer is described by MAN as personal, relaxed and good. As Palm said, if communication with the suppliers isn’t working, it doesn’t matter how good the products are: “We feel that our wishes are listened to and we get all the help we need.”

Difficult customer Engel agreed, however, freely admitting that MAN Diesel & Turbo could be described as a ‘difficult’ customer: “Although we’re not buying vast quantities of industrial computers, we are extremely fussy about the quality of what we get. Not just that the collaboration works well; it also saves time because all EPC boxes are supplied pre-configured.”

The computers supplied are ready to use out of the box. The operating system and the relevant drivers and programs are already installed before delivery. If a control computer should fail, the crew on board can re-install the operating system and programs.

This backup copy was previously held on a CD, but the mechanisms in the drives could not always cope with the vibration they were exposed to. As a result, the company introduced the idea of restoring programs from a USB stick, which was a much more robust solution. “It is a pleasure to work with suppliers who suggest ideas that provide value and inspiration,” concluded Palm, Lehnemann and Engel.

Beijer Electronics’ EPC series is currently certified by class societies ABS, Bureau Veritas, DNV, Germanischer Lloyd, Lloyd’s Register and the Russian Maritime Register of Shipping.

TO

TANKEROperator August/September 2012

TECHNICAL FOCUS - PUMPS

Pump upgrade reduces total cost of ownership Despite the best intentions of shoreside superintendents under constant pressure to reduce operational expenses and equipment downtime, the best pump systems are at risk due to a lack of diagnostic information and sophisticated control systems. he shortage of experienced crew and out-dated attitudes to pump operation undermine manager’s attempts further and the result is needlessly high operation and maintenance costs, increased downtime and frustration for all involved.

Energy costs account for 85% of the total cost of ownership for ballast and cooling pumps, demonstrating the importance of assessing total cost of ownership rather than basing purchasing decisions purely on initial cost.

The concept is just as relevantly applied to upgrade decisions, said Christian Martin, director, product management commercial marine at Colfax. This means keeping abreast of technology and, as is often the case with pumps, recognising when old practices must make way for the new to achieve greater operational efficiency and profitability.

“We have the technology to reduce the energy consumed in pumping operations by up to 50% simply by enabling variable speed operation,” said Martin. “Add intelligent diagnostics and reliability goes up and maintenance costs go down – dramatically.”

Colfax has unveiled ALLMIND, a concept

T

“

developed from a single leakage control device to become an intelligent condition monitoring and variable speed control unit.

ALLMIND will protect a pump, maximises efficiency, lower energy usage and lower maintenance and spare parts costs, Colfax said.

“Our primary goal”, said Martin, “is to provide clients with a competitive edge by offering cost-effective equipment. We keep abreast of technological developments and continually optimise and adjust the performance of our systems to maximise energy efficiency.”

Pump protection Pushed by the growing technical complexity of new ships and cutting short the number of experienced and educated crew, the importance of the total cost of ownership concept grows considerably.

The ALLMIND condition monitoring module has the ability to maximise system availability by providing component-specific information. This measurement of the health of a pump by routine monitoring and analysis of data helps avoid unplanned downtime.

It detects early phases of damage to

mechanical seals through continuous leakage monitoring and its vibration analysis module monitors mechanical oscillations and continuously compares them to threshold values, thus detecting imbalance and thwarting any operational damage, Colfax claimed.

The vibration analysis module also monitors bearing condition. ALLMIND analyses oscillation changes and signals bearing wear at a very early stage. Further, it is capable of detecting unusual levels of motor load.

“ALLMIND is a modular system using the right number of sensors to monitor the critical characteristics of each specific pump. If a ship’s system or processes change, you can easily modify, or expand the ALLMIND modules as needed. This modular approach is also ideal for retrofitting of existing systems,” said Martin.

Maximise efficiency Traditionally, fixed speed operation using throttle valves has been the norm for pump operation for most ships. As process demands change, the control valves are used to regulate process parameters. However, this practice changes the frictional losses in the system and

We have the technology to reduce the energy consumed in pumping operations by up to 50% simply by enabling variable speed operation.

”

- Christian Martin, director, product management commercial marine, Colfax

August/September 2012

TANKEROperator

61

TECHNICAL FOCUS - PUMPS as a result changes the system performance curve. Rather than the pump being controlled to adapt to changing conditions, the system is being adjusted to achieve the required process demand.

This type of process control can often lead to pumps being operated at flows outside of the operational limits (part load or overload) resulting in poor asset reliability, unsafe operating conditions and higher energy and

maintenance costs, due to unnecessary high hydraulic loads and high impact to bearings.

Another adjustment possibility is operating with bypass control. In this way, the pumps will operate continuously with constant speed

ALLMIND benefits Extends mean time between failures ALLMIND is essential equipment to lengthen MTBF. Condition monitoring detects and identifies pump defects and mechanical seal damage at a very early stage. This is a major cost savings advantage.

Enhances product safety Monitoring machinery on a regular basis reduces the chance of dangerous malfunctions that could endanger employees and the environment. Alarm levels can be set to suit individual pumps.

Minimises downtime Through effective condition monitoring, ALLMIND virtually eliminates pump downtime from unexpected component failure.

Avoids disaster A ball bearing is a cheap component, quick and easy to replace and usually stocked on board. But if ware, or damage goes undetected, it could potentially cost a shipmanager thousands of dollars.

Reduces operational costs The elimination of unexpected downtime, reduction of repair costs and increased service intervals together with reduced and minimised energy consumption all lead to reduced life cycle costs. With ALLMIND, pumps can be run efficiently at decreased loads and speeds to reduce operating cost.

For example, a worn out ball bearing can cause impeller and volute casing damage and a cracked pump shaft.

If a particular pump is classified as part of the ship’s “essential service” machinery, the vessel may not leave port until the pump is fully operational and downtime at a port - depending on vessel type and situation - can cost between $50,000 – $100,000 per day.

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TECHNICAL FOCUS - PUMPS and deliver constant flow. Any overcapacity will be bypassed and thus unused, resulting in a considerable waste of energy.

It features variable speed drive control to enable the speed of the pump to be adjusted to match actual demand on a continuous basis.

Its integrated PID controller and intelligent algorithms control the speed of a pump according to target parameters, such as volume, pressure, or net positive suction head (NPSH) ratio with a simple frequency converter.

ALLMIND’s adjustable-speed drive module allows operators to fine-tune processes while reducing costs for energy and equipment maintenance.

“Regulating the flow rate over a wide range without harming the pump, ALLMIND’s variable speed drive application lowers total energy consumption, improves reliability and decreases maintenance costs. Reduced pump speeds also lower overall system vibration and can reduce noise levels,” said Martin.

Lower energy use Most ship machinery is designed at speeds and levels to comply with worst-case scenarios.

August/September 2012

This results in larger dimensioned systems and increased energy consumption of which in most cases, is unnecessary.

For example, a ship’s cooling system – when operating in the Caribbean, must perform sufficiently to meet the maximum cooling demand of high fresh water temperatures caused by multiple pieces of machinery operating concurrently. Full speed operation of pumps and coolers are necessary at this time. But this situation - depending on ship location – seldom, if ever, occurs.

“The majority of a pump’s lifetime and vessel requirements are much lower than the system design point. Reducing pump motor speed grants major cost saving advantages,” said Martin, citing the example that a 20% speed reduction in an electrically driven centrifugal pump cuts energy consumption by half.

“Savings of up to 50% and more can be easily realised with ALLMIND. The payback period for the installed equipment can be even less than one year,” he claimed.

Lower maintenance Total cost of ownership is the best, most

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accurate way to match a performance class to an application. In heavily loaded pump applications - where heat, wear and fluids contribute to pump fatigue, premature bearing and seal failure - costly maintenance and expensive downtime is a major threat.

At the heart of global sea transportation, shipping counts on reliable and efficient pumping systems. Colfax said that it understood the importance of safety and reliability in shipping and has developed ALLMIND as a high quality solution to minimise marine pump disruptions and maximise the safety of this process. Further, it enables shipmanagers to plan service in advance and achieve significantly longer maintenance intervals.

“We have evaluated all costs, direct and indirect, incurred throughout the life-cycle of pump assets including acquisition and procurement, operations and maintenance and end-of-life management. ALLMIND is a major total cost of ownership enabler: it provides critical component information and early warning of system failure,” Martin TO concluded.

63

TECHNOLOGY - TANK SERVICING

IMO guidance on corrosion protection and benign crude oils The new SOLAS Regulation II-1/311 adopted by Resolution MSC.291(87) requires that all cargo oil tanks of crude oil tankers shall be coated during construction, or protected by alternative means of corrosion protection or corrosion resistant material.

However, following proposals raised by other organisations, it was agreed that an administration may exempt a crude oil tanker from the requirement if the ship is built to be

engaged solely in the carriage of cargoes and cargo handling operations not causing corrosion.

Intertanko pointed out that IMO guidelines have subsequently been issued in MSC.1/Circ.1421. Criteria to be used when considering such ‘benign crude oils’ have requirements related to H2S, temperature, water content, salt content and acid number.

When all conditions have been satisfied and the exemption procedure followed, an administration may issue an exemption certificate in addition to the Cargo Ship Safety

Construction Certificate, or Cargo Ship Safety Certificate.

Should a vessel switch from one benign crude trade to another, a new approval for exemption must be obtained.

Compliance warning Of particular note is that in the event that a vessel ceases trading with benign crude only, the cargo tanks will need to be brought into compliance with SOLAS regulation II-1/3-11 before being allowed to trade with non-benign crude oils, Intertanko warned.

Bilge level switches – never compromise on safety Bilge level switches are a safety critical component for the detection of liquid in dead spaces and voids that are rarely visited, or inspected by the crew.

They need to be able to withstand years of installation in difficult environmental conditions, yet operate immediately and reliably should a rising liquid level indicate a leakage or flooding hazard.

When considering products such as these, it would be easy for a shipbuilder, or owner to try and make economies by using cheaper devices, often constructed with poor quality materials and construction.

One company that has always argued that this approach both comprises safety, and is a false economy, as maintenance and

replacement costs will always exceed those of installing ‘the right device first time’, is PSM. The company said that the PSM BLS 9200 bilge level switch is designed, manufactured and approved to meet and exceed the requirements for severe service applications on all classes of vessels.

Key benefits that the BLS 9200 is claimed to offer are: Rugged all-stainless steel design with EPR cable resistant to seawater, fuel oil and hydraulic fluid ensures reliable operation over years of service.

Compact in size with a mechanical mounting using a two-bolt mounting bracket means that installation and commissioning is simple and fast.

Self-draining cage design prevents fouling

of the float and interference with operation from obstructions or floating debris in the bilge, as well as protection from falseswitching.

Integral switch test lever allows full testing of the float movement and switch functionality ensures routine safety tests can be carried out for peace-of-mind.

Normally-open or normally-closed operation and user-selectable cable lengths ensures the BLS 9200 can be quickly delivered against each customers exact requirement.

Many major shipbuilders also agree with the PSM ‘safety first’ message and now specify the BLS 9200 as standard fitment for all their newbuild and refurbishment projects, the company said.

KARCO adds enclosed space entry video KARCO, the 3D animation specialist for marine safety videos, has released ‘Enclosed Space Entry- And One More Tragic Casualty’.

The company said that this video digitally depicts a real time marine accident, which resulted in the loss of a seafarer to the dangers of enclosed space entry. The video uses the popular ‘James Reasons Cheese Model’ for investigation and is focused on human behaviour based responses to look at the corrective actions.

KARCO said that it had shifted the current format’s focus from system friendly to content 64

intensive and, as a result, the videos are appreciated by the shipboard junior crew who form the major barrier against any accident occurring.

Not underestimating the importance of assessment based modules, KARCO will soon release a CBT-based assessment model. This will carry a risk quotient, thus adding a dimension to analysing the CBT test results of the assessment. This will supplement the current method of training by DVD, which can be used effectively for collective viewing and group discussions.

KARCO offers videos with Chinese, Turkish & Russian subtitles. More languages

are being planned in the near future. The current library of 18 titles is constantly being expanded with more videos planned, the company said.

Various services have been offered to the tanker sector down the years, including: Oil/chemical tanker operational consultancy.

Tank cleaning superintending for chemical tankers.

Pre-vetting & audits for tankers, including chemical tankers.

Specialised services - chemical cargo salvage.

TANKEROperator August/September 2012

Download videos and presentations from our April 3rd 2012 Athens Conference

“Making money in a tough market” at http://www.tankeroperator.com/toathapr2012.shtml

Speakers: Martin Shaw, managing director, Marine Operations and Assurance Management Solutions Ltd, ex-VP technical, fleet manager and vetting service manager, BP Shipping Dimitris Lyras, director, Lyras Shipping and founder, Ulysses Systems (chair) Emmanuel Vordonis, ex executive director, Thenamaris Ships Management Mads Friis Sørensen, branch manager, FURUNO European Branch Office Takis Koutris, managing director, Roxana Shipping and chairman, Marine Technical Managers Association (MARTECMA) Captain Andreas Xapolytos, CEO, Tsakos Columbia Shipmanagement George Vassiliades, commercial manager, Tsakos Columbia Shipmanagement

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