Shipping losses

SHIPPING LOSSES: THE GOOD AND THE BAD

A new report has revealed the truth about shipping incidents recently – and while it’s not all bad, there are concerns and different challenges

The 2022 annual Safety and Shipping Review from financial services firm Allianz Global Corporate & Specialty paints an improving picture of shipping casualties, while indicating challenges ensuring provision of an adequately funded marine salvage industry.

The statistics indicate an encouraging trend, particularly considered alongside the scale of the shipping industry, which by its nature operates largely out of sight of the general populace… until something goes wrong.

Decreases in casualty numbers on the back of greatly improved safety standards are good news all round, but it would be in no one’s interest to assume the maritime version of the Fire and Rescue Services can be scaled down accordingly.

Ships always have and always will come to grief, requiring the same professional salvage response as in earlier times for the industry, when the numbers game was very different. Priorities now include the increase in ship size and consequent challenges when they are in trouble; the challenges of ship fires, a particular area of concern with vehicle carriers currently and covering the whole spectrum; and everyone’s awareness of protecting the environment.

The statistics, while indicating positive progress, are a mixed bag linked to the changing global make-up of the industry. Around 200 vessels were lost annually in the early 1990s, a figure that has dropped to around 50 to 75 a year over the past four years: a welcome statistic considering there are an estimated 130,000 ships globally today compared with 80,000 30 years ago. 2021 saw 54 total losses compared with 65 in 2020, annual losses declining by 57% over the past decade reflecting enhanced safety measures including with regulations and improved ship design and technology. Geographically, while declining annually, South China, Indochina, Indonesia and the Philippines are main global loss hotspots, with the Arabian Gulf seeing a significant increase in loss activity and South-East Asia also described as a “major loss location”.

Half of all losses in 2021 involved cargo vessels with foundering the main cause (60%) of total losses across all vessel types and fire/explosion coming in second at 15%, machinery damage/failure third (11%). While total losses declined over the past year casualties or incidents increased, the British Isles saw the highest number of reported incidents (668 out of 3,000). One in three incidents globally involved machinery damage/failure with fire/explosion as the third top cause after collision: in summary, the number of fires increased by almost 10% annually.

Main salvage concerns

“A number of recurring themes have emerged in major incidents in recent years, many of which are a consequence of the increased size of vessels,” says the report. “Values at risk have increased, while the environmental bar has been raised. However, regulation, safety management systems and salvage capabilities do not always appear to have kept pace.”

With 70 reported fires on container ships in the past five years, such incidents are a “priority concern”. The salvage industry has previously highlighted challenges dealing with such casualties which are particularly difficult to control, the ship often being abandoned.

Around 5% of containers shipped include undeclared dangerous goods including chemicals and batteries, Allianz saying: “The more containers on board, the higher the probability that at least one could ignite and cause a fire, and the harder it is to contain and extinguish it.”

Fires and stability issues with vehicle carriers are described as becoming a consistent loss driver, with malfunctions or short circuits in vehicles being one cause of casualties.

“Commercial pressures” are described as another risk factor, with the increase in transportation of electric vehicles also presenting a significant difference in risk profile. Costs in dealing with complex casualties can be high, salvage of the vehicle carrier Golden Ray in the US taking almost two years and costing more than $800 million (€788 million).

Finally, salvors will be anticipating dealing with consequences of larger container ships.

“Large container ships are of particular concern as salvage techniques have yet to be tested on a 20,000+ teu vessel in a major incident,” says Allianz. “In the Suez Canal, the Ever Given highlighted the potential challenges in re-floating a large container ship. The safe discharge of thousands of containers, even in favourable conditions, would take time and is likely to stretch the capabilities and scope of equipment of the salvage industry.”

8 Wreck removal

of Golden Ray took two years and cost more than $800 million (€788 million) (USCG)

8 The schedules of

around 400 ships were disrupted by the Ever Given stranding

Boskalis and its co-shareholders KS Investments Pte Ltd (Keppel) have completed the sale of Keppel Smit Towage Pte Ltd (KST) and Maju Maritime Pte Ltd to Rimorchiatori Mediterranei.

Boskalis announced the sale of the equity stake in its harbour towage operations in Singapore and Malaysia in November 2021 with approval from Singapore’s regulatory agencies following in May 2022.

Genoa-based Rimorchiatori Mediterranei has a fleet of more than 100 vessels in over 20 major ports and now takes over the operations.

Boskalis received €92 million in cash for its stakes in the joint ventures with a pre-tax book gain of approximately €50 million, both of which will be included in 2022 first half year results.

The sale follows Boskalis’s strategic decision in 2019 to divest its harbour towage activities, having sold its stake in Saam Smit Towage and Kotug Smit Towage in 2019.

In December 2021, Boskalis said it had embarked on a “review of its position” in the joint venture Smit Lamnalco, in which it has held a 50% stake since 1964, the remaining shares held by The Rezayat Group, which was also reviewing its position.

Separately, both Boskalis and HAL Holding N.V. have been publishing regular updates on

BOSKALIS COMPLETES KST AND MAJU MARITIME SALE

Credit: Peter Barker

8 Boskalis operates a large fleet of powerful

ocean-going tugs

the latter’s public offer for all issued and outstanding shares of Boskalis. The process naturally follows a strict legal and regulatory path and Boskalis recently announced that pursuant to the offer it will be convening an Extraordinary General Meeting of shareholders in August (2022), where its board of management and supervisory board will discuss the offer, including financial and non-financial aspects.

While Boskalis may have all but withdrawn

Boskalis received €92m in cash for its stakes in the joint ventures with a pre-tax book gain of approximately €50m, both of which will be included in 2022 first half year results

from the increasingly competitive harbour towage market, it is still a major operator of oceangoing tugs in the offshore energy sector. It serves many related markets, including transport, oil and gas installation and decommissioning and offshore windfarm installation – markets that are related and often require towage provision as part of the offerings.

It therefore has an impressive fleet of powerful anchor-handling tugs and vessels operating in the offshore support sector with towing capabilities. Boskalis is also of course parent-company of Smit Salvage, a household name in the marine salvage industry that can call on tugs from Boskalis when available.

SMIT SALVAGE REPORTS BUSY SCHEDULE

Rotterdam-based Smit Salvage, along with its US alliance partner Donjon-Smit Salvage, has reported ongoing operations including responding to the grounding of two large container ships in Germany and the US

MJ previously reported a hectic period for Smit earlier in 2022, including its parent company’s tug Sovereign, along with other contractors, attending the disabled bulk carrier Julietta D off the Dutch coast. Just days later the 180tbp tug was in action again, when the container ship Mumbai Maersk, on passage to Bremerhaven, grounded off the German island of Wangerooge.

In a consortium with local partners Fairplay Towage, Multraship and Boluda Towage, plans were put in place to refloat the vessel, coordinated in a crisis centre established by German authorities. A flotilla of eight oceangoing and local harbour tugs was assembled and after adjustments to its ballast condition, Mumbai Maersk was refloated and continued its voyage to Bremerhaven under tug escort.

Another container ship casualty, this time in the US, involved the 12,118teu Ever Forward, which ran aground after sailing from Port of Baltimore. Once again several contractors were involved in the ensuing salvage operation, including Donjon-Smit Salvage along with tugs from Moran Towing and McAllister Towing and Transportation.

The timing of the vessel’s grounding meant it was not to enjoy the quick resolution the Mumbai Maersk experienced some 6,300km away. After several unsuccessful refloating attempts, General Average was declared on the vessel and the next stage involved dredging around the vessel, followed by the removal of some 500 containers to reduce its draught. Finally, after 35 days aground Ever Forward was freed by a flotilla of tugs and mooring barges and towed to a nearby anchorage for inspection. In the minds of all involved with this incident was that Ever Forward ran aground almost a year after the somewhat larger Ever Given grounded in the Suez Canal – another job for Smit Salvage.

Smit operates on a truly global basis and in Asia it reported providing several towage assistance operations to shipowners on commercial terms. Meanwhile, in the Americas, its Houston office was involved when a yacht ran aground in the Gulf of California. A team was mobilised to the location and with assistance of a local tug, the casualty vessel was refloated safely without any resultant pollution.

8 Ever Forward

was refloated after a prolonged operation in the US

Kotug expands Middle East tug crew training

Netherlands-based Kotug Training & Consultancy has teamed up with two Middle East learning institutions to enhance seafarer training including for tug masters.

The long-term strategic partnership in the form of a memorandum of understanding is between the training and consultancy division of Kotug International, Abu Dhabi Maritime Academy (ADMA) and the Faculty of Maritime Studies (FMS) at King Abdulaziz University (KAU) in Saudi Arabia. It involves close partnerships for knowledge sharing, building and upgrading training facilities in the Kingdom of Saudi Arabia and enhancing training of tug masters, ships’ crews and pilots by certified Kotug trainers.

MJ regularly reports developments with the training of tug crews, something that has

8 Kotug’s training of tug masters will include

simulator sessions

evolved significantly in recent years. As can be seen when MJ spent a day on a Rotterdam tug, increasing tug sophistication and the inexorable increase in vessel size requires specialist skills that are improved with simulator technology, reducing risks and increasing operational efficiencies.

The development fits in with Saudi Arabia’s drive to grow its network of ports and qualified maritime professionals with FMS seeking ways to increase its capabilities while maintaining its “best-in-class training”. Kotug says its MoU with ADMA “assures FMS to remain the number one training facility in the region, and significantly broaden its training portfolio.”

Patrick Everts, Kotug Training & Consultancy general manager, said: “Our training method consists of three components, classroom sessions, simulator training at state-of-the-art simulators, and on board training. It is a proven didactic method for the best training results, preparing the students for expected and unexpected real-life situations.”