Pirates and unsafe operational procedures continue to undermine the safety of crew working onboard bulkers, according to Captain Kuba Szymanski, Intermanager Secretary General.
He said there was no political will to solve the piracy issue and the shipping industry had been forced to take on the challenge of its own accord at huge expense in terms of prevention and insurance. “It’s also huge work for the crew to make the vessel ready for ten days in a war zone,” he added. “This means that about two weeks every month or so are spent on a vessel that is effectively a warship. And that means two weeks of non-regular operations with maintenance postponements etc.”
He said that not only had piracy in the Indian Ocean not been reduced, but the success of pirates there was now encouraging others. “That’s definitely the case in West Africa, where action by Nigeria has just displaced the hijack problem to
Benin,” he added. “Asia is slightly different but people are not stupid — if it works elsewhere, people adopt best practice.
“Somalia gets all the headlines, but problems in the Malacca Strait never disappeared, and the same is true of the South China Sea and now we have West Africa. The situation is not good.”
Captain Szymanski said the upsurge in lives lost at sea on bulk carriers was not linked to pressure on shipping rates, arguing instead that this was more likely to increase safety. “Cost cutting doesn’t mean less safety because as soon as commercial pressure relaxed, vessels became safer,” he said. “The prime pressure point is commercial pressure, the pressure to get there quickly with no stops for maintenance. With slow steaming, you can drop anchor and do the maintenance so in general we’re shipping is much safer.”
Instead, he said, the problems linked to bulk carriers were specific to certain cargoes or poor procedures. “There have been many incidents to do with cargo liquefaction or nickel ore and iron ore fines,” he said. “We also see forklifts in holds they are not designed to be in. There is no IMO Code and it can cause punctures in ballast tanks and the forks can be too heavy.”
He also said there were other issues such as the loading of steel coils, hold ventilation and grain stability calculations which were cause for concern and needed to be analysed more fully.
He also admitted that Intermanager’s pioneering work on Key Performance Indicators in shipping has not, so far, put bulk carrier management systems in a good light so far. “It’s too early to show the results, but unfortunately we have to say that if you compare bulkers to tankers then they are two worlds apart,” explained Captain Szymanski. “Tankers are used to vetting, self- assessment, they are used to all sorts of safety regimes etc. Because of that tanker operators are used to KPIs and use them for best practice. Lots of bulk operators don’t measure performance, they think they are safe, but in fact they don’t know what safety is. Their performance shows they are three to
five times less safe than tankers.” “The safety culture onboard is totally different. On tankers
there are lots of risk assessments established, but in the bulk fleet this is not common. There are very good operators, give them their due, but generally speaking bulk carriers are not using the same safety standards you see on tankers. It’s a casual approach to safety.”
Safety in the tanker industry, he said, had been driven by the oil majors and a similar trend could also emerge in the bulk carrier sector driven by commodities majors. “We would welcome this,” he added. “If the commercial guys don’t know or care about safety then competitors will drive things to the lowest standard. But if they see the commercial guys taking interest, then that can make a difference.
“Rightship is doing good things on vetting, but the International Safety Management (ISM) Code is being interpreted differently by bulker operators than tanker operators.”
The ‘A’ rated, 170 million GT North P&I club is playing a major role in continuing international efforts to prevent further loss of life caused by nickel ore cargoes that liquefy at sea. The latest developments in the campaign are reported in the club’s loss- prevention newsletter Signals.
Most recently, North’s loss-prevention manager Andrew Glen attended the editorial and technical group of the International Maritime Organization’s subcommittee on dangerous goods, solid cargoes and containers (IMO DSC) meeting on 19–23 March as a representative of the International Group of P&I Clubs. A number of proposals to improve the safe transport of solid bulk cargoes were discussed which will lead to amendments to the International Maritime Solid Bulk Cargoes (IMSBC) Code.
French representatives submitted a proposed new code schedule for nickel ore based on research in the French territory of New Caledonia in the Pacific, which has a quarter of the world’s nickel ore deposits. According to Glen,“The schedule references a new test developed by the French government to assess the suitability of New Caledonia nickel ore for carriage by sea. It is a revised version of the penetration table test described in the IMSBC Code.” If adopted at the IMO DSC meeting in September 2012, the new schedule will be mandatory from 1 January 2015.
Glen was also recently part of a delegation to Indonesia from the International Group and Intercargo to discuss the
shipping industry’s concerns. Five ships carrying Indonesian nickel ore have been lost in the past 18 months along with the lives of 66 seafarers. “The purpose of the visit was to establish a dialogue with local authorities, which in turn will lead to a range of measures to address recent casualties and reduce the likelihood of further accidents associated with nickel
ore liquefaction in this region,’ says Glen. North is also working with the International Group,
Intercargo, the International Chamber of Shipping and the International Union of Marine Insurance to introduce additional safety measures designed to reduce the likelihood of further casualties in nickel ore trade. “This includes engaging with administrations to identify aspects of compliance that could be improved, and locating suitable resources to enhance oversight by the competent authority and adoption of IMSBC Code requirements,” says Glen.
North is a leading marine mutual liability insurer providing P&I, FD&D, war risks and ancillary insurance to 125 million GT of owned tonnage and 45 million GT of chartered tonnage, with 4,000 ships entered by 400 members. It is based in Newcastle upon Tyne, UK with regional offices in Hong Kong, Piraeus, Singapore and Tokyo. It is a leading member of the International Group, with over 13% of the group’s owned tonnage. The 13 group clubs provide liability cover for approximately 90% of the world’s ocean-going tonnage and, as a member of the group, North protects and promotes the interests of the international shipping industry.
Third-party ship managers face growing number of claims
Owners facing difficult financial times are increasingly making claims against third-party ship managers, according to the International Transport Intermediaries Club (ITIC).
In its latest Claims Review, ITIC warned that cash-strapped owners were cutting back on maintenance regimes and also refusing to pay managers that had disbursed fees on their behalf.
“When ship managers try to collect the funds due, they are
faced with a claim for negligence in the management of the ship,” said the Club. “In ITIC’s experience, once shipowners fail to put managers in funds the situation rarely improves, and usually deteriorates. The resulting claims are time-consuming and costly to defend.” The Club warned managers maintain clear records of correspondence with owners to avoid damaging and lengthy legal claims by dishonest owners.
Industry faces ‘people challenge’ says BSM
Attracting the right calibre of person to work in shipping is the key challenge now facing third party managers, but commodities majors are helping push up operational standards within the bulk carrier fleet, according to Bernhard Schulte Shipmanagement (BSM).
BSM was created in 2008 by combining four ship management organizations already owned by the Schulte Group — Hanseatic Shipping, Dorchester Atlantic Marine, Eurasia Group and VBS. The integrated maritime services company boasts service and crew delivery centres in 25 countries and some 17,000 employees.
David Furnival, chief operating officer at BSM, said the biggest challenge facing anyone operating ships in the current environment was finding people with the relevant skills, both to work at sea and ashore.
“The average calibre of person at sea is lower than 10 or 20 years ago,” he explained. “It’s not such an attractive working environment as it was in the past. Keeping them motivated onboard is a challenge and that’s because the shipping industry is in a difficult environment. It’s not just the economic situation, it’s piracy, restrictions on shore leave etc. They have a negative impact on the working environment so it’s not such an enjoyable place to work. Keeping people motivated and ensuring they have the right attitude is the big challenge.”
He said BSM was fortunately working with quality bulk carrier owners not interested in exerting downward pressure on costs at the expense of safety, a trend that has been reported elsewhere with the bulk carrier sector. “We don’t face those scenarios where we’re asked to cut corners or compromise safety,” he said. “If can delay or extend routine maintenance and achieve cost reductions by simply optimizing our planning to utilize idle time then we do so. We also have good agreements with suppliers, so we get the best lube oil rates, which helps cut costs. We don’t compromise safety through lack of funds. We have owners who are aligned with us on this issue.”
BSM currently boasts a dry fleet of some 314 ships of which 133 are under full technical management our of a total fleet of all types of around 650 vessels. The bulker fleet consists of over 70 ships under technical and crew management including nine 250,000+ dwt Very Large Ore Carriers, some of them owned by Brazilian mining giant Vale.
“MOL and Matco are also clients and we also have our own ships,” said Furnival. “Most of the undesirable ships have gone now so the fleet is mainly higher end because we’re after a quality fleet.”
He said commodities majors were taking more of an interest in how their cargoes were moved, or in how their own ships were managed. “Vale want the highest standards and modern techniques,” he said. “They expect us to cope with that level of management. They are progressing the bulk market industry. MOL is another owner that has impeccable safety expectations. They expect us to match their in-house teams.
Low rates a challenge to managers
Rising costs in a low a rates environment are putting growing pressure on ship managers with a sizeable presence in the bulk carrier sector, claims V.Ships.
“The low freight market is putting a lot of pressure on bulk carrier owners to minimize their operating costs, with a significant chunk of these due to crewing expenses, such as wages,” said V.Ships’ crew director Andy Cook
“One of the reasons freight rates are low is because an increase in vessels is coupled with a drop in cargoes, but these vessels still have to be crewed. Therefore, there is an upward pressure on crew salaries at a time when owners cannot afford increases.”
V.Ships currently provides full technical or crew management services to approximately 140 bulk carriers. These range in size from mini-bulkers employed on coastal trades through to Capesize largest vessels of 250,000dwt. The fleet covers both geared and gearless vessels.
“We manage a large fleet of Handy bulkers — including loggers — and Panamax bulkers and have particular expertise in the management of self-unloaders, in fact our largest client is CSL,” said a spokesman.
Cook said V.Ships was now increasing its efforts to assist
owners with managing crew costs using the company’s size and presence in the global crew market, including its network of in-house manning offices, as leverage.
“Our offices allow us to manage a dedicated pool of seafarers,” he explained. “There are upward pressures on wages, but they can be managed through working closely with our seafarers. By doing this, we aim to make V.Ships a preferred place to work, where people can develop their careers and make the most of a multitude of long-term career opportunities.
“We also continually monitor the labour market, and if there are perceived benefits in opening new manning operations in different countries, then we will give each project serious consideration.”
However, he added, the spectre of piracy was putting many potential recruits off a life at sea.
“Piracy is having an effect on the entire shipping industry and makes seafarer recruitment a greater challenge, particularly in the Indian sub-continent and South East Asia.
“We have a policy that all vessels must adopt the preventative measures contained in the industry adopted ‘Best Management Practice’ (BNP4), but we also spend a considerable amount of time assessing the risk for each vessel, as well as utilizing armed uards on those vessels exposed to a high risk of boarding.” Lead times for taking over management of a bulker are
between two and three weeks. From a crewing perspective, Cooke said this meant only a short period of time was usually available within which to source crew ensure that have undergone the required in-house training so they are not only familiar with the requirements of V.Ships, but also understand the latest industry-wide challenges.
“However, the main focus of the training programme is to create cohesive deck and engine teams on-board the vessels, which is achieved through our advanced Crew Resource Management courses,” he added.
Thome sets up a devoted bulk ship management division
Thome Ship Management plans to bring tanker operating standards to the bulk sector after dividing its dry and wet business in February.
The strategic rethink came when Carsten Brix Ostenfeldt was appointed as managing director last October, after previously working for two years as the company’s technical director. He decided the way forward would see emphasis placed on the dry sector and embarked on an internal restructuring of the Singapore-based group.
As part of this process, in February Thome appointed Steffen Tunge as director and new chief operating officer of its Tanker Fleet, and promoted senior manager Yatin Gangla to chief operating officer of Thome Bulk Division.
“We’re now fine-tuning the changes,” said Ostenfeldt. “We made the split between wet and dry so we can put sufficient resources into running bulk carriers which is not the walk in the park some believe it to be.
“Tanker guys used to think if you can manage a tanker then bulkers were easy, but in small ports you need to know your cargoes, and even if you’re loading the biggest ships, you need to ensure the planning is done properly. There
is a lots of specialization even within the bulk carrier fleet.”
Thome current has 155 ships under technical management including 50 bulk carriers covering every size range up to but not including Very Large Ore Carriers (VLOC). The vast majority of the vessels are owned by European and Asian clients.
Ostenfeldt said Thome was gradually shaking off its reputation as primarily a tanker operator, and this had helped it increase the number of its bulk carriers from a handful back in 2008/09 to the current half century. Ask if he expected to attract more bulk carriers, Ostenfeldt was adamant: “I think so, yes. The world is uncertain, but unless
the world flips then we will. I would like to we’ll grow to around 100 bulk carriers in the future, but how many years it will take I’m not sure. If we deliver good performance then we will get ships by making it a natural choice for owners.”
Key to this will be infusing the same standards Thome is known for in the tanker sector into Thome Bulk Division. “Shippers like Vale and Rio Tinto whose cargoes we handle sometimes are looking for higher standards and they don’t want delays,” said Ostenfeldt. “We also have vigorous Port State Control and other regulatory bodies overseeing bulk operations, so ships can’t stay
below the radar.” Thome plans to differentiate its
services for bulk carrier owners by demonstrating its ability to develop specific management programmes tailored to each bulker. This is what Ostenfeldt calls applying “a tanker specific way of working” to bulkers and it is a strategy that takes in individually designed maintenance programmes covering health, safety, security and environment quality.
“We’re bringing our tanker standards and procedures to bulk carrier management,” he added. “We have experienced people who have sailed on bulk carriers and know their way around these ships, and this will be overlaid by our internal systems across dry and wet divisions.”