Ship management - safety and training must come first

A spokesperson for the International Chamber Shipping said that in many cases where vessel casualties have occurred “there is no information available and it is not at all clear that some Administrations are actually carrying out investigations or indeed making arrangements to do so.”

Figures compiled by Intercargo, representing bulk carrier ship owners, revealed that of 11 bulk casualties involving loss of life and vessel over 2008–2011, Flag States had still not filed casualty data in the IMO’s Global Integrated Shipping Information System (GISIS) for six of the incidents nor submitted investigation reports. Of the five investigation reports that have been submitted, none of the reports were available to download for use as reference material to help prevent future losses.

In accordance with SOLAS regulation I/21, maritime administrations undertake to conduct investigations into any casualty occurring to ships under their flag, and to supply IMO with relevant information concerning the findings of such investigations, especially where serious maritime casualties are concerned.

IMO codes also state that the final maritime safety investigation report should be “completed as quickly as practicable” and be made available to the public and shipping industry by the investigating State.

However, the terms of the various rules leave Flag States with plenty of scope to let the filing of reports slide or remain closed to viewing by the wider public.

The ICS and the International Transport Workers’ Federation said they were hopeful governments would make current regimes tighter at the next meeting of the IMO Maritime Safety Committee next month.

“The lack of investigation and accident reports hinders the development of appropriate measures by IMO to address the cause of serious incidents in which seafarers may have lost their lives.” said ITF Acting General Secretary, Stephen Cotton.

“It also frustrates efforts by ship operators to learn from the reports and to amend or develop new procedures, or implement other measures to prevent or mitigate similar future incidents.” said ICS Secretary General, Peter Hinchliffe.

The IMO has now agreed a draft circular including revised harmonized reporting procedures following a maritime casualty.

The circular invites Investigating States to populate the Global Integrated Shipping Information System (GISIS) Maritime Casualties and Incidents module with basic factual data about the casualty as soon as possible after the occurrence, so that it is registered on GISIS that a casualty event has occurred, and that it is being investigated.

“The circular reminds governments that following a very serious marine casualty, and in other casualties or incidents where data from a marine safety investigation should be supplied to the organization, the marine safety investigating State should submit a marine safety investigation report,” said a spokesperson.

“Where there are important lessons to be learned from other marine casualties or incidents, full investigation reports should also be submitted to the organization.”

The circular is due to be discussed and approved at the next meeting of MSC in June.

Bulk carrier owners and ship managers face important investment decisions as they wrestle with how best to optimize operational efficiency for vessels trading in Emission Control Areas (ECA).

ECAs limit the sulphur content of bunkers used in ships sailing in North America and Northern European ECAs to 1.00% m/m until 2015, when the limit will be lowered to 0.10% m/m.

As Bimco Chief Shipping Analyst Peter Sand points out, this means vessels sailing inside ECAs are required to either use distillate fuel, which is sold at a clear mark-up over normal heavy fuel oil (HFO), or find other ways of being compliant such as investing in an LNG solution or a scrubber which allows ships to burn cheaper HFO fuel.

Assuming that the scrubber is fully compliant with regulations, the question is whether the significant upfront cost of a scrubber will lead to savings in fuel expenses. This is determined by operational patterns, such as how often the vessel will need to sail in ECA waters, and how many years of commercial operations the ship has left when the decision is made, said Sand.

“Only bulk carriers with regular port calls inside of ECAs would opt for a scrubber,” he explained. “In this way, the fixture that goes into an ECA would carry that extra cost element of burning marine gas oil, but it would save some installation money up front.”

The latest analysis into the use of scrubbers by Bimco focuses on medium-range tankers and Sand admits the maths were a little muddier when applied to more flexible bulk carrier markets. But he drew the broad conclusion that older vessels were not usually candidates for a scrubber installation because the investment cost was unlikely to be repaid before the end of the vessel’s commercial life.

“But for many newer vessels, installing a scrubber could help you save money if you plan on trading a significant amount of time in ECAs,” he added. “For a ship with ten years of commercial life left, the vessel should sail in an ECA 33% of the time for a scrubber to break even”.

For owners and managers signing third party deals, the scrubber installation question also presents new factors to take into account.

“The technical manager operates in accordance with the ship owners requirements,” said Sand.“So the manager must be able to take care of the engine if it is slow steaming, able to overhaul the scrubber and maintain it as well as operate the engine on different types of fuel.

Arvind Sharma, Director of Loss Prevention and HR Marine at Bernhard Schulte Shipmanagement, is no fan of paperwork and bureaucracy at sea. But he is confident that third party crew and vessel management service suppliers will continue to flourish in the coming years.

BSM’s current managed fleet is close to 700 ships evenly divided amongst wet and dry ships, with the dry fleet including bulk carriers ranging from ultra large ore carriers to small Handysize bulkers. Sharma says the company mainly meets the needs of “blue-chip and established ship owners” on a global basis.

“BSM’s fleet size has been steadily increasing, but in a planned and prudent manner, throughout the tanker, gas and dry vessel markets,” he said. “We fully expect continued and sustained growth from satisfied customers in the tanker, gas and dry fleets as the world economy recovers and continues to grow, and worldwide consumption of energy and raw material rises.”

Achieving those aims in a low freight rate environment will be tough, he admits. “Markets are cyclical and have always been so. However, in BSM’s book, quality and safety are not options which can be switched on or off depending on the market situation.

“Having said that, BSM’s competitive edge comes from continuously looking at ways to increase effectiveness and minimize costs, whether the market is up or down.”

This approach means focusing on crew training and awareness to minimize damages and losses, negotiating special prices for owners on stores and spares, and consolidating transhipments of supplies to generate economies of scale.

BSM also works with some owners on a performance-based management fee structure, a trend that is growing in popularity among owners. “For years in BSM, we have measured our efforts in key areas against pre-set and pre-agreed targets, with every section of the business having their own KPIs against which they monitor their performance, and which is used annually to determine any performance linked remuneration,” explained Sharma. “A similar system operates for management level Officers on board ships, thereby giving the senior officers on board a clear set of goals against which they can expect recognition and reward.” Regulation and paperwork are a growing burden on officers, however. “It is heartening to note that the IMO has taken note of this and commenced a consultation regarding the added burden coming out of their instruments and regulations,” he said. “If we wish our seafarers to focus on the job of running our vessels safely and professionally, we need to reduce their paper and reporting workload.

“BSM are well on our way to reviewing and simplifying our procedures and cutting down unnecessary or duplicated reporting through development of IT initiatives and tools.”

BSM does not differentiate in terms of training between its tanker and bulk operations, but Sharma said it is well known in the wider industry that the mindset on most tankers is very safety conscious, with a continuous ‘what if’ mentality. “Seafarers on bulk carriers many times are less safety conscious,” he said.

“Just as was done with repeated training and learning for tankers in the mid-1980s, similar focus on safety has to be drummed into and inculcated in to dry ship crews.”

Thome Ship Management continues to expand its fleet and bulk carriers remain a critical part of the mix. This time last year Singapore-based TSM had a sizeable fleet of 155 ships of which almost a third were bulkers. But in just 12 months the figure has swollen to 175 vessels of which 58 are bulk carriers.

“TSM has been on the growth path continuously,” said Hardeep S.Mundae,Marine Manager.“Our fleet size has increased more than 2.5 times in the last 5 years.A major part of our expansion has been in the dry bulk division and we expect to maintain the same momentum in the future as well.”

The bulk carriers TSM manages include Capesize (ice classed and non-ice classed), Kamsarmax, Panamax, Supramax (geared and non-geared) and Handymax (geared and non-geared) vessels. Major clients include owners from Scandinavia, America, Japan, Turkey and China.

“We feel that our clients believe that TSM gives quality without compromising safety, in a cost effective manner,” said Mundae. “As shipowners become more financially inclined, more vessels will be handed to ship management companies. Further, large management companies like TSM also secure greater economies of scale. And the saving and profits for the owners can only be realized with the economies of scale.”

Mundae believes the bulk carrier sector has much to gain from looking at advances in safety procedures made in the tanker sector.

“Operating a tanker vessel is different from operating a dry bulk carrier as the risks are different,” he explained. “However, there is a lot to learn from the tanker industry. Certain elements from tools like tanker management and self-assessment (TMSA), which provides a standard framework to assess a tanker ship operator’s management system, can also be used in the dry industry to gauge the operating standards.”

TSM utilizes technology to improve operational performance, often deviating from conventional systems and processes.

“Some of our bulk carrier vessels are fitted with ‘Engine Doctor’ systems to monitor main engine and auxiliary engine performance,” he said. “We encourage minimum usage of power tools on deck for carrying out chipping, instead we use grit blasters. Hatch coamings water tightness is confirmed by ‘Ultra Sonic’ testing kit. This is one of the core measures to ensure that the cargo does not get wet during the sea passage. To maintain crane wires we have ‘Masto Lubricator’ for greasing.We also have “Ultra Sonic” cleaning units to clean fuel oil filters.”

In the first three months of 2013, four vessels were hijacked, 51 vessels were boarded, seven were fired upon and there were four more reported attempted attacks, according to the latest figures from the International Maritime Bureau’s dedicated Piracy Reporting Centre. Seventy five crew members were taken hostage, 14 kidnapped and one killed.

The pattern of attack has, however, shifted quite considerably compared to previous years. Better security in the Indian Ocean and Gulf of Aden has seen the effectiveness of Somali pirates significantly reduced. In the quarter there were just five incidents involving pirates from Somalia, although five vessels and 60 crew members onboard are still being held and a further 17 crew are captive on land.

Instead, more emphasis has switched to western Africa and trades not generally plied by many bulk carriers. Fifteen incidents were recorded in the Gulf of Guinea including three hijackings in the first quarter with Nigeria accounting for 11 incidents and the use of guns reported in at least nine of the attacks.

Captain Szymanski said piracy attacks, especially off eastern Africa, were falling due to a combination of security at sea and efforts to tackle Somalia’s issues on land. Yet he warned that some Flag States were still refusing to allow vessels to use armed guards.

“Allowing guards should be possible for all Flags in a unified way,” he said. “I believe some states don’t want foreigners with guns in their jurisdiction, some owners are also not prepared to pay for guards, or the charterer is not in agreement. Others won’t pay seafarers danger money if they’re also paying for guards so crew don’t get rewarded for their risk. We need a unified system across the industry covering the use of guards which reduce the likelihood of attacks.”

IMB Director Pottengal Mukundan also warned that the threat of Somalia pirates should not be discounted just yet. “The drop in reported attacks is due to proactive naval actions against suspect Pirate Action Groups, the employment of privately contracted armed security personnel and the preventive measures used by the merchant vessels,” he said. “The attacks will rise to past levels if the naval presence is reduced or vessels relax their vigilance.”

Captain Szymanski also said many commentators had been wrong to assume that third-party managers would lose tonnage during the shipping downturn. “We don’t see that at all,” he told DCI. “Managing in-house is always more expensive and third- party managers are more efficient so there is a definite shift towards third party managers.