DRAMATIC INCREASES IN MERCHANT SHIP TOTAL AND PARTIAL LOSSES

DRAMATIC INCREASES IN MERCHANT SHIP TOTAL AND PARTIAL LOSSES

There has been a dramatic increase in the number of ship total and partial losses, and the upward trend looks likely to continue.

New statistics released today by the International Union of Marine Insurance (IUMI), which represents marine underwriters worldwide, indicate that the total figure for the 2006 year has jumped from an early estimate of 67 to 92 (all figures relate to ships of 500 gross tons and over), an increase of 37%.

Reported so far for 2007 are 82 total losses (compared to 67 for 2006 at the same point). If reports increase at the same level as 2006, says IUMI, by March 2009 the total will be 112. The downward trend of total losses over recent years, therefore, will be sharply arrested.

There has been an equally dramatic increase in major serious or partial losses. IUMI states: “727 serious incidents have been reported for 2006, a 6% increase since the last report, and a staggering 914 so far for 2007. This is a 270% increase in one decade, 1998-2008.”

The statistics, relating to the marine and offshore energy markets, collated and analysed by IUMI’s facts and figures, ocean hull and offshore energy committees, are based on information from a number of authoritative sources, including Lloyd’s Marine Intelligence Unit, Clarkson, Rigzone, Willis, and the International Association of Drilling Contractors.

Other highlights are:

The increase in tonnage lost in 2006 since the March 2007 report is 40% (508,141 gross tons has risen to 715,032 gt). Tonnage lost in 2007 is slightly down on 2006 at the same point – 481,741 gt.

The increase in total losses is also noticeable as a percentage of the world fleet where the percentage of tonnage lost has almost doubled from 2005 (0.06%) to 2006 (0.11%), with 2007 at this stage being 0.08%.

Weather remains the major cause of total losses but collisions have overtaken groundings as the next most common proximate cause. Of the weather losses, a total of 14 general cargo vessels over 25 years old were total losses in 2007.

The 270% increase in major serious losses over the 10-year period is equivalent to 0.64% of the fleet suffering a serious partial loss in 1998 to 1.73% in 2007. Machinery damage continues to be the major cause of serious partial losses, with a frequency of approximately 35% in the past five years.

In the offshore energy market, there is a long-term trend towards greater severity of the average loss since the early 1990s. However, the average loss frequency for 2005, 2006 and 2007 does not appear significantly higher than that seen in the early 1990s.

Analyzing the offshore losses, excluding the spate of hurricanes in 2004/5, there is a moderate trend for an increase in loss attributable to mechanical failure and design/workmanship.

Commenting on the statistics, Deirdre Littlefield, the New York-based president of IUMI, said: “These figures underline the relentless surge in marine claims that has come about due to a number of factors, not least being the shipping boom itself with ships and crews being driven harder than anyone can remember. Further, the figures dramatically demonstrate the volatility of marine risks.

“Regrettably,” she added, “this dangerous spiking of the casualty graph is happening when the worldwide premium base for marine insurers is flat and competition is rife. Underwriters are struggling to obtain realistic increases in their pricing of risks. But they can and must help themselves by showing discipline and practising responsible underwriting.

“Risk calculation, not risk taking, must be the underwriter’s primary concern.”

A new feature of this year’s statistics and analysis concerns cargo insurance. IUMI says that 2007 was another exceptional year of development in world trade. In just five years, the volume of goods moved by sea has risen by 50% and values by more than 110%.

The demand from emerging markets is still high, and also contributes to the massive increase in prices of raw materials: iron ore and scrap metals up by 200% since 2000, crude oil by 137%, coal by 130%, agricultural products by 55%.

“This creates a very positive environment for cargo insurers,” states IUMI. It adds that although undoubtedly there are uncertainties in the future, there has been no sign of a slowdown in trading activities.

In its shipping analysis, IUMI notes the continuing growth of the world tanker fleet, with 412 vessels delivered in 2007 and only 75 scrapped. However, a net growth of 337 compares with the much stronger net growth of 411 tankers in 2006.

A significant increase in the bulk carrier fleet is evident, with a net growth of 312 vessels (261 in 2006).

Also, “extraordinary growth in the container sector continued in 2007, with a net increase of 350 vessels (344 in 2006), and an increase of 2.623m. TEU capacity. Overall, the container fleet has reached 10.742m. TEU.

In shipbuilding, more than 80% of contracted gross tonnage is with South Korea, China and Japan.

Scrapping of the tanker and bulker fleets remains very low, about 0.5% of the world fleet in both sectors. Unsurprisingly, only 13 bulkers were scrapped in 2007, compared to an average of 125 per annum between 1998 and 2006. Scrap prices have reached a new high of $500 per lightweight ton.

Freight rates in the bulker market reached an all-time peak of over $40,000 a day – against $7,500 in 2002. However, tanker earnings dropped sharply in 2007, being approximately $30,000 per day, compared to nearly $40,000 in 2006; but this remains strong compared to the $20,000 in 2002. In 2007, secondhand tonnage prices in the bulker sector reached a new peak of $1,200 per dwt, comfortably exceeding the historical high for new buildings at $900 per dwt.

In its analysis of mobile offshore drilling unit statistics, IUMI says there has again been significant growth in the size of the world fleet, currently standing at 937 units. But the 49% increase since 1999 has not been reflected in the Gulf of Mexico where the fleet size has been largely static.

The surge in construction activity continues, it being estimated that 142 units are due for delivery between this year and 2010. By that year, comments IUMI, the contracted fleet will be 889 units, a 98% increase since 1999.

All the statistics and accompanying graphics can be found on the title page of IUMI’s website, www.iumi.com -ENDS-

NOTE

IUMI currently has 54 national associations as members, protecting and advancing their interests. It also provides an essential annual forum to discuss and exchange ideas, information and statistics of common interest. IUMI’s roots date back to 1874.

ISSUED BY: Denzil Stuart Associates, 67 George Row, London, SE16 4UH

Tel. +44 (0)20 7231 9963 / Fax +44 (0)20 7232 1738 / Email: ds@dsa-pr.com

Robins Note

Since 1 January 2008 there have been some 352 casualties worldwide of which some 88 were caused by heavy weather. The loss of life to date totals some 112 seafarers and passengers.

MARITIME NOTES

Jeff Charlton of 911team.org in London asked a interesting maritime question on the IAEM list-serve the other day that I thought needed to be answered.

Jeff's question?

"What if the need arises to replace a master or pilot because the ship has been affected by plague, terrorism, CBRn incident? How many have the competence or training to work in level A or B PPE (personal protection equipment)?

How many crew could assist him if a vessel was out of control? What if a ship was utilised as a terrorist vector agent and required mobility rather than destruction?"

So thanks to my shipmate at gCaptain here is the response by John Denham a former SF Bay Pilot.

First, who will be in charge. The COSCO BUSAN incident is a current example of the lack of a single responsible agent with authority to mobilize, coordinate, and direct a catastrophic event recovery operation in the San Francisco Bay area. The closest single authority to my knowledge is the Bay Area Conservation and Development Commission (BCDC) Yours truly a member of the Scientific and Technical Advisory Committee. As a state ( next level of responsible government) agency , BCDC has the civic and political sub-structure ( members from all contiguous communities) to organize, coordinate and direct what ever exists to respond, but lacks any experience. 9/11 experienced a similar problem to a lesser degree as only New York city was involved. Leadership is the critical survival element.

Second: Consider a nuclear weapons attack with CB fallout-out directed on the city of San Francisco. Without details consider San Francisco and the immediate 15 mile area is devastated. In such a scenario the leadership would probably come from out of the area. Sacramento would probably respond, and in so doing would call for federal assistance; that politically implies we can handle it but need help The federal government will probably respond with support, i.e. we will take charge and fix things as we see fit. And that may be worse than the bomb.

I have an ID card identifying me as a Department of Defense employee and shipyard pilot at the Mare Island Naval Ship Yard. I have no idea what program that was and I have no idea what I was to do; I left that job in 1981. But under the Civilian Defense organization, at one time there was a plan for identifying and organizing critical persons.

Some one (authority), will eventually make a decision that vessels must be moved, for some reason. Some to depart, some to arrive. Some just to be moved from A to B. The bay waters to my knowledge will be basically unaffected by the destruction and bad effects of man's attempt to resolve a problem with explosives. Therefore it is considered safe to move about on the water if there are no navigation restrictions e.g., bridges blocking passages .

Case 1: a heavily contaminated vessel must be moved from a pier to anchorage . The availability of a pilot is questionable as only those that live out side the bay area are probably unscathed, but the "authority" has quarantined San Francisco. No one in-out without permission.( A CD ID badge would be nice). Probably some tugs will be serviceable but crews are questionable due to blast damage, radiation and CB fall-out. If tugs are available and the decision is critical, then one tug ,with an experienced tug master and a couple SF Fireman with "bunny suits" can move the dirty ship to anchorage. It may not be a professional " no paint scratched" job but the ship is out and away from the pier. Some hero has to let go the ship's anchors. Any SF Fireman can do that (no USCG papers required) But he has to be properly clothed, unless the time exposure limit is acceptable, and instructed. Anchoring a ship is a technique, no skill required but instructing some one to do it properly is a skill. The average fireman will probably need 10 minutes of instruction to learn to lift the pawl, disengaged the wild cat and release the brake; and when the chain stops running, tighten the brake, drop the pawl and haul ass. Let the current do the rest.

Pilots are mostly needed for ship handling, docking, undocking and directing tugs. For expert, non-accident and timely ETA and ETD maneuvers they excel but if none of the professional criteria is required any one with a basic understanding of ship handling and seamanship can navigate a vessel from A to B. Local knowledge is helpful, but in an emergency one must use what is available. On December 7, 1941 a junior officer got a battleship underway to exit Pearl Harbor. He was not a qualified OOD.

An essential in bay area navigation is an understanding of the tides and currents. Any licensed deck officer should be able to determine the current and tide, many yachtsmen are more proficient than harbor pilots in that. Essentially one cannot expect perfection in emergencies, only results are needed.

Case 2. Terrorism is a case special situation. As I see it, there is no defense or procedure to deter a captured vessel proceeding from sea at full speed and ramming the south tower of the Golden Gate Bridge, or proceeding into San Francisco Bay to hit some thing. Frankly there are no worthwhile targets, except

may be making the evening news. However detonating a weapon of mass destruction is another case, and that has been presented. Piloting and navigation will have little affect.

Case 3. Any ship that is uncontrolled, unmanned and or not boardable. is a situation the USCG must resolve and as far as I know they have no afloat equipment readily available to manage that situation. With local help and time it is possible to disable the propeller; with tugs forcibly change the direction of movement and intentionally ground the vessel.(Alcatraz is handy) .If perchance a team of USCG personnel could be landed on board, say by aircraft ,VTS or a harbor pilot could communicate direction for navigation via radio to safely route the vessel to some alternate solutions e.g., grounding east of Treasure Island.

Case 4. A contaminated vessel or one with severe contagious disease is allegedly covered by government and international regulations requiring status ":pratique" be resolved before entering a port. In that case, the ship would anchor off shore in a quarantine status until the health situation was resolved. No pilot required. There have been cases where the USCG has crewed a vessel and brought it into port with the use of U.S. seaman. If, the culprit did not request entry and order a pilot he would not be boarded by the pilots and therefore be reported to the USCG. However if a renegade vessel attempts to sneak into the harbor, only the pilot boat, if on station, is available to report it to the VTS. However a USCG off shore surveillance radar may detect the rascal and attempt communication. Again the USCG has a flotilla of small cutters in near ready status to respond. A 15 knot ship will be in the bay in 45 minutes.

My experience with weapons, piloting and terrorism leads me to believe that the most probable man made scenario is a shipboard launched threat toward the harbor in Oakland for effect (less people but greater economic affect) or a strike to downtown San Francisco ( more people less affect). Essentially, there are no essential strategic target in the bay area at this time. Natural disasters such as earthquakes, hurricanes, tsunami or political rampage must be viewed as to degree of effect. Earthquakes, tsunami heading the list.

USA. MSC Napoli stern to be removed from Lyme Bay in May

Thursday, 27 March 2008

Work to remove the remaining section of MSC Napoli from Lyme Bay will begin in early May 2008. The remaining part of the stern section of the vessel remains aground in Lyme Bay with a list of 40 degrees to starboard.

Shaped explosives will be used to remove the propeller, the rudder, and to cut the propeller shaft. They will also be used to weaken the structure of the main engine to assist its removal. The aft section will then be systematically removed. The whole operation is expected to take roughly five months. SOSREP (Secretary of State's Representative for Maritime Salvage and Intervention) has made the decision to cut up the remaining section and take it away in small pieces, rather than removing it in larger pieces, following analysis of all options available. The option to cut the remaining section into smaller pieces is preferable since there could be issues with anchoring and cutting through the main engine and propeller shafting if the stern were cut up into larger pieces.

A pollution control plan will be in place throughout the entire operation. Following removal from the site, material will be transhipped to Holland for recycling. On completion a full underwater survey will be carried out to ensure that the seabed has been cleared of all recoverable debris from the MSC Napoli.

Throughout the winter, weather permitting, contractors have been conducting an inspection of the wreck, in daylight, on a fortnightly basis. When on site they have been checking for any change in status of the wreck and any evidence of pollution. They have also been recording photographs showing the status of the wreck. Inspections have been co-ordinated with periodical aerial inspections which have been carried out by MCA surveillance aircraft.

The Napoli's owners also have a response team from DRS, based in Branscombe, who have been monitoring the wreck and the Branscombe area daily. They have been patrolling and clearing any material which may have originated from MSC Napoli from all beaches in the Lyme Bay area.

Despite periods of severe weather over the last few weeks there is still no change in the status of the wreck.

Coast Guard Rescue: 4 Dead, 2 Missing Off Alaska




The Coast Guard says four crew members are dead and one missing after a Seattle-based fishing boat sank off Alaska's Dutch Harbor. The other crew members who abandoned ship were recovered safely. (March 24)

Spring is here ...we think?
Enjoy your weekend!

RS
Flag from the bridge..... Congrad's to John Konrad of gCaptain who is a dad for the second time.....