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Improving the quality of merchant ships.

Recently, there has been a high level of public and media concern over the world's aging shipping fleet. Both ship classification societies and the shipping industry in general have faced increased criticism following highly publicized accidents involving older or substandard vessels.

Ship classification dates back to the 1700s, when the Lloyd's Registry was formed as the first classification society. In the United States, ship classification began with the American Bureau of Shipping (ABS) in 1862. At that time, 10 marine insurance companies, led by the Atlantic Mutual Insurance Co., recognized a need for establishing an organization to determine the structural integrity of sailing ships. Out of this grew the ABS and its ship classification process, which is a technical procedure involving design review and field surveys to determine that a given ship or marine structure is built and maintained to ABS standards. These standards, which are known as "rules," are developed through a committee system comprising eminent individuals from the marine and allied disciplines throughout the world. Classification provides evidence to interested parties that an owner has exercised due diligence to make a particular vessel mechanically and structurally fit for intended service. Today, there are approximately 12,500 vessels of all types totaling some 92,000,000 gross tons under ABS class, representing 93 flags of registry.

However, prevailing market conditions have created an image problem for the industry, because, in the mid-1980s, ship classification became highly competitive, with an increasing number of players entering the scene. With this increase in competition, some owners and shipyards then began looking for classification societies that had lower fees and more lenient inspection standards. This has resulted in more substandard and short-life vessels evading the classification system, which constitutes a significant threat to the shipping industry.

Substandard Vessels

The term substandard tanker has been a familiar one in the shipping industry for at least 10 years. However, given the recent rash of losses associated with bulk carriers (which transport dry bulk such as iron ore and coal), the industry has learned that there are also substandard bulk carriers. And while much has been written about the problem posed by substandard vessels, the industry doesn't seem to be making much progress in dealing with this issue.

Substandard vessels include any poorly maintained ships that have experienced a significant amount of internal corrosion and therefore are structurally weaker than the minimum standard for that size and type of vessel. While age alone does not determine the seaworthiness of a vessel, it is clear that the detrimental effects of corrosion are time-dependent. If the industry could identify all the substandard vessels currently in existence, it is likely that the great majority would be at least 15 years old. This does not mean that all vessels become substandard at age 15, since many owners make great efforts to properly maintain their vessels. Unfortunately, not all owners have done this; in fact, some owners even believe that since older vessels won't be around much longer, the best approach is to get as much out of them as possible while avoiding any significant repairs.

If the marine industry is to find the formula for safe and profitable shipping in the future, it must begin by focusing on these substandard vessels, which are a real threat to marine safety and the marine environment. It is sobering to consider that approximately 56 percent of the existing world tanker tonnage is over 15 years old. Importantly, 75 percent of the very large crude carrier (VLCC) tonnage has surpassed the 15-year mark, as well as approximately 38 percent of existing world bulk carrier tonnage.

Therefore, like it or not, the shipping industry will be forced to cope with older tonnage for many years to come. The real problem for those concerned about the shipping industry and marine safety is how the marine safety system can be adjusted to cope with another decade where potentially substandard vessels will remain in use. The threat of the substandard vessel will not soon go away, nor can the industry wish or legislate it away. Instead, the industry should police itself by greatly increasing its efforts to identify substandard vessels and have them repaired quickly and effectively.

New Classification Standards

Fortunately, a number of marine organizations have already developed an appropriate solution. In response to the recent International Maritime Organization (IMO) proposal mandating enhanced surveys of existing tankers and bulk carriers, The Oil Carriers International Maritime Forum (OCIMF), which represents oil companies, the International Tanker Federation (INTERTANKO), representing tanker owners, and the International Association of Classification Societies (IACS), which represents classification societies, have all backed a set of enhanced survey requirements that should lead, over time, to identification of substandard vessels. The ABS was the first IACS society to implement the enhanced survey for tankers this past January. Implementation for bulk carriers occurred in July of this year.

These enhanced requirements will prompt the phase-out of continuous hull surveys, which are maintenance surveys performed over a period of years. They will be replaced by the more intensive and rigorous five-year special surveys that are conducted when the vessel is drydocked. Each special survey will require a close-up visual inspection of the critical areas of the hull structure. The term "close-up" means that the surveyor will be able to get safely within arm's length of the structure and that the vessel will be sufficiently cleaned of cargo residue so that the inspector can detect fatigue cracks and structural deterioration. The close-up inspection will be augmented by periodic thickness measurements of the hull structure taken by certified gauging companies. Gauging and survey reports will then be required to be retained on board to facilitate follow-up inspections.

However, it is essential that the survey requirements be consistently and diligently implemented by all class societies for tankers and bulk carriers. Also, there must be an ironclad transfer of class agreement between societies on the ability of existing vessels to change class societies in an effort to avoid more stringent survey requirements or outstanding recommendations. Fortunately, the IACS members are approaching consensus on a transfer of class agreement.

These actions alone cannot limit class-shopping, however, since more than 30 other organizations outside of the IACS claim to be "classification societies." In other words, an owner wishing to avoid a rigorous inspection of its vessel could easily find a willing class society -- even one owned by shipowners. Responsible classification societies need the help of other parties such as underwriters, charters and flag and port states to help prevent class-shopping by shipowners intent upon suing their substandard vessels for another year or so. Therefore, the ABS encourages underwriters to use the somewhat controversial Salvage Association condition survey for those vessels over 15 years old that have recently changed class societies. This would reinforce classification societies' efforts to identify the substandard element.

Responsible charterers should also discourage the employment of substandard vessels by looking much harder for alternatives to vessels over 15 years of age that have recently changed class. A charterer exercising due diligence certainly should not disregard the fact that an older vessel may not have been properly inspected. For although the vessel's class may change, it is still the same ship. The short-time economic gains obtained from using substandard vessels may be a drop in the bucket compared to the liabilities that could arise. Actions by port states to target older vessels that have changed class recently, as well as those that are registered by administrators or classed by societies with a history of questionable practices, would also greatly reinforce the effectiveness of the enhanced survey initiative.

Short-Life Vessels

While the threat from substandard vessels has been a problem for many years, the industry needs to recognize a potential new threat -- the short-life vessel. During the 1980s, low freight rates also resulted in low ship values that, in turn, forced shipbuilders to search for ways to reduce their shipbuilding costs.

One major initiative was to shift the entire hull structure from mild steel to high tensile steel (HTS). By taking advantage of the higher yield strength of the new material, the shipbuilder was able to reduce steel weight to about 75 percent of that of a mild steel vessel.

In comparison to mild steel, the extensive use of HTS results in a vessel of equivalent static strength, but with lighter scantlings. From a yield strength perspective, this is not a problem. However, the HTS structure will experience higher stresses from the same loads. With all other factors being equal, including the loading, the HTS detail of thinner material will cycle over a stress range at a much higher stress level than the mild steel alternative.

The problem arises from the fact that after welding, the HTS exhibits the same fatigue strength as mild steel. Therefore, while extensive use of HTS will result in reduced steel weight, it will also result in a significant reduction in the fatigue life of a vessel. The expected result is the early development of fatigue cracking, especially at stress concentration points in the hull structure. This cracking is often accelerated by the presence of corrosion.

Substandard vessels, as referred to earlier, are primarily a problem resulting from the corrosion of mild steel vessels built during the 1970s. However, there have been a number of reported caes of fatigue cracking and hull failures of HTS vessels built in the mid-1980s. Therefore, the worldwide marine community must also be alert to the potential problems of these newer short-life vessels. However, the enhanced surveys, especially when they involve periodic close-up inspection of all critical joints and weldments in vessels built substantially of HTS, should give early warning of fatigue cracking. But in order to be effective, this surveillance needs to be concentrated much earlier in a vessel's life, such as on the first and second special surveys. Since the use of HTS in shipbuilding is now commonplace, all new designs for tankers and bulk carriers should be subjected to a comprehensive fatigue analysis to ensure that the industry doesn't add to this potential problem.

There is one additional threat to marine safety, and that is the human element. Studies have concluded that 70 percent to 85 percent of marine accidents result from human error. ABS is assuming a leadership role in not only the use of technology to add safety to today's fleets, but also by advocating greater manpower training and evaluations aimed at reducing human-related accidents. It also goes without saying that implementing early surveys, policing class society changes to avoid substandard performance evaluations and having an industry-wide effort to upgrade so-called classification societies will also add margins of safety.

Finally, the IACS has, and is currently taking, steps to strengthen its standards and image. First, the IACS has introduced a quality scheme that requires each member to successfully demonstrate by periodic audit its compliance with an internal system of quality based upon the ISO 9000 family of standards. Formal certification of compliance is a condition of membership. The IACS has also introduced an Enhanced Survey Program for Tankers that will take effect this year and that mandates a rigorous system of surveys based on the elimination of sub-standard tonnage.

A formal IACS Secretariat headquartered in London has also been created to ensure the most responsive and efficient operation of the organization. The Secretariat, comprising both administrative and technical positions, maintains a continuous dialogue with flag administrators, industry groups and the media. The IACS has also increased the number of Working Parties to ensure proactive advancement of emerging technical issues to the benefit of both the IACS and IMO, and has called for an increased participation in the deliberations at IMO through significant representation at all relevant committee and subcommittee meetings. And last, but certainly not least, the IACS has adopted a formal code of ethics for member societies, compliance with which is a membership requirement.
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Author:Sommerville, Robert
Publication:Risk Management
Date:Sep 1, 1993
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