Article: Responding to a mega box ship casualty – a salvor’s perspective
11 July 2019
Commercial Director, SMIT Salvage
T +31 10 4549911
This article gives a personal view of the most important considerations for shipowners and salvors when faced with a mega box ship casualty.
Generally speaking new transportation concepts are treated with a fair degree of caution by the majority of people in the shipping industry – let’s
say ‘guilty until proven innocent’. Fifty years ago, no one could have imagined the tremendous impact that containerisation would have on the
way that goods are still being shipped around the world today. Another
phenomenon is the ‘go large’ drive that shipping has embraced when being
presented with jumbo-sized ships that could help liners, amongst others, in
their tough operating environment.
However, during the last ten years, serious concerns have been voiced
by the underwriting community about their possible exposure in the event of a major maritime emergency situation involving a mega box ship, due to the presumed lack of response capability due to, again presumed, lack of investment by salvage companies.
However, it is the very same community that enjoys the buyers’ market that results in considerable pressure on the salvors’ margins over the last five years or so and, unfortunately, the shipping community has not engaged with the salvage industry to assess a possible capacity gap and ways to close it.
New types of risk
There are of course a number of different types of casualty situation.
The traditional ones most looked at when assessing risks are failure of equipment or machinery, and navigational errors, leading to possible hull damage, groundings, environmental impact, etc. Emerging risks such as cyber security, the use of LNG as fuel and autonomous ships were, until recently, regarded as 'tomorrow’s problems'.
In the context of a mega box ship casualty, the most interesting risk to explore is ‘what is actually in those containers?’
When I started working in the salvage industry in 1999, my first encounter
with a then large container ship was the collision between the Ever Decent
with the cruise ship Norwegian Dream. Before our team had been able to assess the situation on board the casualty, we had the representatives of
a chemical manufacturer in our office explaining how close the passengers
on board the cruise ship and the coastal communities had come to a disaster. It turned out that, because of up to where the bow of the ship had entered the hold of the container ship, their product was loaded in the collision area.
A number of container fire cases that year, for example, the Aconcagua, the DG Harmony, but in particular, the CMA Djakarta, focused on the way that calcium hypochlorite was transported, which by then had led to a hive of activity for salvage companies due to the combustion of this cargo in certain circumstances. Other major fire cases were the Hanjin Pennsylvania and Hyundai Furtune. Fast forward a few years and prudent operators who were considering their larger new build container vessels tasked Smit to look into ways of increasing the effectiveness and range of firefighting tools on-board before ‘the cavalry’, professional salvors, would arrive on-site. Recommendations were made but investments were decided against by them leading to a competitive disadvantage over the life of the ship versus the chance of experiencing a fire on-board and no discount on the hull premium.
Well-known container casualties such as the MSC Napoli (structural failure),
MSC Chitra (collision), Rena (grounding), MSC Flaminia (fire and explosion)
and, of course more recently, the Kea Trader (grounding) have attracted
a lot of attention, due to their respective high costs of salvage and subsequent wreck removal. However, the fire on board the MSC Flaminia was characterised by the high costs incurred in respect of the treatment and disposal of the firefighting water as well as her affected cargo, thereby making it of the utmost importance for a salvor to not only look at putting the fire out but also be sensitive towards the post firefighting scope of work (and associated costs).
These aforementioned ships were actually all relatively small compared to those that we would like to think of when talking about the big ships that Maersk, MSC, CMA CGM, Cosco, China Shipping and others operate. So, coming back to the question ‘what is actually in those containers?’. This became one of the most important topics that raised awareness about proper stowage and misdeclaration of cargo. There have been a number of fire cases that could have become major catastrophes, for example, the Hanjin Green Earth and the CCNE Arauco, had it not been for the professionalism of the crew, the shore organisation and the appointed salvors. Whilst lessons learned from previous cases were implemented throughout the shipping industry, the availability of the actual cargo information remains a challenge, even today. Of course there is the cargo manifest and identified IMO cargo but for the salvage team and experts to properly assess 'what is where' the individual Bills of Lading give the best picture, yet only if cargo is declared properly of course.
Timing remains key
While one would like to think that possible constraints to rendering salvage assistance to these container hulks can for instance be defined as availability of necessary response resources (based on quantity, location and suitability), track record, relevant skillset, training, etc, experience clearly demonstrates that the biggest constraints are actually time and decisive leadership. Please allow me to expand on this further. In salvage, time is one’s worst enemy; it is similar to medical emergencies where one talks about ‘the golden hour’. Couple this to the question ‘when do I inform my boss?’ and one has the opening of a potential disaster scenario.
With any incident on board a ship, it is common that the crew will first try to assess and deal with the problem themselves before they notify the Designated Person Ashore and/or the competent authorities. Assessments and recommendations are being made by the shipowners/managers, possibly supported by external experts, such as, but not limited to, classification societies and, hopefully, they will inform their insurance broker at that time as well. Subsequently, a surveyor will be appointed, a lawyer retained and, depending on the type of emergency, one may appoint a tug and salvage broker to canvas the tug market for the best possible terms.
Obviously subject to the type of emergency, a towage and salvage company will become aware of the situation sooner or later. Sometimes the process above actually starts with a phone call from a salvor to a shipowner to notify him of the problem.
Now, combining all of the aforementioned aspects, shipping in a depressed market, salvors’ margins under pressure, ultra large vessels, mis-declared cargo, involvement of owners, charterers, underwriters, surveyors, class, brokers, lawyers, authorities, coastal communities and other stakeholders certainly makes for an interesting pressure cooker under which one endeavours to obtain the relevant operational / situational information in order to negotiate a salvage contract and render the required emergency
response services. Of course, there are different types of contracts available that can be used in different circumstances and each case will have its own characteristics on which an owner will ultimately decide what is best for his ship, his crew and his clients hence the best recommendation: be ready and prepared. Several owners and operators have call-off arrangements with leading salvors which can vary from having the salvor’s 24/7 emergency number incorporated into their ISM documentation and in full sight on the bridge of the ship, to the salvor being fully integrated into the shipowner’s/manager’s response organisation, having joint training for emergencies, and familiarisation with each other’s processes, fleet, classification society, underwriters, risk mitigation measures, etc, all with
the aim to optimise the response time and minimise (further) financial
and reputational exposure.
Unfortunately, accidents do not only happen to others. Therefore, the best
recommendation, regardless of the size of ship, is to be ready and prepared.