Planning for the re-activation of a fleet while being able to respond to events quickly are key, said panellists at Riviera’s Understanding vessel lay-up options in the age of Covid-19 webinar
The webinar was the fifth in Riviera Maritime Media’s Vessel Optimisation Webinar Week, part of our ongoing multi-week series of webinars.
LISCR senior vice president marine operations Thomas Klenum, Shipowners’ P&I Club head of loss prevention, London, Carri Woodburn, Lloyd’s Register Marine & Offshore vice president Middle East & Africa Tony Field and V.Ships Leisure managing director Per Bjornsen highlighted how planning for fleet re-activation and being able to react quickly to market events were crucial.
Mr Bjornsen highlighted the huge impact on the cruise ship industry. “We are now in the surreal situation where the whole cruise industry is in a zero-revenue environment.”
He said V.Ships Leisure had carried out a number of calculations when it came to choosing a hot or cold lay-up. He pointed to an example of a medium-sized cruise vessel where total costs are higher on cold lay-up due to the increased re-activation period and re-activation cost and risk.
He said “Over a 12-month period the warm lay-up is still the best solution financially and for the cash flow.”
Many webinar attendees appeared to agree in a poll. Asked ’Given the unknown timescales involved with Covid-19, have you used, or would you consider, hot or cold lay-up?’, 29% plumped for a warm lay-up and 57% for a hot lay-up, with only 14% opting for cold lay-up. For more on the webinar poll results click here.
Mr Bjornsen said “We think the most important part of lay-up is planned re-activation. We are coming back to a new normal and ships have to be prepared for re-adjustments for Covid-19, including air conditioning, temperature taking and arranging for fewer passengers and modifications for medical facilities.”
Ms Woodburn singled out important considerations for re-activation. “If your vessel is entered into international P&I it is subject to a lay-up reactivation survey normally when its lay-up has exceeded six months.”
She said a pragmatic approach with surveys where lay-up has happened because of Covid-19 is needed, and P&I have to approach ships on a case by case basis.
She emphasised “Record keeping is one of the strongest tools at your disposal as claims do still happen in lay-up, so ensure you have a robust system in place and crew committed to keeping detailed records.”
The repatriation of crew was highlighted by panellists as being particularly challenging. Mr Klenum said “One new aspect that has not come previously is the repatriation of crew. Airports and some borders are closed so how to repatriate crew presents a major challenge.”
And when asked about the most difficult challenges with seafarers due to Covid-19, Ms Woodburn said “With regards to personnel, some of the biggest challenges the club has seen have been repatriating seafarers in the event of an illness or injury claim. That has become more difficult to facilitate, although we have been achieving that.”
Mr Field emphasised the importance of communication by keeping all stakeholders fully informed and ensuring all stakeholders are part of the solution.
He singled out the importance of being able to react quickly. “You need to ensure you can react promptly to a market up-turn, this could make the difference to the future of your company.”
Indeed, the conclusions by panellists was that the key focus must be adapting quickly and focusing on planning.
Mr Bjornsen said “My key takeaway is a focus on planning and keeping sight of re-entry to service.”
Ms Woodburn said “There is a massive importance on preparation and being prepared to adapt quickly and safely.”
While Mr Klenum said “The key one for me is planning whether laying up for short or long term, so evaluating all parameters and making that decision before lay-up.”
You can view the webinar, in full, in our webinar library.
And you can sign up to attend upcoming webinars on our events page.
From top left, clockwise: LISCR senior vice president marine operations Thomas Klenum, Lloyd’s Register Marine & Offshore vice president Middle East & Africa Tony Field, V.Ships Leisure managing director Per Bjornsen and Shipowners’ P&I Club head of loss prevention - London Carri Woodburn