Rising competition, falling use of LOF contracts and alternative-fuelled ships are issues the salvage industry faces in the new year
Salvors faced challenges in 2022 as the sector began to recover from the global Covid-19 pandemic, amid rising competition for emergency towage and more complex wreck removals.
Difficult market conditions, a loss of major players and experience, new entrants bidding for major projects, and the rising use of alternative fuels and energy storage systems were all concerns.
International Salvage Union (ISU) president Nicholas Sloane says there is fierce competition for the large projects on offer, which are becoming more complex, while insurers and shipowners are pushing forward different contract models to traditional Lloyd’s Open Form (LOF).
Salvors also face more pressure to protect the marine environment from oil, containers and other hazards, such as tiny plastic pellets and debris. Through emergency response and wreck removals, salvors have “strongly demonstrated the great environmental benefit of the salvage industry,” says Capt Sloane.
LOF is a proven workable form for salvage, although only 21 LOF cases were opened in 2022, according to Lloyd’s of London, compared to 26 in 2021 and 34 in 2020.
In response to the declining use of LOF, Lloyd’s instigated several workshops and reviewed the contract form to adapt it for the shipping industry’s requirements.
Within these workstreams, the industry was reminded of the benefits salvors provide to shipowners and insurers by reducing their exposure to reputational threats and major maritime accidents.
There are still reservations, especially with Asian shipowners and underwriters, to using LOF, but Capt Sloane highlights the importance of engaging with shipping lines to explain LOF’s advantages.
In 2022, the International Group of P&I Clubs published its report into contracting delays in emergency response, emphasising the importance of contracts such as LOF for encouraging rapid mobilisation of salvage assets and services.
Capt Sloane agrees LOF facilitates rapid intervention during emergencies, which is essential to minimise losses, improve seafarer safety and reduce environmental damage.
The IG report highlights how the role of ship masters has changed in emergencies, with captains waiting on decisions from shore management before engaging salvors.
This can be due to financial considerations as owners and insurers incorporate their contacting decisions in emergencies, leading to further delays in salvage response.
More contractors have entered the wreck removal market, with BIMCO undertaking a contract review. Concerns include contract termination and associated rights, the lack of transparency in tendering for wreck removals and the role of consultants. Capt Sloane says the existing IG/ISU tendering Code of Practice needs to be reviewed.
Changes in ship technology and trade patterns are also having an impact on salvage, wreck removals and preparation for emergencies.
Capt Sloane stresses the importance of salvage services in keeping global trade flowing.
This becomes more complicated by accidents involving ultra-large container ships, such as Ever Given and Ever Forward, Capesize bulk carriers and very large crude carriers in the last few years.
Container ship fires, being more frequent than reported incidents, generate complexity in emergency response, life-saving and salvage, as does losing containers overboard.
Salvors will also be challenged by changes in the types of marine fuel used by vessels. LNG, LPG and methanol are being more widely bunkered on ships than in previous years and have different characteristics to heavy fuel and diesel oil.
The impact of battery fires on board vessels is also a concern as these are installed to reduce emissions and electric vehicles are transported worldwide.
With multiple maritime accidents occurring, “it is not difficult to make a strong case for the professional salvor,” says Capt Sloane. “We provide vital services that save lives, protect the environment and prevent loss. We facilitate trade and are excellent project managers.”
Salvage companies undertake complex projects by mobilising teams of people and assets, contracting vessels and equipment, taking on risk and executing operations to prevent lives being lost and minimising cargo and ship losses, while preventing environmental pollution.
“The industry faces challenges, but members of the ISU are experienced, creative and reliable, and want to work as partners with insurers for their mutual client, the shipowner,” says Capt Sloane.
ESG agenda
ISU secretary general James Herbert underscores the importance of salvors managing the environment, social and governance (ESG) agenda for insurance and shipping companies.
He says property insurers should value marine salvors for the way in which, under the spotlight of public scrutiny, they help protect their reputations, enabling insurers to deliver their ESG commitments.
Carbon reduction and climate change are increasingly critical for these companies, according to Mr Herbert, but it is in environmental protection and pollution prevention that the members of the ISU offer the most benefits regarding ESG.
In 2023, ISU and IG are revising guidelines for special casualty representatives (SCRs), which are appointed to represent all interested parties in a marine casualty.
The existing guidelines were an amalgamation of the previous sets of SCR digests, which had been produced in the past two decades. An SCR provides an independent and industry-accepted method of monitoring the salvage operations and are meant to be impartial.
ISU expects the revised guidelines will give more clarity on the role of the SCR and plans to introduce them March 2023.
Q4 2022 salvage projects
Tsavliris Salvage had a busy Q4 2022 responding to incidents involving container, dry bulk, roro ships and a very large crude carrier (VLCC).
The Greek family run company mobilised vessels in early October to assist bulk carrier Madrid, which ran aground laden with 25,000 tonnes of wheat while sailing down the Parana River, Argentina.
Tugboat Ranquel, with 3,430 kW of power and 70 tonnes of bollard pull, and Brutus, with 4,030 kW and 72 tonnes of bollard pull, were contracted to assist this 30,900-dwt ship.
It was refloated without lightening and towed to Puerto Ingeniero Buitrago anchorage 3 October and the tugs were released the next day.
On 9 November 2022, roro ship Antonios M experienced main engine problems and was towed from Rio, Greece to Piraeus by Tsavliris tugboat,Hermes, which has 2,030 kW of power and a bollard pull of 41 tonnes. Both arrived safely at the destination 11 November.
Tsavliris was also involved in salvaging disabled VLCC Okeanos, which encountered propulsion problems 13 November, while laden with 135,800 tonnes of crude oil about 80 nautical miles off Dubai.
On 14 November, Tsavliris despatched anchor-handling tug Britoil 41, with 6,850 kW of power and 150 tonnes of bollard pull, to assist this 160,000-dwt tanker. Britoil 41 towed Okeanos to Mina Rashid A anchorage, Dubai by 18 November and provided standby services until 23 November.
Another anchor-handling tug was mobilised by Tsavliris 20 November, when container ship SC Philly experienced main engine problems in Gulf of Almeria, Spain. Kolga, with 12,170 kW of power and 208 tonnes of bollard pull, assisted this 14,000-dwt ship in 50-knot winds and high seas. Both arrived at Algeciras, Spain following the tow in severe weather conditions on 23 November.
In the Bay of Bengal, Bangladesh-headquartered Prantik Bengal Salvage and Diving salvaged a 100-m barge grounded at St Martin’s Island. This 4,200-gt barge was being towed empty from Chittagong to Malaysia by tug Glory 3 when high winds and waves during a cyclone caused the towing rope to break.
Barge MR 3322 was pushed by storm-force winds on to the island, known as an ecological hotspot, and Prantik took on the salvage operation on a no-cure, no-pay basis.
The necessary permissions and approvals were granted on the basis of no environmental damage, no disturbance to the underwater ecosystem or to the local inhabitants.
St Martin’s Island is of national importance as the only coral island in Bangladesh, with several ecosystems including mangroves, lagoons and rocky areas.
“The priority was to protect the flora and fauna of the island,” says Prantik managing director Golam Sarwar. “The situation was quite critical. The barge had finally settled in the middle of the island and if unattended, it would cause a severe ecological catastrophe to the island.”
A salvage solution involving 23 air balloons was used to refloat the barge. Each 18-m long balloon had a 1.5-m diameter, and a load-bearing capacity of 176 kN/m. Prantik used a team of 60 skilled workers with the balloons to lift, shift and refloat the barge.
When off the ground, one salvage barge pulled the stranded barge from the aft, while another, forward, held Barge MR 3322 in place to stop it from gaining momentum. Barge MR 3322 was rotated and laterally shifted by adjusting the air balloons until the heading was aligned to the marked channel for safe launching and refloatation of the barge, which was successfully achieved with minimal damage to the environment.
OS 35 wreck removal
Operations started in January 2023 on the removal of OS 35 bulk carrier from Gibraltar waters. Anchor-handling tug Koole 42 and a barge arrived from South America, while another tug, Koole 31, and accommodation crane K10030 were en route to the site.
Tuvalu-flagged OS 35 grounded outside Catalan Bay, loaded with steel bars, after a collision with LNG carrier Adam LNG in the Bay of Gibraltar 29 August. This caused a 10-m gash in the hull of OS 35 and it was anchored off Catalan Bay, where it partially sank and later began breaking up, resulting in an oil spill that soiled local beaches.
Salvage management group TMC Marine contracted Koole Contractors to break up and remove the grounded bulk carrier during Q1 2023.
The Port Authority of Gibraltar set a deadline of 30 May 2023 for the removal of the wreck and approved the salvage plan as it met its environmental, risk and safety standards.
“The plan is for the ship to be cut in two, at a point which avoids the oil tanks,” says Koole Contractors.
“The bow will be hoisted using chains, while the stern will be refloated. Both sections will be placed on a semi-submersible vessel and shipped to an EU-approved recycling facility.”
At the port authority’s behest, there are several options and contingency measures in case all does not go according to plan, as there are many variables at play. Operations will start with removing the remaining cargo, which is expected to take several weeks.
Koole Contractors purchased Koole 31, formerly Viking, and anchor-handling tug Norne to increase its fleet to four vessels in Q4 2022. Koole 31 was built in 2008 as a 332-gt anchor handler with a bollard pull of 72 tonnes, an overall length of 31 m, beam of 11 m, depth of 4 m and draught of around 4 m.
It is classed by Bureau Veritas with Ice Class 1C notation and is equipped with towing- and anchor-handling winches, deck cranes and Karmoy towing pins.
Koole 31 is capable of towing, pushing, anchor handling, anchor recovery, salvage assistance, wreck removal, escorting and cargo transport.
Koole 42 is a 2007-built, 42-m offshore tug with a bollard pull of 45 tonnes and 2,270 kW of power. It has a Heila deck crane, a Promac auxiliary crane, a double-drum anchor-handling towing winch and a tugger winch.
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