How investing in salvage could help save shipping's image

Shipowners and insurers calculating the cost of emergency response must also factor in the benefits salvors offer shipping’s bottom line, says Martyn Wingrove

Ship accidents generate a huge amount of public interest in shipping for all the wrong reasons.

This month, when Grimaldi’s roro cargo and container ship Grande America caught fire and capsized in the Bay of Biscay, its proximity to the French coast and subsequent worries about pollution made the accident a top news story on French television news channels..

The incident offered a good example as to why it is vital to ensure there is salvage cover at all times around main shipping lanes.

The trouble is, someone has to pay for it.

Shipowners, operators, managers, port authorities, insurers and national authorities -- it is in the interest of all these parties to support salvors. But the truth is shipping is becoming less willing to do so.

Certainly, shipping companies are facing their own set of pressures: falling margins, rising fuel costs and the capital investment needed to comply with IMO environmental regulations, and they do not want to face paying more for accident coverage in addition to their increased insurance costs.

Nonetheless, shipping needs a well-invested salvage industry. In 2017, salvage companies prevented 3.4M tonnes of pollution from being discharged into the world’s oceans from 252 salvage incidents. The data for 2018 will be published later this week, with recent trends indicating that there will have been more salvage incidents and greater levels of prevented pollution over the course of the year than in years prior.

All of these points will be under discussion this week as the sector industry descends on London for the International Salvage Union (ISU) Associates Day on 20 March.

Salvors, led by ISU president Charo Coll, will be arguing that shipping and insurance industries must, in their own interest, recognise the need to provide sufficient remuneration to encourage investment in emergency tugs, salvage equipment, training and the development of highly qualified staff. This is the minimum needed to enable the salvage sector to continue providing their essential global emergency response.

Compromise must happen from both sides, however. Salvors need to respond to the changing financial realities of shipping and accept greater use of commercial contracts for salvage projects even though these contracts were not originally intended for emergency situations that need immediate assistance.

Without some form of compromise, picture this scenario. There is a stranded ship -- for the sake of argument a fully-loaded crude carrier -- that cannot be brought under control. Due to years of investment shortages in salvage, there are no vessels available capable of handling the drifting tanker. The implications are obvious and could be disastrous. A ship striking a coast and foundering. Oil spills harming wildlife, local food sources and economies. Reports on television revealing that a lack of investment allowed the incident to happen. An ecological disaster and another black mark on the shipping industry’s image.

That particular horror-filled scenario has an easy fix. If shipping companies and insurance underwriters are willing to remunerate salvors for putting their lives on the line to respond to emergency situations such as the one described above, they can stop salvage from dying out.

The industry has to take responsibility as a whole, so what could an industry-wide solution look like? How about direct funding for global salvage operations by IMO? What about imposing stipulations that shipping companies and insurers should use existing salvage contract terms to cover all eventualities? What if the industry set up a fund to cover emergency response in the way the oil industry set up a fund to cover oil spill polution clean-up?

The solution is out there. Send me your thoughts at martyn.wingrove@rivieramm.com