Even by its usual standards, the vetting debate at the Tanker Shipping & Trade Conference was especially intense: it covered a range of topics and generated a number of flashpoints.
Oceanfile Marine director David Savage set the tone when he said “tanker vetting continues to be fixated by counting numbers of observations as a measure of quality.” In Mr Savage’s view, fleets are benchmarked and personnel rewarded/penalised based on this arbitrary and often misleading measure. In many cases, an “acceptable SIRE result” is often less of a measure of risk and more of a raw count of the number of observations contained in one or more SIRE reports. Two observations in Chapters 4 (Navigation), 5 (Safety) or 6 (Pollution Prevention) are likely to result in rejection, regardless of the nature of those observations.
Picking up on these remarks, Marc Forster of RightShip said that as the largest provider of third-party vetting services “we do see a huge range of vetting criteria from our customers, some of it not well-based either on science or data – and in some cases based on historic performance before the introduction of the ISM code.”
There was ire for the overzealous SIRE inspector “frequently recording numerous trivial observations, forgetting that his role is to report details as to the condition of the vessel and standards of operation observed to allow assessment of the vessel, preferring to impress his principals with numerous observations that have no bearing on the risk a vessel might pose,” Mr Forster explained.
Mr Forster expressed sympathy for the shipowner: “We find that shipowners pay for nearly all SIRE or CDI inspections as it is a requirement to trade the vessel. This places the owner in the unenviable position of having to accept whatever the inspection costs.” Navig8 Chemicals Europe regional operations manager Raymond Walsh echoed this concern: “Various owners who sit in the pool tell me that inspections are a growing cost – an industry within an industry that is growing and growing.”
CDI general manager Howard Snaith explained that CDI has done a lot of work over the last five years to see that the cost of an inspection remains reasonable: “It’s a difficult line. We don’t employ the inspectors. We train them. We accredit them. We monitor them. But we cannot – for reasons of competition and anti-trust guidelines – dictate what they charge for a CDI inspection. We hope and expect that the eventual fee is the result of a fair negotiation. “What we have pushed forward is our ‘motivated reasons’ scheme.” Under this scheme, an owner that feels the fees being presented are excessive can claim ‘motivated reasons’ for cost. At that point CDI is legally allowed to look at the fees and make an assessment. “Since May 2014 we have done 5,200 inspections and received 25 claims for motivated reasons,” explained Capt Snaith. “Of those 25 claims, we have supported 18.”
‘Supporting a claim’ means that CDI can nominate a second inspector for the job. “That is in full compliance with competition guidelines because it is generating competition and that usually works in actually providing an alternative to the ship operator at a better price,” he explained.
Capt Snaith clarified how the CDI scheme works in practice, challenging the misconception that inspectors are sent from one part of the world to another, and that operators are obligated to pay for their first-class tickets. “CDI divides the world into zones, and inspectors operate within a particular zone – not between or across zones,” he explained. They operate on a cab rank style rota to enhance the impartiality of the inspection process.
He stated that “CDI – before my time – received reports that some operators had favourite inspectors. Rotating the inspectors in this way tackles that issue. Within the zones there may be some long distances that the inspectors are required to cover. We make guidelines on modes of transport available to the inspectors, but again there is a legal limit on how far we can go with this advice. We suggest operators mitigate these expenses by using the same travel companies that you use for your seafarers. This might allow the owner/operator to leverage discounts on fares. Also, not all flights need to be business. And again, if the operator finds the overall cost excessive, it can have recourse to the ‘motivated reasons’ process.”
There was also some discussion of the role software can play in the vetting process. Mr Forster said RightShip has a focus on big data: “We use predictive analytics to ensure data-driven decision making. This provides us with greater insights into ongoing safety improvements, an area for which there is no finish line. We have done this through the introduction of our new vetting platform, RightShip Qi.” Predictive analysis is a technology that learns from experience to predict the future. Mr Forster explained that RightShip is “trying to predict the likelihood of an incident in the next 12 months. The technology is not new, although it is new to the maritime industry.”
Staying with software, Mr Savage cautioned against over-reliance on auto-vetting systems: “Auto vetting uses algorithms where the VIQ questions are pre-assigned with low-moderate-high risk values. Whenever reports are imported, the system applies the appropriate risk weighting to all questions where negative observations have been made. These are added up to deliver the risk measure associated with the vessel. Although they are more effective than a simple count of the number of observations, these systems are flawed. VIQ questions pre-assigned with high-risk values that are answered with negative observations will deliver high-risk results. If an observation associated with a high-risk value question contains trivial content (e.g. “Oil marks were noted on the doormat to the vessel’s office”), erroneous high-risk results will be delivered.
Mr Savage explained that this “might easily result in the vessel being either rejected, or put on Technical Hold until the operator can persuade the oil company vetting department to examine the report contents and have the vessel re-appraised. At the very least, delays will occur and may result in a vessel being deemed non-acceptable to one or more charterers. Chartering opportunities may be lost. In such cases it is essential that the operator provides immediate and persuasive evidence to demonstrate the evaluation is flawed.”
It is essential that operators that are paying oil companies US$5,000 or more for inspections ensure they are gaining maximum value for their outlay, Mr Savage added. In assessing a report, if the potential risk value is appropriate to the observation, nothing needs to be done. If the observation is trivial but the question has been assigned as high-risk, then the potential risk value must be reduced. Conversely, if a VIQ question assigned with a low potential risk value has an observation response that warrants a high-risk value, the risk rating must be increased. After assessment, the report will deliver results that accurately measure the level of risk associated with the vessel.”
The concluding discussions centred on the continued viability of the SIRE scheme. Mr Forster said that at a recent Intertanko vetting conference, “one oil major stated that it uploaded 45 per cent of its SIRE inspections. Does this mean it only uploads the good ones or the bad ones? And why? And we have to ask: Is this isolated behaviour?”
“There is a huge lack of transparency between the charterers side and the owners side,” added Mr Walsh. “I do understand that some of the oil majors insist the owners do not divulge why the vessel has been failed. But often the commercial manager sitting in the middle does not know what is going on – and no one wants to tell us. More often than not, where there is an issue it remains completely unresolved and as the commercial manager we don’t know why the vessel failed. We move on to the next fixture, nominate the vessel for another cargo, and the situation repeats. But if we knew why a vessel failed an inspection, we could assess how we want to trade that vessel.”
For Mr Savage the answer lies in a self-assessment process exercised by the owner and evaluated by accredited experts with transparency. “I attempted this suggestion about 10 years ago, and I was told to sit down and shut up. All of this big data that is floating around does offer an opportunity to drill down to get proper evaluation on vessels and individuals. I thoroughly endorse an inspection scheme that allows operators to provide self-inspections to SIRE and CDI, to allow those inspections to be audited by a cadre of inspectors who would change their names to auditors. It would do what SIRE set out to do in 1993: reduce the burden on crews. When I look at SIRE’s founding statement today I do so with some hollow and sad feelings because the number of inspections did increase and the burden increased. It may be appropriate as SIRE celebrates its 23rd anniversary that as an industry we take proper stock and agree: the time has come to do something different.”
Mr Savage explained that “We have collated statistics on the average number of observations recorded when a vessel is self-assessed versus those uncovered by SIRE. A self-assessment generates between five and eight times more observations than a SIRE assessment. Operators tend to be more precise and particular, and probably have more time to conduct their own inspections. They are not limited by SIRE parameters, including the 8-10 hour rule.”
“I would agree with David on self-inspection,” said Mr Forster. “SIRE has been fantastic. But it is very rare that we reject vessels on the basis of SIRE observations. Our biggest sources of rejection come from port state control performance and incidents, not SIREs,” he concluded.