Statistics from the International Salvage Union (ISU) for 2014 show that gross revenues from all salvage and related activity were worth some US$775 million, almost identical to the previous year’s figure. The ISU said that this figure shows how vibrant and valuable the industry is in providing vital services to the shipping industry that prevent far bigger financial losses.
Within that total there was an increase in earnings from non-Lloyds Open Form (LOF) work and a fall in revenue from wreck removal activities, although this was partly attributed to the winding down of two major wreck removal projects, cruise ship Costa Concordia and container ship Rena. However, the number of wreck removal cases increased from 48 to 91.
The number of non-LOF cases increased from 196 in 2013 to 249 in 2014 with revenue more than doubling. LOF revenue as a percentage of salved values fell from 16.34 per cent in 2013 to 15.2 per cent in 2014.
The apparent increasing preference of shipowners to use commercial arrangements other than the traditional LOF for salvage work is causing the ISU and leading salvage firms some alarm.
The ISU argues strongly that LOF offers great benefits in emergency response cases and is keen to promote its continued use. It stressed that LOF revenues include the element of encouragement that has been an underlying principle of salvage for centuries. It ensures that it is worthwhile for salvors to maintain a response capability in an uncertain sector where income is not predictable.
Speaking at the Asian Marine Casualty Forum held in Singapore earlier this year, Mark Hoddinott, general manager of the ISU, said that that in recent years LOF has fallen short in some respects, particularly regarding environmental protection which has become a feature of almost all LOF cases in recent years. He said: “LOF’s continued decline is of great concern to salvors and property underwriters. I believe it not only needs reviewing but also needs to be promoted to the wider shipping and marine insurance industries.
“The ISU and Lloyd’s have been in discussions regarding an educational programme for industry about the benefits of LOF. When agreed it will be a long-term commitment on the part of both parties to educate the industry about the benefits of LOF and improve its use.”
At the beginning of October John Witte replaced Leendert Muller as ISU president. Mr Witte is executive vice president and senior salvage master at Donjon Marine Co in New Jersey in the USA, which operates a fleet of tugs, barges and heavy lifting equipment and conducts salvage, towage and wreck removal both in the USA and overseas. The new vice president is Charo Coll Bargues. Ms Bargues is general manager of the towage and salvage division of Spanish company Boluda Offshore and a former chair of the European Tugowners Association.