Koch Shipping Inc. Intertanko Vetting Presentation The Tanker Event Houston 26 March 2007.

Koch Shipping Inc.Koch Shipping Inc.

Intertanko VettingIntertanko Vetting

PresentationPresentation

The Tanker EventThe Tanker Event

HoustonHouston

26 March 200726 March 2007

How Koch Shipping views How Koch Shipping views tanker officer experience:tanker officer experience:

• The following guidelines apply to Koch The following guidelines apply to Koch Shipping Inc.’s vetting process for Shipping Inc.’s vetting process for tankers:tankers:– To be chartered by KSI, orTo be chartered by KSI, or– To carry Koch owned cargo, orTo carry Koch owned cargo, or– To call at a Koch company owned or term-To call at a Koch company owned or term-

leased terminal.leased terminal.

• Each OCIMF member has different criteria Each OCIMF member has different criteria for reviewing crew experience.for reviewing crew experience.


• The first KSI vetting check for Crew Officer The first KSI vetting check for Crew Officer Experience is the Experience is the total “Time in Ranktotal “Time in Rank” (TIR), ” (TIR), for for allall officers on board – Deck + Engine. officers on board – Deck + Engine.

• Radio Operators and Electricians are not Radio Operators and Electricians are not counted.counted.

• Koch Shipping sets the “bar” at 25 years – Koch Shipping sets the “bar” at 25 years – total or aggregate for all officers – with total or aggregate for all officers – with “reasonable” distribution.“reasonable” distribution.

• Range of TIR experience for vessels Range of TIR experience for vessels reviewed has ranged from 5 to 143 years reviewed has ranged from 5 to 143 years total TIR.total TIR.


WhyWhy::

• 1963: the Secretary of the Treasury's 1963: the Secretary of the Treasury's Committee on Tanker Hazards reported Committee on Tanker Hazards reported that "safety problems relate more to that "safety problems relate more to personnel than to materiel." personnel than to materiel."

• 1994: the U.S. Coast Guard recognized 1994: the U.S. Coast Guard recognized that roughly 80% of all marine-related that roughly 80% of all marine-related accidents are rooted in the human accidents are rooted in the human element---with the majority of these element---with the majority of these caused by organizational factors.caused by organizational factors.


Why? An example:Why? An example: A cadet and a First Assistant engineer A cadet and a First Assistant engineer

are sitting at the control station of a are sitting at the control station of a steam tanker underway in confined steam tanker underway in confined waters. There is a sudden noise.waters. There is a sudden noise.

The cadet says: “What was …..”The cadet says: “What was …..”The Engineer says: “damn!” and The Engineer says: “damn!” and

disappears down the ladder to the disappears down the ladder to the feed-pump flat.feed-pump flat.


Or – Or –

to put it another way,to put it another way,

we fail ships with low TIR we fail ships with low TIR

because we think that because we think that

the officers have not seen the officers have not seen

enough trouble!enough trouble!


• Exceptions:Exceptions:– The officers with low TIR also show high The officers with low TIR also show high

numbers in years of “Time on Same numbers in years of “Time on Same Type Tankers”, Type Tankers”, andand

– There are few procedural errors or There are few procedural errors or omissions noted as observations omissions noted as observations elsewhere in the SIRE report, elsewhere in the SIRE report, andand

– There are no training or certification There are no training or certification observations in the SIRE report.observations in the SIRE report.


• The numbersThe numbers::– In the past 12 months, we have reviewed In the past 12 months, we have reviewed

1162 ocean-going tankers, and found1162 ocean-going tankers, and found– 101 of them, or 9% had, at some time, had 101 of them, or 9% had, at some time, had

a SIRE report showing possible time in rank a SIRE report showing possible time in rank issues, andissues, and

– 23 of these, or 2% failed to obtain approval, 23 of these, or 2% failed to obtain approval, often due to more than TIR issues alone.often due to more than TIR issues alone.

– Overall 118 ships, or 10% were not Overall 118 ships, or 10% were not accepted.accepted.

Koch Shipping and Time In Koch Shipping and Time In Rank - Rank -

some examples:some examples:

Koch Shipping and TIR – Koch Shipping and TIR – some examples:some examples:

TIR issues – drilling down:TIR issues – drilling down:

In the last previous example, the owner In the last previous example, the owner appealed.appealed.

We asked for and received the vessel’s:We asked for and received the vessel’s:• Chief Officer’s records for work and Chief Officer’s records for work and

rest hours for the last 4 port calls, andrest hours for the last 4 port calls, and• The vessel’s Statement of Facts for The vessel’s Statement of Facts for

the same 4 port calls,the same 4 port calls,which revealed:which revealed:


• On the face of the records: 2 On the face of the records: 2 incidents of breach of STCW incidents of breach of STCW work/rest hours requirements, andwork/rest hours requirements, and

• In comparison of the work hours to In comparison of the work hours to SOF reports: two apparent cases of SOF reports: two apparent cases of under-reporting of work hours, andunder-reporting of work hours, and

• No non-conformities raised as a No non-conformities raised as a result of work hours being exceeded.result of work hours being exceeded.


After considerable discussion and After considerable discussion and advice to the owners to: “think about advice to the owners to: “think about it and get back to us.” the owner set it and get back to us.” the owner set an “expectation” of 2 STCW non-an “expectation” of 2 STCW non-conformities per year for his fleet for conformities per year for his fleet for work/rest violations, compared to:work/rest violations, compared to:

an extrapolated number based on our an extrapolated number based on our “sample” of 4 x 12 x 30 = 1440 “sample” of 4 x 12 x 30 = 1440 STCW violations/year for the STCW violations/year for the company fleet.company fleet.


Dealing with 1000+ N-C’s/year would Dealing with 1000+ N-C’s/year would overwhelm most management systems overwhelm most management systems – so what is – so what is reasonablereasonable??

• Accurately recording work/rest hours.Accurately recording work/rest hours.

• Setting criteria for submission of N-Cs.Setting criteria for submission of N-Cs.

• Using a management of change Using a management of change process to address the causes of the N-process to address the causes of the N-Cs.Cs.

One owner was noted as doing this and One owner was noted as doing this and their vessel received vetting approval.their vessel received vetting approval.


• DENIALDENIAL is not an acceptable is not an acceptable response to the issue of STCW response to the issue of STCW compliance and crew fatigue. compliance and crew fatigue.

• Demonstrating the presence of Demonstrating the presence of management awareness, and an management awareness, and an active management systemactive management system engaged engaged in correcting causes of STCW non-in correcting causes of STCW non-compliance is critical – and may be compliance is critical – and may be sufficient to gain vetting approval.sufficient to gain vetting approval.

Crew number vs. the vessel Crew number vs. the vessel trade:trade:• Tankers engaged in STS ops need an Tankers engaged in STS ops need an

adequate crew for mooring ops. (not 14)adequate crew for mooring ops. (not 14)• Tankers engaged in short-sea trading Tankers engaged in short-sea trading

cannot be safely operated with 2 cannot be safely operated with 2 officers.officers.

• Tankers assigned to short-voyage Tankers assigned to short-voyage lightering operations need an extra deck lightering operations need an extra deck officer and an extra engineer.officer and an extra engineer.

• See: See: http://www.maib.gov.uk/cms_resources/http://www.maib.gov.uk/cms_resources/Bridge_watchkeeping_safety_study.pdfBridge_watchkeeping_safety_study.pdf

http://www.maib.gov.uk/cms_resources/Bridge_watchkeeping_safety_study.pdf

http://www.maib.gov.uk/cms_resources/Bridge_watchkeeping_safety_study.pdf

Crew number vs. the vessel Crew number vs. the vessel trade:trade:

(click on the image below to start the video.)(click on the image below to start the video.)

What is STCW compliance What is STCW compliance worth?worth?

• Under OPA-90, a vessel causing pollution Under OPA-90, a vessel causing pollution of US waters must be in compliance with of US waters must be in compliance with “all applicable “all applicable federal safety, construction federal safety, construction and operatingand operating laws and regulations” in laws and regulations” in order to limit its liability.order to limit its liability.

• The Athos 1 grounded in Delaware Bay in The Athos 1 grounded in Delaware Bay in November 2004.November 2004.

• The cost of the cleanup (to end 2006) was The cost of the cleanup (to end 2006) was $164,000,000. $164,000,000.

What is STCW compliance What is STCW compliance worth?worth?The US Coast Guard exhaustively The US Coast Guard exhaustively

investigated the incident and their investigated the incident and their reportreport


indicated that the Master, Pilots and indicated that the Master, Pilots and Navigating Officer:Navigating Officer:

““had not shown any signs of fatiguehad not shown any signs of fatigueand met STCW and OPA90and met STCW and OPA90

rest requirements.”rest requirements.”**********************************

The owners were therefore able to limit The owners were therefore able to limit their liability to $45,000,000 under their liability to $45,000,000 under

OPA90.OPA90.


So the calculation of the value of STCW So the calculation of the value of STCW compliance in the case of the Athos 1 compliance in the case of the Athos 1 grounding and spill is:grounding and spill is:

Cost to owners if Cost to owners if notnot in compliance: in compliance: $164,000,000 $164,000,000

Cost to owners Cost to owners ifif in compliance: in compliance: $ $ 45,000,00045,000,000

Value of STCW compliance:Value of STCW compliance: $119,000,000 $119,000,000““Owners” = vessel owner & vessel P&I ClubOwners” = vessel owner & vessel P&I Club

Thank you!

At the end of the day, it is not the ship alone that successfully gets our cargo safely from A to B, but also the crew, who are the custodians of the ship and

its cargo. Each voyage is an adventure varying only in the intensity

of its challenges. Each challenge is faced by a dedicated, intelligent,

experienced officer who knows what to do next …. or not. The human factor

remains the most important.

Koch Shipping Inc. Intertanko Vetting Presentation The Tanker Event Houston 26 March 2007.

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