Download - TANKER OPERATOR MAGAZINE(Sept 2012)

AUGUST/SEPTEMBER 2012 www.tankeroperator.com

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CO2 saver

August/September 2012 � TANKEROperator 01

ContentsMarketsMark-to market valuations

News FocusNew IACS chairman airs his views

Germany Report� GL’s upgraded Aframax� Government funding� Marenave in the black� Autopilot saves money� SMM preview

Commercial Operations� Helping to reduce costs� C/P wording warning� CONWARTIME examined� Be aware of time bars

Front cover At SMM, Becker marine will be showcasing the company’s latest steering gear, which is claimed to be the world’s largest. Inaddition, Becker will be showing its various rudders and ducts aimed at cutting fuel costs by up to 8%.CO2 saver

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52

04

08

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12

51

Shipmanagement� Effective internal audits� Shipboard software� Wallem joins Nanjing Tankers� Shipmanagers help lenders� Increasing garbage problem� ECA voyage planning

P&IEC gives IG the nod

PiracyEffective rules needed

Technology52 Ice Class�Where is the Polar Code?�Arctic shipping development�Help with NSR transits

60 Technical Focus�MAN’s engine hardware�Pump upgrades save money

64 Tank Servicing�Benign crude in tanks�Bilge level switches �Enclosed space video

TANKEROperator � August/September 20122

COMMENT

Why do we go to exhibitions?

TANKEROperatorVol 11 No 8Tanker Operator Magazine Ltd2nd Floor, 8 Baltic Street EastLondon EC1Y 0UP, UK www.tankeroperator.com

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A visitor to a shipping exhibition from Mars –andthere might well be soon given that a craft haslanded on the planet – could well be lured into afalse sense of security.Upon viewing the many halls stacked with booths of all shapes andsizes and covering nearly every segment of the industry, plus the shearvolume of people encountered in the hallways, he or she wouldautomatically conclude that there is nothing wrong with this industry.

Why is it then that during one of the worst recessions on record,shipping exhibitions flourish? Is it to do with the often held belief thatduring bad times, companies should expend more energy on sales andmarketing?

So why do shipping exhibitions draw the crowds, pack the hotels,bars and restaurants in the host city, despite inflated hotel prices and thecurrency fluctuations, especially recently? Is it the networkingopportunities where company representatives can talk to their clientsface to face and market their wares to potential clients in a selectedshipping hub?

In Europe, the exhibition concept really took off in the 1970s aidedby increased and cheaper air travel and better facilities in terms ofhotels and exhibition centre services. They were often organised byleading shipping publishing houses who saw a market to be exploited.Although there are a few exhibitions, which have come and gone, theones that we now think of as the majors, have since flourished.

Asia catching upAsia is following and from a small beginning is now starting tochallenge the might of Europe in staging events. There are alsospecialised exhibitions and conferences aimed at a certain segment ofthe industry, for example, offshore, gas, workboats and tugs. They havealso built up a loyal following.

However, it is the majors that still hog the limelight, as where elsecan you see up to 50,000 shipping people in just three or four days. Bythe majors, we mean Nor-Shipping, Posidonia, SMM and possiblyEuroport in Europe, while Marintec, Kormarine and the Singaporeexpos, represent the major Asian input today.

At the beginning of September, we are all packing our bags forHamburg, Tanker Operator included. It is time for SMM (see page 21).

German companies have has always been at the forefront of technicalinnovations and in the main port cities, shipmanagement concerns haveflourished under the weight of tonnage built and ordered under the KGinvestment system, as have the service companies who look after

vessels calling at the ports, some of which are among the largestin Europe.

I suppose one of the key talking points at the exhibition and theconferences will be finance, or lack of it. With the KG system all butdead, German shipping companies are looking at other means offinancing their assets. This should be ‘meat and drink’ to the SMM ShipFinance Forum, which will no doubt see a good attendance.

Energy efficiency on board ships is another hot topic as the day ofthe eco-ship has arrived, mainly driven by international and nationalregulations, plus the constant efforts of the IMO to stay one jump aheadof regional regulators.

No doubt the arguments will rage over the merits of distillates,scrubbers, or the use of LNG as fuel, to cope with the worldwidephased lowering of emissions soon to be implemented. It seems thatthis subject is dividing the industry with diverse opinions regularlyaired.

Security hallMaritime security has also come to the forefront in the past few yearsand to encompass the ever growing number of security forms croppingup, the SMM organisers have dedicated a hall entirely to their needs, aswell as hosting a conference on the subject.

Similar to most major exhibitions, SMM tries to pack each segmentof the industry into its own dedicated area, or hall, or makes use ofnational pavilions. For example, we will see all the machinery,communications and navigation IT, in their own halls. What a companymakes of being next to their rivals is anybody’s guess. However, itseems to work.

The big spenders in terms of exhibition space tend to be the Asianshipyard associations, in particular the Chinese, South Korean andJapanese. With new orders tight, the competition to have the bestdisplay will probably be even more severe.

Certainly the bars and restaurants around the Alster Lakes, the RiverElbe and other popular areas of Hamburg, will be hoping for a bonanza.But will the visitors spend money?

This was the question posed at London’s recent Olympic Games andby and large, they did, perhaps not sufficiently in the retail areas, but ongeneral living expenses.

I was pleasantly surprised by the activity surrounding this year’sPosidonia exhibition, despite being held at a time of the playing out ofa Greek tragedy. I hope the same can be said for Hamburg upon myreturn. TO

INDUSTRY - MARKETS


Mark-to-marketvaluation challenges

“How confident are you that you know the true value of your business on any given day?Are you 100% certain that you have the means to accurately calculate your

fleet’s mark-to-market value?”

Javier Navarro, freight risk solutionsmanager at Triple Point Technologysaid that if you hesitate to answerthese questions, your company’s

future may be at risk.In the shipping industry, understanding thetrue market value of a fleet is the differencebetween sinking and swimming. Volatilityrelated to the number of available cargoes andvessels, operating expenses, such as bunkerfuel costs and other variables mean that afleet’s value has the potential to swing wildlyfrom one day to the next.

Performing frequent mark-to-market(MTM) valuations is an integral part of doingbusiness and is critical to ensuring thefinancial health of a commercial shippingoperation. However, due to the highlyunpredictable nature of the industry, thecomplexity of calculating freight rates andflaws inherent in popular valuation methodsand tools, companies often end up withinaccurate numbers. This provides a falsepicture of financial standing that can result inlost profits, faulty decision-making andultimately the demise of an entire business.

Fully understanding the challengesassociated with calculating accurate MTMvaluations and how to address them is criticalto staying afloat in the cut throat shippingindustry.

Adjusting freight rates The first of these challenges is adjustingfreight rates. The value of commodities inmost markets is transparent and easilydetermined at any point in time by looking atan index. But the freight rates that play such alarge part in determining a fleet’s MTMvaluation are not so clear.

The indices for freight rates, provided onthe Baltic Exchange, only take into accountcertain standard vessel sizes and a limitednumber of standard routes. In reality, very fewvessels are a standard size, or performstandard voyages. In order to determineaccurate freight rates, operators and charterershave to use complex formulas to adjust theindices to account for the proper vessel sizes

and routes. This is frequently done using antiquated

spreadsheets, a method that is prone to humanand formula errors that lead to inaccuraciesaffecting the MTM valuation of the entireportfolio. Overvalue the fleet, and there willbe a very rude awakening when an unexpectedevent requires funds that were assumed toexist, but are nowhere to be found.

The second challenge is gaining a clearpicture of another important factor in MTMvaluations - the value of multiple voyages. Avessel’s activity is often uncertain, particularlywhen there are multiple voyages involved. Inthese circumstances, a valuation can only bebased on a best guess about what thesubsequent voyages will be. This uncertainty –combined with dependence on error-pronespreadsheets – only adds to the difficulty ofproducing an accurate MTM valuation.

If depending on antiquated spreadsheets forperforming critical calculations is bad enough,depending on subjective information is evenworse. And so the third challenge isovercoming the highly personal and oftenskewed views of the market that manycompanies use to perform their MTMvaluations. It should go without saying thatthis subjective input can result in veryinaccurate numbers that obliterate all hope fora valid valuation.

The first three challenges lead to thecreation of an erroneous MTM valuation, butthe fourth is what happens once thoseinaccurate valuations filter through to thedecision-making process. Timechartercontracts specify the minimum and maximumtime a charterer will use a vessel. The accuratemarket value of a vessel must be known inorder to determine whether it should be keptonly for the minimum contracted time, orlonger. If the data driving that valuation isfaulty, then the resulting decision is also likelyto be flawed and a charterer may end uphanging on to a vessel that is losing money.

What makes this worse is that manycompanies limit themselves to using simplisticin-the-money/out-of-the-money calculations todrive valuations instead of other, more

complex methods that are more accurate -purely because the more complex methods aredifficult to manage in a spreadsheet.

Companies using the in- and out-of-the-money calculation stand to lose a significantamount of capital, especially when the marketis close to the level of the contracted hire rate,because the formula is not sophisticatedenough to effectively account for the frequentswings of the market.

The above challenges can be conqueredwith specialised solutions thatcomprehensively manage freight risk,chartering and vessel operations on a single,integrated platform. Unlike antiquatedspreadsheets, these solutions provide completetransparency across all aspects of the business,presenting an accurate view of a company’sexposure and financial standing in real-time. What to look for:� Robust freight risk management: It is key

that the chosen solution provides a real-time view of the position, including timecharter contracts, freight forward agreements, contracts of affreightment, cargo bookings and financial options.

The system should enable you to compute accurate freight rates with just a few mouse clicks and allow the saving of non-standard routes in the system that can be used to drive the calculations. It should also manage bunker exposure from physical contracts and bunker swaps.� Multiple valuation methods: It’s imperative

that the system selected is able to perform an accurate MTM valuation within seconds. It should also allow the application of multiple valuation methods (ie in- and out-of the money calculations; physical option intrinsic value calculations)that can be used to objectively drive important decisions including how long a vessel should be kept. Multiple voyages should also be easily valued.

� Chartering management capabilities: Thesolution ought to provide the ability to

manage all pre-fixture activities of a (Continued on p7..)

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INDUSTRY – MARKETS

Disclosure of market valueAn increase is expected in thesort of pressure recentlyexerted on shipping companiesby the US Securities andExchange Commission (SEC) tomake disclosure when themarket value of their vessels isless than their carrying value.According to UK-based accountant andshipping industry adviser Moore Stephens,the pressure for this type of disclosure, oftenreferred to as ‘incipient impairment’, wasreflected in the 2011 filings of many SECregistrants.

Moore Stephens partner David Choppingsaid, “The SEC has seen impairment chargesin the accounts of a number of shippingcompanies in the last few years. But it hasapparently not seen quite as many as it mighthave been expecting. It is easy to understandwhy the SEC, and others, might consider

disclosure of market value to be usefulinformation and want to see it more widelydisseminated.

“It is more objective than valuations basedon management estimates, it is morecomparable across companies, and it setsbenchmarks against which companies’ ownpolicies can be assessed. Indeed, for someparties, the information might seem far moreimportant than valuations based on projectedfuture income streams.

“At the same time, it is equally easy tovisualise objections to such disclosure.Values are to be determined on an unfixedbasis, so are arguably of only limitedrelevance where vessels are fixed for fairlylong periods with high-quality charterers.Similarly, while values may lookcomparable, if the fixture position differssignificantly, then such comparability mightbe considered spurious. And even if a vessel

is operating in the spot market, or a fixture isgoing to be ending shortly, while otherobjections might be less compelling, thereare still concerns about the volatility ofmarket values.

How relevant is a valuation at a point oftime in a volatile market where an assetmight have many years still to operate?

“Nonetheless, it seems very unlikely thatthe SEC will change its mind and decide thatsuch disclosure is not useful. It is far morelikely that other bodies, and indeed investors,will start expecting to see such information.This can happen without any need forchanges in the rules, and indeed the SEC hasnot explicitly changed the disclosurerequirements. It seems to have relied moreon the ‘Al Capone’ approach of a kind word;everyone already knows it has a gun!” heconcluded. �

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Speakers:Stephan Polomsky, managing director of Offen Tankers (keynote speaker)Ulrich Paulsdorff, managing director, Wallem ShipmanagementMark Bull, loss prevention manager, Liberty One ShipmanagementJose Milhazes, business process manager, Stolt TankersJan Erik Rasanen, business manager, Energy Solutions, ABB MarineDimitris Lyras, director, Lyras Shipping (chair).

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INDUSTRY - MARKETS

August/September 2012 � TANKEROperator

(Continued from p4..)commercial operation including voyage estimating, cargo management, and vessel management. For charterers, it’s important to be able to analyse potential profit or loss before making an agreement to transport cargo. You should also be able to easily view all upcoming cargo commitments or open tonnage positions, as well as view all vessels and when they are coming open within a given date range or specific zone.

� Comprehensive voyage and vessel management: Operators should ensure the solution selected enables them to keep track of day-to-dayoperations: arrival, departure, loading, discharging, bunkering and disbursement accounting. The solution should also maintain a technical and commercial description of vessels for improved controland efficiency.

In addition, because constant change is the norm in the shippingindustry, ensure a solution is selected that is flexible and scalable. Itshould be able to grow and change along with the business.

Protecting the bottom lineAccurate MTM valuations are critical to protecting profits andremaining competitive in the maritime industry. Too many companiesare unwittingly jeopardising their bottom lines and incurring significantenterprise risk by using inaccurate information to determine their fleets’value and make important business decisions.

These companies are operating in dangerous waters, risking lostprofits that could ultimately cause their entire business to go into anirreversible decline. These are treacherous times and in order tomaintain profit margins and remain competitive, commercial owners,charterers, and operators must embrace technology solutions that ensureaccurate MTM valuations and provide complete transparency across theenterprise.

Companies that invest in scalable technology solutions with theflexibility to address current and future requirements can expect to reapimmeasurable returns by maximising profits, minimising risks, andultimately achieving a bigger bottom line, Navarro concluded.

TO

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Tanker orders creep upWith new orders difficultto secure, South Koreanyards may be betterplaced to survivetoday’s difficult market.

This is reflected in the fact thatthese yards have taken 55% of allnew tanker orders placed so farthis year (beginning of July),Gibson Research said, as demandfor eco ships takes off.

Good packages are available,while newbuilding prices formost tanker types have fallen byabout one third since thebeginning of 2008, Gibson said.

New orders placed during the1st half of this year indicated thatwe are likely to exceed last year’stotal, which was exceptionally

low for all types of shipcontracting.

For example, firm orders for52 MRs were placed in 1H12,already exceeding the last threeyears’ annual totals.

Not surprisingly, Suezmaxordering has shown the largestdecrease with just three ordersplaced in 1H12. The currentmarket doldrums appears to haveplaced the lid firmly on a freshwave of tanker demand even attoday’s prices.

What we don’t need to see is afresh round of speculative orderstowards the end of this year whenthe tanker market is expected topick up ahead of winter demand,Gibson said. �

NEWS FOCUS


IACS to take a moreactive role

New IACS chairman – LR’s Tom Boardley- recently outlined the intended programmefor his 12-month tenure at the head of the class society association.

Boardley said that IACS wascoming out of the uncertaintysurrounding the EU’s anti-competition rules into taking a

more active role in various industry forums. He explained that meetings have already

been held with many industry bodies and moreare planned to discuss how best the shippingindustry can meet the technical challengesthrown up by the plethora of regulations soonto come into force, or under discussion, at theIMO. The main areas to be looked at are thepracticalities of any new rules in day-to-dayvessel operations, such as the ballast watertreatment issue.

The insurance industry is also beingengaged to exchange information onminimising risks, which the class societies seeas one of their critical roles.

As IACS chairman, Boardley’s short termagenda is to fine tune the harmonised commonstructural rules (HCSR). The initialconsequence assessment reports for the HCSRwere released for industry review at thebeginning of July, which in effect was the startof the official consultation process. It is hopedto adopt the rules for newbuilding tankers anddrybulk carriers during 2014, once a reviewhas been undertaken in March/April next yearwith the aim of publishing the new rules in

December 2013. He said that this particular piece of

legislation will be time consuming to bring tofruition and it will be the major issue duringthe coming year.

There are also various technical issues withthe ECAs, more of which will come on stream

shortly. “We will not try to frustrate theregulations, but will address the practicalissues thrown up by the rules,” he stressed. Hewarned; “If you don’t understand the detailthen you don’t understand the problem.”

IACS had significant input into the ILO’sMaritime Labour Convention (MLC) to

LR’s marine director Tom Boardley.

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provide uniformity. Another of the tasks is to re-assert the 13-member organisation as a

quality association with a stronger voice at the IMO, by way of a veryactive role in technical support for the flag states members.

As well as the IMO, Boardley said that he was keen to increasedialogue with the various EU departments, including EuropeanMaritime Safety Agency (EMSA), which will have a new man at thehelm later this year - Markku Mylly of Finland - who has beenappointed as EMSA’s new executive director, taking over from Willemde Ruiter.

Audit programmeAs part of the push to raise IACS members’ quality standards, eachclass society is being audited by their own appointed concerns. Since1st January 2011, the audit and assessment of compliance has beencarried out by independent Accredited Certification Bodies (ACBs).

Having now been in operation for nearly two years and given theproven benefits resulting from previous end user workshops, IACS willconvene a 2012 workshop later this year between its members and theirACBs to reflect on their joint experiences of the scheme and to discussany possible adjustments deemed appropriate to ensure it continues tomeet fully the demands and needs of all stakeholders for a robust andconsistent scheme of certification of its members.

The association will also be inviting flag administrations,classification societies, ACBs and other interested stakeholders thatmight have attended previous end user workshops to participate in the2012 workshop to be held in Mumbai this November.

IACS permanent secretary Derek Hodgson explained that the 13-member association would welcome more members, but no classsociety had applied for several years, which he thought could be downto other societies not coming up to the association’s criteria.

He confirmed that the Indian Register was now a full member againand the Croatian and Polish Registers had rejoined, following a periodon the sidelines.

Helping Boardley in his year of office is LR’s head of external affairs,marine business, Konstantin Petrov who runs the chairman’s secretariatfor the 12 months duration.

Around 95% of the work is undertaken by correspondence and thereare usually between 150 and 180 subjects being discussed through 11project teams.

Previous chairman Russian Register’s Pavel Shikhov remains as vicechairman, as is RINA’s Roberto Cazzulo, who will takeover thechairmanship from Boardley next year. TO

If you don’t understand the detailthen you don’t understand

the problem.

“

”Tom Boardley, chairman, IACS


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IACS Harmonised Common StructuralRules (HCSR) The first draft IACS’ HCSR wasreleased at the beginning ofJuly.

As part of the agreed process ofdevelopment, IACS said that it had invitedindustry to offer comments on all parts of thedraft rules prior to year-end 2012.

Feedback should be submitted via e-mailto [email protected] IACS said.

The Common Structural Rules (CSR) fordouble hull oil tankers and bulk carriers wereadopted by IACS Council in December 2005and came into force in April 2006.

These two sets of rules were developedindependently and there were some variancesin the adopted technical approaches for someof their elements. To remove variations andachieve consistency, IACS made acommitment to harmonise the CSR. Thisharmonisation project for the two sets ofrules began in 2008.

The project also set out to achieve fullcompliance with the IMO Goal Based

Standards (GBS), which will come into forcein the middle of 2016. With this objective inmind, this first release of the draft HCSR andtechnical background are in compliance withthe IMO Goal Based Standards (GBS),where functional requirements fall within thescope of these rules.

The harmonisation project has nowdelivered a single set of rules comprised ofcommon, harmonised requirementsapplicable to both oil tankers and bulkcarriers with specific sections of additionalrequirements applicable to each ship type.

Presentations of the draft HCSR are beingplanned for September in Busan, Shanghai,Tokyo, Houston, London and Athens.

The harmonisation of the rules involvedextensive technical work, testing andcalibration and now comes a period for themaritime industry and other stakeholders toreview the draft HCSR and raise questions,observations and general feedback, IACSsaid.

This initial industry review period will befollowed by a second in the Spring of 2013and a review by IACS societies’ technicalcommittees in the Autumn of 2013 with aview to adoption of the HCSR by IACSCouncil in December 2013.

Knowledge centreTo help with this task, IACS has set up, onthe IACS website, a ‘Knowledge Centre’(KC) where questions, observations andfeedback can be found. In addition tooffering support during the review period,the KC will act as a depository ofknowledge, explanations, commoninterpretations and understandings, as well asfacilitating the management and maintenanceof the HCSR in the future - thus facilitatinguniform implementation of the final rules.

IACS chairman Tom Boardley estimatedthat to get to the final objective of entry intoforce scheduled for 2014, the project willhave cost £9 mill. �

INDUSTRY - GERMANY REPORT


GL unveils upgradedAframax design

Following the launching of GL’s Aframax conceptual design, developed in co-operationwith the National Technical University of Athens (NTUA) about four years ago, the

class society has introduced a new design following feedback from shipyards and tanker operators.

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The new design concept developed,called BEST-plus, incorporatesmany facets of the original designenhanced by the integration of

hydrodynamic optimisation of the hull formand thus, offering further reduction in fuelconsumption and emissions.

GL and NTUA again co-operated to developtheir latest design concept and this time weresupported by FRIENDSHIP Systems – a GLconcern, which provided the company’sframework computer aided design (CAD) andcomputational fluid dynamics (CFD)integration platform.

Based on current growth rates, oil transportdemand is forecast to be lower than tankersupply for the next couple of years, However,even a small change in demand will open upopportunities for new Aframaxes from 2014,GL said.

An analysis undertaken by GL showed thataround 20% of existing Aframaxes will be atleast 15 years of age this year, which couldtrigger replacement activities, the class societysaid.

GL said that the new BEST-plus designanticipates this replacement demand byintegrating only the technologies that existtoday. It targets the typical Aframax trades inthe Caribbean. Facilities in the main US Portsand in the US ECA set the operating

conditions, the class society explained. IfMexico becomes part of an ECA region, some30% of the transit distance would be inside anemissions control area, GL said.

The latest design assumes the vessel ispowered by using MGO as a fuel when sailingwithin an ECA. However, both LNG as a fueland the use of scrubbers are considered asalternatives to the basic design concept.

The need for a relatively high speed, whichwas mentioned by operators active in theCaribbean trades, must be considered withregard to the forthcoming EEDI requirementto ensure the vessel’s superiorcompetitiveness, GL said.

Addressing the need for safer tankers, theconceptual design is aimed at reducing the oiloutflow in case of an accident. It alsocontributes to greener shipping by improvingenergy efficiency and thus reducing CO2emissions per unit transport. In addition, thedesign is claimed to reduce fuel costs by usingan optimised hull form and also increasingrevenues by offering greater cargo capacity,the class society said.

An advanced optimisation environment wasused for the design approach, which integratedtools to predict the required propulsion power,stability, oil outflow, cargo capacity and hullstructural scantlings. These were achievedthrough the linking of the Friendship-

Framework with SHIPFLOW, NAPA andPOSEIDON and by using parametric modelsfor the hull form, layout and structure,respectively.

As a result, the design concept offersimproved cargo capacity with optimum speedperformance. The main particulars arecomparable with similar size Aframaxes.

The optimisation targeted speeds at threedifferent drafts, a cargo capacity taking intoaccount cargo volume and mass, hull structuremass, cargo and ballast tank layouts, as well asdouble hull width and height, which determinethe oil outflow volumes in accidents. Relateddesign parameters were systematically variedand about 2,500 design variants weregenerated and assessed.

Cost of transport – ratio of annual capital,fuel and other operating costs to annuallytransported cargo mass – normalised withrespect to the reference design, was used asthe optimisation’s primary target function. Thecapital costs were based on $58 millnewbuilding price and a 25 year lifespan. Fuelcosts were computed according to a dedicatedround trip model – with HFO at $500 pertonne and MGO at $800 per tonne – for theCaribbean trades. The other opcosts wereconstant – about $3 mill per year – based onMoore Stephens Opcost 2009.

The reference design for comparing



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transport costs was an existing pre-CSRtanker, which was also used in GL’s 2008study. Compared to the reference design, a 7%improvement in transport costs was realised,due to the better hull form for the best hullvariant. It was noted that many design variantswere optimal in a Pareto frontier analysis,which meant that the selection of one variantfor the final design depended on the weightingof the different optimisation targets.

Therefore, depending on the designer’schoice, a design optimised for oil outflow,EEDI, or for transport costs, might beselected, GL said.

The optimised hull form was designed for aspeed of 15.6 knots at the design draft with a95% confidence interval. The speed at theballast draft of 7.4 m is 16.8 knots. This

represents a favourable speed increase whencompared with recently built Aframaxes. Witha standard main engine for Aframaxes – MAN6S60MC-C, the fuel consumption iscomparable with similar tankers of this size.

With a high speed and large cargo capacity,this design will easily meet future EEDIrequirements, the class society claimed. Theattained EEDI value is merely 84% of thelatest published reference line value for thisvessel size. This means that the vessel wouldbe in compliance with EEDI regulations evenif the first reduction to the required index hadalready started. At current estimates, this willoccur on 1st January 2015 at the earliest.

Although a vessel contracted before EEDIhas entered into force will not normally needto comply, vessel entering into the market say

in 2017, will be more energy efficient and,therefore, more likely to attract charterers thanolder vessels with lower energy efficiency. GLclaimed that its new design would remainhighly competitive.

To reduce oil outflow in case of accidents,the double hull side width was eventually setto 2.65 m. In addition, to further reduce cargotank penetration in the event of a grounding,the No 1 cargo tank’s inner bottom was raisedfrom 2.1 m to 2.75 m. To ensure structuralcontinuity, an inclined inner bottom is

Principal Particulars – BEST-plus

LOA…………………………………250 m

Beam…………………………………44 m

Depth………………………………..21.5 m

Design draft…………………………13.7 m

Deadweight………………………114,923 t

Cargo capacity………………129,644 cu m

Block coefficient……………………....0.85

Double bottom height………………..2.1 m

Double bottom hull COT 1………....2.75 m

Double bottom width……………….2.65 m

Loaded speed at design draft……....15.6 kn

Ballast speed at design draft……….16.8 kn

EEDI………………...3.2814 g CO2/(t*nm)

Source: GL.

The BEST-plus concept can be adapted for using LNG as fuel with gas tanks locatedon the deck.



proposed between two frames. The final hull structure was evaluated with

finite element analysis according to IACSCSR.

Typically, the sea margin is only estimatedto ensure that the vessel has sufficient reservepower to overcome adverse conditions and tokeep to its schedule. Using advanced potentialflow prediction and Caribbean Sea wavecharacteristics, the added resistance in waveswas computed for the new design concept. Itwas confirmed that the available power wassufficient to deliver schedule reliability in 95%of all the encountered sea states.

BEST-plus’ hull form was designed to yieldoptimal wake properties, resulting in higherpropulsion efficiency. Today, modern CFDtechnology facilitates analysing the flow fieldlocally, GL said. A wake equalising duct(WED) was considered as a possibleenhancement for a possible newbuilding, aswell as retrofitting. A parametric model of theWED was generated and many differentconfigurations were evaluated, keeping thehull form and propeller fixed.

One configuration was found that reducedthe power delivered by 4.5% at the designspeed. Alternatively, the WED can give anincreased design speed of 0.2 knots to 15.8knots.

GL claimed that this conceptual design hasthe lowest transport cost and the highest speedamong the comparable designs available andalso features a low EEDI and a low oiloutflow index. With a possible marketupswing, due to the expected older tonnagereplacement requirements and by onlyincluding existing technologies, the classsociety said that this design concept will lookattractive for those shipowners who wish tostay ahead of the competition for the nextdecade.

As mentioned BEST-plus was developed by

GL Strategic Research and Development, theNational Technical University of Athens(NTUA) and GL’s subsidiary FRIENDSHIPSYSTEMS.

The team proposed a synthesis model thatcomprised measures of merit forhydrodynamics, structures, payload, oiloutflow probability in case of accidents,energy efficiency as expressed by the EEDIand, very importantly, economics.

BEST plus is an acronym for ‘BetterEconomics with a Safer Tanker.’ Within BESTplus, GL said that more than 2,000 designvariants were evaluated in a concerted mannerby combining simulation codes such asSHIPFLOW, GL Poseidon and NAPA, via thecomputer aided engineering environmentFRIENDSHIP-Framework.

Supplementary hydrodynamic analyses werejointly undertaken by FRIENDSHIPSYSTEMS and the University of AppliedSciences in Bremen. Using the most advancedtanker design from BEST plus, an additionalpropulsion improvement device was

introduced, with the aim of homogenising thewake field in the propeller plane and furtherenhancing propulsive efficiency.

A duct was selected due to its inherentsimplicity, presenting itself as a goodcandidate not only for new designs but also forthe refitting of ships in operation.

In order to be able to investigate aconsiderable number of design variants, a fullyparametric model of the duct was developedwithin the FRIENDSHIP-Framework. For theviscous flow analyses, the CFD codeSHIPFLOW-XCHAP was used. XCHAPoffers an overlapping grid technology thatmakes use of high-resolution body-fitted gridsaround appendages, which are superimposedon a background grid fitted to the hull form.

This yields high accuracy in the flowregions of interest and allows for automaticupdates when changes in geometry areconsidered. Combining both theFRIENDSHIP-Framework and XCHAP,several hundred designs were studied.

A comparison of Aframax CSR tankers’ EEDIs, showing the BEST-plus design to be one ofthe lowest.

Source: GL.

BEST-plus was the result of industry feedback, including comments from shipyards and Aframax tanker operators.

TO

Thus, nearly €60 mill to promote theshipping industry this year isready, the VDR said. “The Germanparliament is proving itself to be a

reliable partner for the continuation anddevelopment of the maritime alliance,” saidRalf Nagel, VDR executive committeemember.

However, he expressed regret that theFederal Government has again halved theaverage shipping promotion budget for 2013.

He said that the Bundestag, the NorthGerman states, the union Verdi and the entiremaritime industry had continued to developthe alliance. “With their decision, the FederalGovernment has isolated the maritimealliance,” Nagel said.

At the VDR’s general meeting held on 8thDecember last year, it was decided to allocate€30 mill per year to promote training andemployment in the maritime industry withinGermany. Some €20 mill will come from theGerman shipowners and the remaining €10mill will come from increasing theAusflaggungsgebühren, the VDR said at thetime.

In another move, the Federal Government

has also introduced a draft law on theregistration of security companies to operateon seagoing vessels. Speaking in July, MichaelBehrendt, VDR president said: “We welcomethe initiative of the Federal Government toregulate the use of private armed securityforces on ships flying the German flag. Ourowners need clear directions in order toeffectively protect their seafarers from thethreat of piracy.”

The landmark decision for promote a lawhad taken a long time. However, it wasimportant, said Behrendt, that internationalsecurity companies can be authorised to beused on board German flag vessels.

“It is therefore encouraging that theapproval process was agreed, as we hadrequested based on the IMO guidelines,” hesaid.

Approvals by the Federal Office ofEconomics and Export Control (BAFA) willbe monitored after the Bill comes into force.Nagel, said: “A limitation of approvals issensible to ensure a permanent high securityservices standard of equipment andpersonnel.”

Nagel said that private security companies

represented only the second best solution toprotect crews, as sufficient protection of theinternational merchant fleet by sovereignsecurity forces could be available for theforeseeable future, according to the FederalGovernment.

Sufficient time neededHe expressed concern as to whether theshipowners would have sufficient time to finda suitable security advisor, once the law hadentered into force. Nagel said: “There is nolegal obligation for shipowners owning vesselsflying the German flag to only use the BAFAapproved security service, only maybe when asufficient number of private securitycompanies become registered. There is a riskof a further split when too few companies arelicensed.

“Most importantly, it is now necessary toget the necessary legal regulation on the tablevery quickly. We are participating in theimplementation of legislation in aconstructive, effective and pragmatic co-operative manner with the relevant authoritiesin order to avoid friction and unnecessarybureaucracy,” he concluded.



VDR fights forgovernment funding

The German Shipowners’ Association (VDR) has welcomed the decision by the BudgetCommittee of the German Bundestag to unlock funds under the

so called ‘maritime alliance’.

TO

German shipping statisticsAs of the end of last year, figures produced for theVDR, showed that the German administrationstood at number 14 in the world’s flag stateleague.

German controlled vessels flying the domestic flag amounted to14.9 mill gt, or 1.5% of the world’s total. in 388 companiesidentified by the BSH and VDR.

However, looking at the tonnage controlled by German domiciledcompanies, this rockets the country into third place with 3,878vessels of 124.8 mill dwt, or 9.4% of the world’s total. The averageage of the fleet is only eight years.

Looking at the tanker statistics, there were 455 vessels in theGerman fleet of 22.9 mill dwt, amounting to 4.1% of the world’s

total at the end of last year. Of those over 100 gt, 282 were crude oilcarriers, 109 chemical and other liquid carriers, 56 gas tankers andfour bunker tankers.

New people entering the shipping sector as at the end of last yearstood at 720 seafarers and 366 apprenticeships to shipping andchartering managers, according to figures produced by theBSH/VDR.

There were 388 companies domiciled in Germany, spread mainlyaround the northern states, including Niedersachsen (Elbe, Weser andJade/Ems), Hamburg, Schleswig-Holstein, Mecklenburg-Vorpommern, Bremen and others, according to the figures releasedby the VDR.

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One company to have made astrong start this year was mixedfleet German owner MarenaveSchiffahrts.The bottom line was a consolidated net profitof €3.1 mill for the first three months of thisyear. The company claimed that this was thebest quarterly result since the onset of theglobal economic and financial crisis in thethird quarter of 2008. In addition to the netresult, key performance indicators also showedimprovements.

Sales revenues rose by 34%, compared tothe same period in 2011. As costs only rose ata disproportionately low rate, the shipoperating result and the operating profit fromshipping operations showed growth rates of47% and 52%, respectively.

The reasons for these positive developmentswere to be found in the investment anddeployment strategy advocated andimplemented since the company was formed.CEO Tobias König said: “The diversifiedemployment of the fleet in all segments of theshipping industry, as well as the mix of spotand longterm fixed chartering makes it

possible for the contribution to earnings of theships employed under medium term and longterm arrangements to more than offset thenegative contribution to the consolidatedresults of segments affected by crises.”

Marenave’s strategic goal is to further growthe fleet. König said; “This is still a time topurchase ships on favourable terms and manymarket participants expect 2012 to be a yearwhen many shipping limited partnerships inthe German Market will come up for sale. Asa listed stock corporation, we find ourselveswell positioned to profit from the comingchanges.”

Marenave Schiffahrts was the first publiclytraded shipping fund company in Germanyorganised as a joint stock corporation underGerman law (AG, Aktiengesellschaft).

It was developed so that institutional andprivate investors could obtain long termexposure to the shipping market and diversifytheir portfolios further.

The company’s goal is to set up adiversified portfolio of container vessels,tankers and bulkers and to generate incomefrom buying, selling and chartering ships.

Marenave’s fleet currently totals 13 vessels:six Panamax and Handymax product/chemicaltankers, two 1,200 TEU containerships, onecar carrier and four Supramax bulkers.

Mid/long term charter agreements for thecar carrier and the bulkers have securedcharter revenues of about $260 mill. Theaverage return on capital employed for thevessels under long term charters is close to15% per annum, which represents thebenchmark for future investments, thecompany said.

Listing on the stock exchange putsMarenave Schiffahrts in a position to raisefresh capital for the acquisition of additionalvessels, as needed and given the appropriatemarket conditions.

This will allow the current favourablemarket phase to be used for the targeted fleetexpansion and thus an extension of operationsin Hamburg, the company explained.

Marenave Schiffahrts claimed to be one ofthe few German shipping companies with acorporate structure that leading banks view asa necessary condition for financing futureprojects. TO

Marenave bucks the trend

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A positive effect onfuel consumption

As a consequence of recent IMO regulations, shipowners are requested to improveenergy efficiency of their ships’ operation with regard to various factors that drive

fuel consumption and emissions.

Claiming to address theserequirements is the German-basednavigation system manufacturerRaytheon Anschütz.

This claim was made, following theretrofitting of the company’s newly developedautopilot series NP 5000 on board a fleet oftankers.

As one of the first customers, US-basedOverseas Shipholding Group (OSG)contracted Raytheon Anschütz to exchange theexisting autopilot systems in the tanker fleetwith the NautoPilot 5300. The first autopilotsystem was installed on board the AframaxOverseas Fran in October 2011.

“OSG are undertaking great efforts toincrease energy efficiency on board of theirships. The choice of our new adaptiveautopilot system was influenced byconsiderations of saving fuel and thusreducing emissions”, said Olav Denker,Raytheon Anschütz product manager. “WithOSG, we have now had the chance to provepositive effects of NP 5000 on steeringperformance and fuel consumption in practicefor the first time.”

NP 5000 helps optimise rudder movementswith its integrated Eco-Mode. In Eco-Mode,the autopilot automatically adapts to thecurrent sea state and weather. Instead ofkeeping a heading using frequent rudderactions with high amplitudes, the rudder’ssensitivity to periodical yawing movementscaused by roll and pitch is reduced.Subsequently, less rudder action is required,which leads to lower levels of speed reductionand thus less fuel consumption.

Overseas Fran’s first voyage with the NP5000 fitted was from Skagen to New York. Toevaluate the actual effect of NP 5000 onrudder steering, during this voyage theheading and rudder plot was compared withthe results of the previous voyage on the sameroute with the old autopilot system, undersimilar weather conditions during bothvoyages.

Capt Dmitry Shatrov, the tanker’s Master,explained: “We can see on our print-out that

rudder movement ismore economic andgentle with the newautopilot system.”

The effect of Eco-Mode is furthersupported by the newintegrated heading andrudder plotter, whichprovides a graphicalindication of headingchanges and theresulting rudder angles.

This graphic displayinstantaneouslyindicates the steeringperformance of thevessel due to theeffects of changes toparameter settings,such as rudder, counterrudder and yawing.The operator benefitsfrom simplifiedadjustments of theautopilot’s settings to gain optimised steeringperformance, which further minimises rudderaction and thus increases fuel efficiency, thecompany said.

“The newly installed autopilot system has auser-friendly interface in which you can easilyadjust autopilot functionality in the prevailingcircumstances, weather condition and requiredsteering accuracy. So that we can navigate thevessel more gently and economically, takinginto consideration fuel savings and safety”,Capt Shatrov concluded.

The relevance of optimised ruddermovements for fuel savings has already beenhighlighted by IMO as a ‘best practice’ forefficient ship operation when developing aShip Energy Efficiency Management Plan(SEEMP).

“Since we all know that less ruddermovement significantly contributes to reducedfuel consumption and emissions, we havedeveloped and implemented unique features,such as the Eco-Mode and the heading and

rudder plotter into the new NP 5000 autopilotseries,” Denker explained.

In addition to its fuel-saving potential, NP5000 is also equipped with functions for highprecision course keeping, for example, for safenavigation in challenging sea areas nearcoastlines and shallow sea areas, platforms, orarchipelagos.

Besides heading control and track control,the new autopilot features a course controlmode. When steering in this mode, theautopilot automatically compensates for driftand keeps the vessel on the defined courseover ground line. An optionally integratedacceleration monitor provides a warning if apre-defined cross acceleration limit isexceeded.

NautoPilot 5000 was launched at thebeginning of 2011 as successor to theNautoPilot 2000 series. In total, RaytheonAnschütz supplies 800 autopilot systems eachyear to the worldwide shipping market, thecompany claimed.

NautoPilot 5000 with Integrated heading and rudder plotter.

TO

August/September 2012 � TANKEROperator . 21

INDUSTRY – GERMANY - SMM PREVIEW

September sees theshipping world in

HamburgNext month, the shipping world will descend on Hamburg for the bi-ennial SMM

exhibition and conference, which this year celebrates its 25th anniversary.

There will be 2,000 plus exhibitorsfrom more than 60 countries takingup over 90,000 sq m of exhibitionspace with more than 50,000 trade

visitors expected.Alongside the regular SMM Ship Finance

Forum, is MS&D, an international conferenceon maritime security and defence; and gmec,global maritime environmental congress – anintegrated component in the SMM supportingprogramme for the second time.

Another regular feature is the SMMOffshore Dialogue, also held for the secondtime this year, with industry experts discussingoil and gas production at sea and offshorewind energy. There will be more than 150programme items.

MS&D exhibition and conference has nowbeen incorporated in SMM with dedicatedfloor space located in the new Hall B8.

“Tomorrow’s Champions” is the subject ofthe SMM Ship Finance Forum. Leadingexperts from all parts of the world discusscurrent challenges and perspectives in the shipfinance event on 3rd September, which formspart of the expo.

This is the fourth time that SMM organiserHMC (Hamburg Messe und Congress) will co-

host this English-language conference togetherwith Financial Times Deutschland; more than200 participants and speakers are expectedfrom all over the world.

According to analyses by ClarksonResearch, some $90 bill was invested in newvessels last year –a lot less than in record year2007 but still a large amount, which theshipping lines cannot raise under their ownsteam. At present, it is becoming increasinglydifficult to obtain equity capital from investorsand loan capital from banks. Private investorsare scared off further commitments by thenumerous insolvencies seen with single-shipcompanies, the organisers said.

“The classic German KG model has becomeobsolete for the time being,” said Dr TorstenTeichert, chairman of the management boardof Lloyd Fonds who will present ideas on thefuture role of shipping funds at the forum. Heexpects that international investors will infuture become more involved in the maritimesector.

“The entry of US private equity companiesgives German shipowners a fundingalternative to the previous models,” said DrDirk Lammerskötter, management board ofHSH Corporate Finance. But experience

shows that their profit expectations aresubstantially higher.

While some of the traditional ship financierssuch as HSH and Unicredit are successivelyreducing their commitment, the public-sectorKfW IPEX-Bank is increasingly moving intoproject financing.

However, bank regulations are becomingmore and more stringent (Basel II and III),which means that most of the banks find ithard to work in this volatile industry. So far,the expectations that an Asian bank would fillthe gap by moving into this sector in a bigway have not been fulfilled – as a rule sucharrangements operate with a linked packagedeal whereby a ship built by a South Koreanor Chinese shipyard also gets a fundingarrangement, or credit guarantee from thosecountries.

In Germany, more attention is now directedtowards alternative financing instruments,such as borrower’s note loans, profitparticipation capital, and ship mortgages.Some of the major international shippingcompanies are already stock exchange listed,or can get access to the capital market bymeans of bond issues.

Investors currently benefit from an

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MEET US AT SMM 2012 Hall A1 stand 217



extremely favourable price level – “I think therisk-return ratio is at present the best it hasbeen for many years,” said Dagfinn Lunde,director of DVB Bank and a panel participantat the SMM Ship Finance Forum. That is alsoconfirmed by the figures from ClarksonResearch: “Compared with their peak in 2008,shipbuilding prices have dropped by 30, or40%,” said managing director Dr MartinStopford.

The current crisis does give investorsworthwhile openings. Newbuildings aremostly more energy-efficient than ships in thecurrent fleet, so that is very useful in view ofthe dramatic rise in fuel costs. Individualshipping companies are already thinking ofadding to their fleets – provided they find theright financing partners, the organisers said.

ShipbuildingThe European shipbuilding industry is comingunder pressure - in 2011 the number ofdeliveries related to tonnage exceeded thenumber of new orders for the fourth year insuccession, at about 2.45 mill CGT (versus 1.8mill CGT in 2011).

This means that the orderbook shrank to onethird of what it was five years ago (around 5.7mill CGT). Nevertheless, this industry hasmajor importance for Europe - its salesvolume, with a workforce of more than500,000 people, is more than €80 bill perannum.

The Community of European ShipyardsAssociations (CESA) and the EuropeanMarine Equipment Council (EMEC) have nowagreed to set up a joint association to representthe interests of the maritime shipbuildingindustry.

The new association will include nearly100% of the maritime industry from 18countries. “This focusing of activities willstrengthen the position of the Europeanshipbuilding industry, as we will also see atSMM,” said Peter Bergleiter, business unitdirector at Hamburg Messe und Congress,SMM’s organiser.

Meanwhile, the European shipbuildingindustry is focusing increasingly onconstruction of technologically sophisticatedship types - Meyer Werft (Germany) and itscompetitor Fincantieri (Italy) have establishedthemselves as the leading builders of cruisevessels; STX Europe (Norway) also buildsferries, offshore supply vessels and navalships. Sietas (Germany) and Crist shipyard(Poland) are working on offshore installationvessels; Flensburger Schiffbau-Gesellschaft iscompleting the fourth ferry for Seatruck and

the company’s order book includes two heavy-duty freight ships. Nordic Yards is building thethird high-voltage DC converter offshoreplatform for Siemens.

An interesting prospect is opening up forLNG carriers. Experts at Deutsche Shipping,the shipping unit of Deutsche Bank, areexpecting significant demand in this area inthe medium-term future. The industry hasalready responded - Meyer-Werft will deliverits first LNGC to the Dutch shipownerAnthony Veder at the end of this year.

The business principle of the DamenShipyards Group, which specialises, among

other things, in tugs and platform supplyvessels, could be applied to the whole of theindustry - “We operate in every niche marketbecause if we see an opportunity to improve,innovate or invest, we take it.”

European companies will be stronglyrepresented at SMM 2012 - in terms of areabooked, Germany leads the way, followed bythe Netherlands, Norway and the UK. ThePeople’s Republic of China, worldshipbuilding nation number one, follows infifth position, having overtaken Denmark(sixth position), the organisers said. “SMM isas global in scope as the maritime industry

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itself,” said Bergleiter. Germany’s shipbuildingand offshore suppliers take a leading positionin the world, with some three quarters of theirtotal sales made outside their own country.

Energy-saving, cost-effective, environmentfriendly engineering is one of the new keyareas of the marine equipment industry,supplying to ships and offshore operators.German industry has a technological lead todefend here. “Developments of the propulsiontrain and in particular of the engine areexcellent examples of that,” said KlausDeleroi of MAN Diesel & Turbo. “Onlytechnology leaders with system expertise arecapable of optimising emission levels over thewhole of the life cycle of the engine.”

The same applies to the Asian companies.Exhibitors from China include a wide range ofcompanies, plus the two most importantshipbuilding associations CSIC and CSSC.The South Korean Shipbuilders’ AssociationKOSHIPA will also be present as will a largeSouth Korean pavilion with equipmentsuppliers. Major Japanese shipyards will bepresent, together with the Japan MarineEquipment Association JSMEA.

Retrofitting (refitting) is also gaining inimportance. For example, operation in ECAsis a key reason for using LNG propulsionsystems and also for retrofitting scrubbersystems to remove emissions from exhaustgas. And from 2016 onwards, followingmajority ratification of the ballast waterconvention, its rules could be applicable tonearly the whole of the world’s merchant fleet– an enormous market.

“A scrubber, including its installation, costsseveral million (dollars) and the cost of aballast water treatment plant can also go intoseven figures,” said Rüdiger Pallentin,managing director of Lloyd Werft,Bremerhaven. Equipment suppliers such as

MWB, Alfa Laval, Mahle and RWO presenttheir latest solutions in this area.

Tanker Operator has put together a snapshotof just a few of the exhibitors in strictalphabetical order.

ABB is marketing its energy managementsystem EMMA, aimed at maximising vesselefficiency. “The system is expected to pay foritself in less than a year at today’s fuel pricelevels,” said Mikko Lepistö, responsible foradvisory systems within ABB’s vesselinformation and control division (VICO).“Industrial experience and on board tests showthat the system can help our customers tomake significant fuel savings and thus toreduce emissions.”

Admiralty will host the next series ofdigital integration workshops at SMM. Theworkshops, which are free to attend, helpshipping managers effectively plan for theintegration of digital technology into bridgeoperations to meet the IMO mandatorycarriage of ECDIS legislation that came intoforce on 1st July 2012.

They will take place on first floor of HallB6, in room B6.1 on 4th – 7th September2012. Attendance is free, but spaces arelimited and anyone wishing to attend shouldregister online.

The workshops have been developed inconjunction with Capt Paul Hailwood, anECDIS and integrated bridge operationsexpert. They will and provide a simple, step-by-step process to support the planning anddelivery of compliance with the mandatorycarriage of ECDIS.

Following on from the start of the ECDISmandate at the beginning of July, shippingcompanies must be planning andimplementing digital navigation, said CaptHailwood; “Many companies underestimatehow long the transition to digital navigation

will take. It’s crucial that they make everyeffort to fully understand what ECDIScompliance requires. I’ve worked with manycompanies where the process has taken twiceas long as first thought, resulting in a varietyof operational issues.

“To avoid these problems shippingcompanies need definitive answers about theintegration process to enable them to prepareeffectively. The Admiralty workshops aredesigned to be the definitive resource to setthem on the right course,” he concluded.

Ian Moncrieff CBE , UKHO and AdmiraltyCEO, said: “The integration of digitalnavigation into bridge operations is a hugestep forward for the industry, deliveringimproved safety and efficiency. However,these benefits will not come automatically;they require the strategic implementation of arange of technologies and processes alongsidehighly focused and competent operationalexecution. The digital integration workshopswe’re delivering at SMM Hamburg 2012 andaround the world this year are designed toequip shipping companies with the knowledgeand skills they need to embrace the digitalfuture of navigation.”

Following SMM Hamburg 2012, theworkshops will also be held in London on24th September, details to follow and Dubai,UAE on 27th-29th November 2012.Additional dates will also be announced.

Alfa Laval will be showcasing a wide rangeof solutions designed to boost efficiency andreduce operating costs.

This year’s SMM will be the launch pad forthree new products. PureSOx introduces cost-effective exhaust gas cleaning. PureDryintroduces waste fuel recovery and a paradigmshift in separator design. The widetemperature and pressure range of theAlfaNova fusion-bonded plate heat exchanger

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meets the demanding applications set bytoday’s modern fleet, the company claimed.� PureSOx exhaust gas cleaning system -

Is your ship or fleet prepared for 1st January 2015? If not, it’s time to look at your options. PureSOx from Alfa Laval reduces harmful emissions by scrubbing sulphur from the exhaust gas of vessels operating on HFO. It is a low-cost solution compared to running on low sulphur MGO.PureSOx is a hybrid system that runs in either seawater or freshwater mode. It is also the largest system currently in operation (21 MW).

� PureDry -The PureDry waste oil treatment system dries up waste oil streams on board, signalling a paradigm shift in separator design. PureDry recovers fuel oil from a dedicated waste fuel oil collection tank andreturns it to the bunker tank for reuse after normal treatment. For the shipowner, it means a reduction of up to 2% in the total volume of fuel oil consumed – and a corresponding reduction in the ship’s fuel bill.

� AlfaNova fusion-bonded plate heat exchanger -Newly introduced to Alfa Laval’s marine portfolio, AlfaNova offers a working range temperature between -196 deg C to +550 deg C. Constructed completely in stainless steel it can be used for wide range of aggressive media. Among these applications are LPG/E re-liquification including ammonia and also in LNG fuel duties. This is made possible by the company’s patented active fusion bonding technology.

� PureBilge 5 ppm DNV Clean Design -PureBilge is the first system to obtain the new 5 ppm DNV type approval certificate for 5,000 l/h. And with its tamper-proof BlueBox data recorder, which locks in critical data and captures the whole sampling line, performance is a matter of total confidence.

� PureBallast 2.0 -Reliability, compatibility and convenience are essential considerations when selecting a ballast water treatment solution. That’s why more and more shipowners are opting for Pure Ballast 2.0. It’s not about buying equipment – it’s about an expert partnership, and investing wisely in the know-how, resources and support that comewith it.

� Aalborg boiler series -Alfa Laval Aalborg boilers combine high performance and reliability with

environmental focus, ensuring superior quality from quotation and documentation to manufacturing and plant commissioning.The TCi series of oil-fired boilers offer significant improvements in efficiency. They feature an Intelligent Turbo Clean (TCi) system, enabling them to self-clean without water washing and subsequent effluent.

� Waste heat recovery -Alfa Laval’s Aalborg waste heat recovery systems deliver documented fuel savings and cut COx emissions by up to 12%. Theymaximise profitability and safety while helping you meet environmental regulations.

� Thermal fluid systems -Alfa Laval Aalborg thermal fluid systems are an alternative to steam boilers as a heat supply for separators, cargo heaters, and other heat consumers. Supplied as completeand fully engineered systems, they feature an optional energy management system thatreduces unnecessary heating and emissions by comparing the system’s available heat with the actual requirements of the heat consumer.

� Inert gas systems -Alfa Laval Aalborg inert gas systems produce quality, soot-free inert gas, thanks in part to the Ultramizing combustion system that prevents soot formation even atpartial load conditions. Easy to operate andmaintain, they allow quick and accurate configuration and offer a low total cost of ownership.

� S separator 9 series -

The latest version of Alfa Laval’s ground-breaking S separator combines proven benefits like our Alcap technology with a wide range of technical innovations. The result is lower energy consumption, lower oil losses, lower lifecycle cost, and smaller footprint.

There will also be more attractions on displayin addition to the highlights above. Visitorswill also be able to experience: � AQUA freshwater generator.� Fuel conditioning module (FCM) and

advanced cooling system (ACS). � Filters.� Marine boilers and heat exchangers.� An extended service network created by the

union of Alfa Laval and Aalborg Industries.Alphatron will introduce a marine fibre opticheading sensor at SMM.

With more than 800 Alphaminicoursetraditional gimbal gyro compasses in service,Alphatron Marine is introducing theAlphafibercourse to the marine industry. Itcontains a fibre optic and 1Xblue core as asensor reference.

It is a small light weight fast setting device,fully approved by class and MEDwheelmarked.

The fibre gyro compass is directlyconnectable to a variety of ancillaries via agalvanically isolated docking station. Amongthe ancillaries are bearing repeaters, OSVapproved interswitches, digital repeaters,repeater stands and brackets.

Due to its extreme robustness and size aswell as the output of roll and pitch informationas second signal, the Alphafibercourse is

Alphatron’s marine fibre optic heading sensor - Alphafibercourse.



targeting the high end market of the marineindustry, including chemical tankers.

For the past 15 years, BASS has providedsoftware to streamline and automate shipoperation processes, one by one, forming anintegrated system. The company’s latestrelease - BASSnet 2.8 - has been receivinggood feedbacks from clients worldwide

Bass now has more than 100 customersworldwide, including Stolt Tankers, inexperiencing how its modular software canstreamline a business. It enables a shippingcompany to build one, integrated solutioncovering all main areas of maritimeoperations.

The modules include:� Maintenance. � Projects.� Claims management. � Procurement.� Contract management.� Operations. � Document management. � Safety management. � Vetting. � Risk management. � Self assessment (TMSA).

� Reviews and improvements.� Crewing/HR management. � Payroll.� Financials.� Report generator.� KPI dashboard.With origins in Norwegian shipping, BASSSoftware can provide 24/ 7 global support tocustomers.

Special steering gear is represented by therecord breaking 93 sq m TLKSR system fromBecker Marine Systems. In addition, theBecker Mewis Duct, a nozzle fitted in front ofthe propeller with an integrated fin system,increases propeller efficiency in loadedcondition by up to 6%, the company claimed.

Colfax Fluid Handling will exhibit anupgraded product – Allmind - at SMM.

Colfax’s Allmind pump upgrade reducestotal cost of ownership through diagnosticcapability and variable speed drive control, thecompany said.

Despite the best intentions of shoresidesuperintendents under constant pressure toreduce operational expenses and equipmentdowntime, the best pump systems are at riskdue to a lack of diagnostic information and

sophisticated control systems. Allmind provides an effective solution to

this challenge, Colfax said. As an intelligentsystem it monitors all types of pumps in avessel and can help reduce expenses for day-to-day operations, maintenance, energy andspare parts costs.

At the same time, Allmind helps to improveoperational safety. The concept of Allmindwas developed from a single leakage controldevice to become an intelligent conditionmonitoring and variable speed control unit. Energy costs account for 85% of the total costof ownership for ballast and cooling pumps,demonstrating the importance of assessingtotal cost of ownership rather than basingpurchasing decisions purely on initial cost.“The concept is just as relevantly applied toupgrade decisions”, said Christian Martin,director, product management commercialmarine at Colfax. This means keeping abreastof technology and, as is often the case withpumps, recognising when old practices mustmake way for the new to achieve greateroperational efficiency and profitability.

“We have the technology to reduce theenergy consumed in pumping operations by up

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to 50% simply by enabling variable speedoperation with Allmind,” said Martin.“Moreover, add intelligent diagnostics asprovided by Allmind and reliability goes upand maintenance costs go down –dramatically.”

Allmind is comprised of interchangeablemodules, giving the system the flexibilityneeded to adapt to highly individualisedprocesses. The system offers the ability tohandle everything from relatively simplecondition monitoring to sophisticatedmonitoring and control activities involvingmultiple pumps- all with a single unit.

The system can monitor pressure,temperature, leakage, vibration and output, aswell as activate PID controllers. Each pumpcan be individually equipped with speedcontrol. The system will store all sensor valuesand makes them available for evaluationpurposes.

Conrac will be showing the following newproducts at SMM.

New additions to the marine panel computerseries are fully integrated solutions inwidescreen format featuring diagonals of 13.3inch and 7 inch with touch screen. Speciallydesigned for marine applications, thesePanelPCs are ideally suited for use in shipautomation and control applications.

In addition, the latest versions of thewideECDIS marine panel computers, includesSysMon, a system monitoring application,now with a special ECDIS calibrationfunction.

Conrac will also be show casing one of theOEM products, a wideECDS monitor inportrait format, specially developed for riverradar applications.

Danfoss will be exhibiting its marineportfolio, including the frequency converter-family that holds eight marine approvals. Avariety of sensors, such as the cylinder

pressure sensor that reduces fuel consumptionand increases engine life, will also be shown.

Frequency converter: compact size andmarine approved - the more compact D-frameconstruction design of the VLT frequencyconverter is now fully available in the 90 to250 KW output range. VLT frequencyconverters are available in protection classesup to IP 66, making the products ideal for therefurbishment of older vessels, the companysaid.

Danfoss VLT frequency converters formarine applications possibly hold the highestnumber of class certificates on the markettoday and are certified by a total of eightauthorities within the maritime and offshoresectors, including DNV, RINA, LR, CCI andothers.

Depending on the output range, the newcompact frame size can be up to 68% smallerthan the former frames. Additional options areavailable for these devices on the power inputside, from fuses and load circuit breakers toelectric contactors.

These devices save a large amount ofcabinet space. The greatest savings areachieved by the 250 KW VLT frequencyconverters. They require only 0.14 cu m,compared to the 0.450 cu m formerly needed.Danfoss converters remain among the smallestproducts in their performance classes and areavailable in a wide power range designed forall applications, marine and others, thecompany said.

The frequency converters have a largenumber of functions developed to meet thediverse needs of all kinds of applications. It isthe perfect match for pumps, fans andcompressors, eg in vessels that are fitted withincreasingly sophisticated solutions. Thepower range is from 1.1 to 1,400 kW withvoltage ranges 200, 380 – 480/500 V, 525 –600 V and 690 V. The product is available up

to protection class IP66, depending on theversion.

Cylinder pressure sensor – reduces fuelconsumption - the new pressure sensor allows2-stroke and 4-stroke engines to operate with ahigher output than is the case today. Ownersbenefit from reduced fuel consumption, lowermaintenance costs as well as longer operatinglife, Danfoss claimed.

The MBS 1800 pressure sensor is availablein two versions an integrated sensor andamplifier in one housing and in-line sensorand chare amplifier firmly but flexiblyconnected by a high performance cable.

The sensor offers a variety of significantbenefits, including pressure ranges up to 250bar, overload pressure up to 300 bar,temperature range up to 350 deg C, responsefrequency 20 kHz, natural frequency > 90kHz. The sensor is designed for 20,000operating hours in severe conditions.

The new MBS 1800 cylinder pressure offersthe possibility to register what happens in thecombustion chamber while the engine isrunning. Knowing exactly what happens insidethe cylinder provides the possibility to reduceemissions and reduce fuel consumption, aswell as reduce maintenance costs, Danfosssaid.

GEA Westfalia Separator Group will beintroducing the BallastMaster ultraV.

Increasing demands for cost and resourceefficiency in ship operations and the growingimportance of sustainable management haveresulted in repeated critical examination of theindividual material and process cycles byshipping companies and shipbuilders in recentyears.

Until now, ballast water on board hasgenerally been treated with the use ofchemicals, resulting in correspondingdetrimental effects for the environment, aswell as material costs.

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At SMM 2012, with the new BallastMasterultraV solution, GEA Westfalia SeparatorGroup demonstrates that with this solution, thenecessary cleaning processes can be completedentirely without the use of chemicals andsolely on the basis of filtration and irradiationwith UV-C light. As ultrasound is used for theself-cleaning of the lamps, no disinfection by-products occur.

The BallastMaster ultraV has a modularstructure and is therefore suited both for newships and for retrofitting. The system hasalready been certified under IMO regulationsand is being presented for the first time atSMM.

According to Sven Jadzinski, senior productmanager, talking with Tanker Operator, thetype approval for BallastMaster ultraV wasissued by BSH on 19th December 2011.

He explained that the smallest module has acapacity from 160 cu m per hour up to 250 cum per hour. GEA is also working on an up-scaled unit, which can handle up to 500 cu mper hour capacities, Jadzinski said. He alsosaid that the GEA BallastMaster ultraV issuitable for capacities up to 1,500 cu m perhour.

If a larger foot print is needed, powerGEA Westfalia’s BallastMaster System.



consumption and installation cost might be anissue. Usually for throughput capacities ofaround 3,000 cu m per hour, ie for largevessels, different technology is recommended,for example electrolysis, Jadzinksi explained.He also said that GEA is currently engaged ingetting this system certified at a test facility inDenmark, which should be completed by thesecond half of 2013.

Experts estimate that the costs of systemfailures and downtimes within one life cyclecould be three to four times greater than thecorresponding costs of maintenance and repair.

Particularly in ship operations, the economicimportance of system availability cannot beoverestimated. As a result, GEA WestfaliaSeparator Group is bringing its new, holisticserv&care service concept to SMM 2012.

serv&care makes service not only moreflexible and adaptable than before but alsocapable of learning. Maintenance measures areno longer bound by rigid concepts and firmlydefined packages but rather form one elementof individually co-ordinated serviceagreements. In all parameters, these areprecisely geared to the individual requirementsof the customer. The central benefit for thecustomer: maximum system availability withabsolute budget security, the companyclaimed.

Life saving service concern Lalizas has setup a webpage (www.lalizas.com) where localservice stations for life jackets, immersionsuits, liferafts and emergency evacuationbreathing devices (EEBD), can be found.

The country of interest can be selectedfollowed by the town and products of interest.

Go to www.lalizas.com/service.php to visitLalizas’ worldwide network of servicestations.

The German navigation systemmanufacturer Raytheon Anschütz will showits navigation systems – from the gyrocompass Anschütz Standard 22 through thenew generation of manual and automaticsteering control systems to the Synapsisintegrated bridge and navigation system (INS).

Synapsis is claimed to be the world’s firstnavigation system, which has been typeapproved according to IMO’s new INSPerformance Standard. The INS’ key elementsare new multi-functional workstations, whichuse standardised, ultra-compact long-life PCsand a standard software framework to allowcustomising bridge systems for any ship’srequirements.

Thus, the newly developed Synapsisintegration platform not only controls allconfigurations, functional tasks and displaysof the workstations but also provides

flexibility for upgrades and extensions. It alsofully integrates with Anschütz gyrocompasses, autopilots and manual steeringsystems, the company said.

The new steering gear control systems,NautoSteer AS and NautoPilot 5000, havebeen developed to set high standards of safetyand precision in steering, but also to contributeto a significant decrease in fuel consumptionand emissions.

NautoSteer AS steering control series isbased on CAN-bus technology and providesadvanced functions to set the standard forhighest safety in steering. Its functions coverintegrated steering failure and wire-breakmonitoring and a simplified steering modeselector switch, which separates anindependent ‘Direct NFU’ non-follow-upsteering position from a ‘Main’ follow-upsteering position. The takeover of steeringcontrol is possible from any steering position.

NautoPilot 5000 features an integratedheading and rudder plotter on its large colourdisplay, which instantaneously indicates thesteering performance of the autopilot due tothe effects of changes to parameter settings,such as rudder, counter rudder and yawing.

The NP 5000 can also be operated in eco-mode to reduce sensitivity to periodicalyawing movements. Subsequently, less rudderaction is required, which leads to lower levelsof speed reduction and thus less fuelconsumption. If high precision in automaticsteering is needed, the NP 5000 autopilotoffers a new course control mode and a high-precision controller to maintain the precisesteering performance.

In addition to the NP 5000, RaytheonAnschütz addresses the requirements for fuel-efficient ship systems with the development of

new features that help optimising routeplanning on ECDIS. As an example, theSynapsis ECDIS has been enhanced with anadvanced automatic route planning function tocalculate the shortest route between twodestinations.

The ECDIS also integrates weather data toaddress the impact of wind and waves, swelland currents on fuel consumption, operatingcosts and just-in-time arrivals. Together withthe autopilot, the fuel saving potential isestimated at 2-4%.

A live demonstration of these fuel savingcapabilities is also a highlight of the RaytheonAnschütz exhibit – ‘How modern navigationsystems can help reduce emissions and savefuel.’

Dr Meeno Schrader of weather forecastprovider WetterWelt and Andreas Lentfer ashead of business development at RaytheonAnschütz will give a hands-on demonstrationon Synapsis ECDIS and NP 5000 onWednesday, 5th September, from 10-12 am,and on Thursday, 6th September, from 10 amto 1 pm at the Raytheon Anschütz booth 304in Hall B6.

Safebridge will be highlighting its onlineECDIS familiarisation courses at SMM.

On show will be the full working version ofthe ECDIS familiarisation course linked viathe web to the Safebridge online server andthe OEMs’ own software.

Having released the first course coveringtype-specific training on the NorthropGrumman Sperry Marine VisionMaster FT5 inMay, Safebridge is now finalising coursewarefor its other manufacturing partners, whichinclude Raytheon Anschütz, Transas Marine,JRC, Imtech, ChartWorld, Sam Electronicsand 7Cs.

Raytheon Anschütz INS.



The Safebridge courses are true simulationconducted remotely and not using CDs orDVDs, which allow the student to study fromanywhere with a good Internet connection.The content represents some 16 hours of studyand re-teaches the competencies of the IMO1.27 generic training, which is a pre-requisite,on the actual equipment display and controlsof the ECDIS equipment concerned.

Claimed to be unique to the Safebridgetraining solution is the ‘FreePlay’ modewithout any tutorial, which allows the traineeto practice and gain confidence by using andexperimenting with the live ECDIS system. Toallow this, and the repeating of lessons ifrequired, the courses allow a three-weekwindow from first login to complete all thelessons.

Upon completion of the learning content,the ‘TestMe’ mode is activated and aftersuccessful completion of the test, amanufacturer-specific certificate will beissued.

SAM Electronics and its associate L-3companies will feature extensive ranges ofnext-generation shipmanagement systems andsensors for automation, communications,navigation, positioning, propulsion, energydistribution and supplementary applications.

Highlights include live demonstrations ofthe latest NACOS Platinum series of scalablenavigation, automation and control systemsfeaturing standardised components andoperating networks.

Displays will be complemented by a

Rheinmetall Defence bridge simulatorfeaturing NACOS-type consoles, as well as anew integrated Platinum dynamic positioningand control system developed by L-3 DynamicPositioning & Control Systems together withSAM and Lyngsø Marine. Also featured, asan integral part of demonstrations, will be athree-console L-3 Valmarine Valmaticautomation assembly.

New support exhibits for the Platinumsystems consist of a remote service softwarepackage for reducing service costs via anintegrated service router and for shore-basedfleet control operations, a centralised datamonitoring facility for evaluating keyperformance indicators - Fleetpilot.

Other main equipment highlights includenew compliance-ready products comprising anEcdisPilot basic unit for simplified retrofitapplications, a bridge navigational watchalarm system (BNWAS) and a modular ballastwater treatment system designed by Techcrossof South Korea.

Supplementary displays cover SAM’spropulsion control and shaft alternatorsystems. Associated company exhibits includeJ-3 Jovatlas UPS systems, Funa Internationalentertainment and lighting equipment andsmart sensor measurement systems fromAPSS, Italy.

The Finnish engine builder Wärtsilä ischanging its two-stroke engine programmeover to long-stroke engines.

These are claimed to use up to 10% less fuelthan conventional engines and run at relatively

low engine speeds, allowing the use of largerpropellers, with corresponding efficiencybenefits.

New technology to deter pirates is a keytopic for discussion at this year’s SMMconference in Hamburg.

Westmark BV’s patented P-trap anti-boarding device provides shipowners with anon-lethal barrier to harden vessels againstpirate attacks.

The P-trap will be displayed enablingvisitors to view a scale model of the solution,as well as a video, providing test results fromnavy, coastguard and rescue services atWestmark and Vecom booths.

An additional Westmark alliance stand islocated in B8 (dedicated to marine defenceand safety), in which this section providesshipowners with additional security strategies.

Netherlands-based Westmark designed theP-trap, an engine blocking system, whichcreates a security zone around the perimeter ofthe ship and prevents other vessels fromapproaching too closely in an attempt toboard.

Side booms extend from the bow on bothsides of the ship, carrying a set of long thinlines that are dragged just below the watersurface, thus creating a barrier along the entirelength of the ship.

A pirate skiff or whaler entering the securityzone will run into the lines, which aredesigned to disable the engine, leaving thepirate skiff inoperable. The P-trap is designedto continuously protect against multiple

SAM Electronics NACOS INS.



simultaneous attacks day and night and doesnot require crew involvement once deployedbefore entering high risk areas.

Westmark has created several P-trapsystems, designed to fit most seagoing vessels.“The P-trap concept is as simple as lockingyour doors and windows before going to bedat night. It’s practical and it makes sense,” saidLodewijk Westerbeek van Eerten, creator of P-trap.

At this year’s SMM Hamburg, WilhelmsenShips Service’s (WSS) German subsidiarywill be celebrating its 40th birthday.

“In a global market that is still getting backon its’ feet, we can contribute our continuedsuccess to a combination of excellent customerservice which consistently exceeds expectation– and a dedicated team made up ofexperienced staff and young, enthusiasticnewcomers to the industry”, said WSSGermany’s general manager Ove Loos.

From its HQ in Sittensen, 45 km southwestof Hamburg, WSS Germany has expandedconsiderably over the past 40 years, fromsmall beginnings in 1972 when it operated asUnitor GmbH to its status today as a nationalmarket leader in the supply of marinechemicals, marine products and safetyservices, staffed by a team that has increasedtenfold.

As he looks towards SMM, Loos said that

he understood the importance of focusing onthe bigger picture, despite a somewhat gloomyoutlook for the industry.

“Due to the large number of shippingcompanies based in Germany, we have alwaysspecialised in the business with thosecustomers and at a port level, we are offeringfirst class service through well trained andhighly dedicated, motivated and experiencedemployees.

“Of course, we are also very muchdependent on the development of the globaleconomy, particularly when we consider thatGermany is one of the world’s leading exportcountries. We currently offer the full range ofproduct supplies and technical services in allGerman ports in order to support ourcustomers to improve the operationalefficiency of their vessels,” he said.

In 2011, WSS Germany co-ordinated 17,300deliveries and services to 3,500 German clientvessels in ports worldwide through WSS’customer service centre and carried out morethan 7,300 deliveries and services to 2,800international customer vessels in Germanports.

WSS Germany now operates its own liferaftexchange (LRE); fire, rescue and safety (FRS)service station and is providing ships agencyservices via an office in Brunsbuettel at theentrance to the Kiel Canal and through sub-

agents in all other German ports.Loos said; “For the future, we are perfectly

placed to align the business with the needs ofthe customer to provide an extended range ofservices and strengthen geographical coverageto extend to all of Germany’s main ports.

“We are also planning to increase our LREcapacity to provide more space for a newtechnical service workshop. We are confidentthat we have a sound base for further growthand have initiated the right steps to beprepared for the future,” he said.

WSS Germany will showcase a number ofproducts and services at SMM Hamburg,giving visitors the chance to talk to theproduct experts on a one to one basis on arange of topics, from the newest weldingmachine, to WSS’s new active solutionsmarine chemicals offer, safety services andships agency capabilities.

Westmark P-Trap.

Copies of Tanker Operator Magazinewill be available on Stand B1.OG/400.Editor Ian Cochran will be inattendance and can be contacted on+44 (0) 7748144265, or leave abusiness card on the stand.

Tanker Operator Magazine

TO

Trimming the fatAs tanker owners and operators look to achieve efficiency savings and streamlineoperations, Neil Godfrey, GAC’s Group sales director - shipping, explains how the

modern ship agent is well placed to help reduce unnecessary costs.


INDUSTRY - COMMERCIAL OPERATIONS

Ship agents have always been animportant ally for tanker ownersand operators, ensuring that theneeds of each vessel and each port

call are effectively managed and servicesefficiently delivered. In recent years, we havewitnessed an important diversification andexpansion of the services offered by globalship agents, including GAC. More than everbefore, owners need a ship agent who canstreamline services and provide completesolutions to help deliver time and costefficiencies.

A ship agent must have the localknowledge, a global network and the depth ofexpertise to respond to the changing needs ofthe tanker industry. For GAC, combining shipagency with additional services including hubagency, crew welfare, spares logistics, shipsupply services, bunkering, weather routingand more, ensures that their customers haveoptimal opportunity to bundle servicestogether through a single supplier and savetime and money.

Market knowledgeThe ship agent in tanker operations must havea sound understanding of global markets andan awareness of the challenges faced by theircustomers. At a time when the tanker industryis suffering from record high bunker prices, anoversupply of tonnage, low freights, mutedgrowth in world oil demand and the significantcosts of anti-sea crime efforts, the margins forerror, loss or delay are slimmer than ever andthe commercial consequences all the moresevere. Under these challenging conditions,owners and operators can ill afford to entrusttheir vessels and cargoes to under-equipped, orunder-experienced agents.

Local expertiseThis is particularly true when it comes toensuring regulatory compliance and the correcthandling of liquid bulk and gas cargoes. Here,local knowledge is key. Regulations can differbetween countries and the penalties for failingto comply are a cost that cannot be afforded.While the Federation of National Associationsof Ship Brokers and Agents (FONASBA) setspractice guidelines on a global level, regional

member bodies can stipulate their own qualityobjectives. This means that service standardsmay vary widely from region to region, oreven port to port.

Ensuring that all of the relevant authoritiesand organisations are engaged, the paperworkfiled correctly, communication with all partiesis effective and measures put in place toensure compliance at each port call can betime consuming and complicated. Appointingexperienced ship agents who are well-versedin dealing with the processes and have goodworking relationships with the local authoritiesto manage these responsibilities can helpmitigate risk, as well as save time and money.

Of course, it is fundamental that just asowners and operators have to adjust theirbusiness practices to changing regulations, sotoo must ship agents have the necessaryexpertise and resources to adapt to meetchanging needs.

For example, the China Maritime SafetyAgency (MSA) implemented new vessel-source anti-pollution regulations effective 1stMarch, 2012 whereby owners and operators ofvessels carrying potential polluting cargoesmust work with a Government-approved ShipPollution Response Organisation (SPRO) toestablish and implement a detailed shippollution response regime before entering,leaving or starting operations in port. As partof its agency service package in mainlandChina, GAC has set up a pollution controlservices team composed of master mariners tohelp guide shipowners through thesemeasures, cutting red tape and ensuring thatthe master and crew can focus on operationalresponsibilities. It is the obligation of the shipagent to work with owners and operators toensure adherence to all regulations from thosestipulated in the International Ship and PortFacility Security Code (ISPS) to comply withthe Emission Control Areas (ECA).

Global scopeOf course, the modern ship agent should addvalue beyond port limits. Just as an agentshould have local expertise, the ability todeliver services globally is central to ensuringefficiency savings can be made. As a shipping,logistics and marine services provider, GAC

has an expansive portfolio of servicesdelivered from a network of more than 300offices worldwide.

Package offeringFrom global trading of bunker fuels to safeand efficient ship-to-ship transfers, weatherrouting and vessel protection, GAC canprovide a package of services tailored to eachvoyage. The benefit of using a global agent isthat all of these needs can be discussed, co-ordinated, managed and billed by a singleorganisation, offering a ‘total arrangement’,planned and scheduled before a vesselcommences a voyage.

The ability of ship agents to deliver bothbreadth of services and specific expertise isbecoming increasingly important as a meansof limiting delays and ensuringprofessionalism and compliance. As animportant ally, the ship agent’s role is to helpdrive out costs and to work with tanker ownersand operators to overcome the challenges theyface. TO

GAC’s Neil Godfrey.



Evans said that the main trend inrecent times was an increase inspeed and consumption claims, assome charterers look to try claw

money back from owners/managers byeffectively trimming the rates payable. This isparticularly common in relation to long termperiod fixtures, where the rates payable wereagreed prior to the steep falls in the market.

He stressed the importance forowners/managers of paying careful attention tothe terms of the speed and consumptionwarranties in their charterparties, as theirobligations are defined solely by what is in theclause and what appear on their face to be the‘usual terms’ can often produce surprisingoutcomes when viewed under the microscopeof arbitration proceedings. One particular areaof dispute in recent times has been the role ofcharterers’ routing companies, with charterersoften seeking to bind owners/managers to theirfindings.

However, Evans said that owners/managersshould also be reassured that they will not facespeed claims if charterers order slow steamingand that arbitrators will almost always takeinto account navigational issues, which mayhave affected a vessel’s performance, inparticular where they are ex mariners.

Turning to the aftermath of piracy cases,especially the increased in tanker hijackingsseen off West Africa recently where the cargowas stolen, Evans warned that owners need tobe aware that claims maybe pursued by cargointerests on the basis of the vessel’s‘unseaworthiness’ and that in these stolencargo cases claims usually amount to severalmillion dollars.

He said that the pirates operating off WestAfrica appear to be very professional in thatthey know which of the crew they needed forship-to-ship transfer operations and theyusually disable the SSAS shortly after comingon board and remove the vessel’s satellitephone and VDR when they leave to try toremove the evidence.

Evans advised owners and operatorsentering into timecharters to pay closeattention to the War Risk clause to ensure thatthis covered the risk of attacks by pirates asthe precise terms will vary under differentcharter forms. For example, the printed termsof the Shelltime 4 form do not cover attacksby pirates, whereas under the Conwartime2004 clause, ‘acts of piracy’ will be includedas a War Risk (and the level of risk whichmust exist before owners can rely on theclause is relatively low).

The position is more difficult in relation tovoyage charters, or timecharter trips providingfor discharge at the West African ports (ormore often by way of STS off those ports), asin these circumstances owners have expresslyagreed to send their ship to area where there isa risk of piracy. In these cases, owners willonly be able to rely on the War Risk clause ifthey can show that the risk of an attack hasincreased in the period since they entered intothe charterparty.

Common senseEvans advised owners/managers to take allreasonable precautions and to use commonsense when their vessels are due to call atWest African ports, or transit off West Africa.While Best Management Practice 4 (BMP4) isdesigned for the Gulf of Aden/Indian OceanHigh Risk Areas (HRAs), therecommendations should be followed insofaras they are relevant to discharge operations offWest Africa. This would include the provisionof vessels with the recommended anti-piracyequipment (razor wire, dummies etc) andensuring that their officers and crews have theappropriate training and drills before thevoyages.

Evans also said that he had also encounteredproblems with armed guards being on boardtankers. While owners have been keen to putthem on board their vessels, charterers arewary of using armed guards, especially if aparticular vessel is loaded with a cargo, such

as gasoil. He thought that another problem arising out

of today’s economic difficulties was the easeof which courts granted beleaguered owners’protection, such as Chapter XI. The US Courtshad been very quick to assume jurisdiction insuch cases and the granting of Chapter XIprotection could have a significant impact onthe owners’ relationship with theircounterparties – for example, it might preventthe arrest of the owners’ ships by partiesseeking security for claims and could alsoprevent parties from cancelling their contracts.

Another related theme Evans identified wasthat the banks appeared to be increasinglywilling to pull the plug on cash-strappedowners much more quickly, partly becausethey want to avoid the risk of ownersobtaining Chapter XI protection.

As for the problem of Time Bars, whichhave received publicity recently with theannouncement of a system offered by DA-Desk to take on the problem for operators (seepage 37), Evans advised that the easiest wayto avoid difficulties was to include all of thedocuments, which might conceivably berelevant to a claim in the package supplied tocharterers.

Owners and operators should also be aliveto the documentary requirements of theircharterparties during operations, for examplewhere the terms require letters of protest to beissued and then included in the package ofdocuments for charterers.

Another technical point, which should bechecked is that many charterers specify aparticular address, fax number or, morecommonly, email address to which claimsmust be sent and such provisions must becomplied with. Owners should also take carewhen notifying charterers of claims viabrokers, as Evans has experience of a numberof cases in recent years where claims havebeen time-barred because brokers have failedto pass on all of the required documents.

Be aware of C/Pclause wording

In this article, Tanker Operator looks at the general trends in disputes undercharterparties and bills of lading in the tanker sector, with Cristan Evans,

a Senior Associate in the marine and international trade team of law firm Stephenson Harwood.

TO

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Clarifying liberty inCONWARTIME

clauseOn 11th July 2012, Teare J handed down a judgment that is significant for shipowners,

timecharterers and their legal advisors when dealing with the liberty in theCONWARTIME Clause to reject a voyage order because of the exposure to

War Risks, including the risk of piracy*

Since the Court of Appeal decisionin the Product Star No 2 (ProductStar No 2 [1993] 2 Lloyd’s Rep397), it has often been argued that

there should be a twofold test: the first iswhether it appears in the owners’ reasonablejudgement that there is a real likelihood ofexposure to War Risks; the second is whetherthere has been a material increase in that riskbetween the date of the charterparty and thedate of the voyage order.

Analysis of the first part is by no means aneasy matter. The second part adds a layer ofcomplexity and gives rise to potentialinconsistencies in a chain of charters, wherethere are significant differences between thedates of the respective charters.

Teare J’s judgment will be welcomedbecause it appears to remove the need for thesecond part of the test by confining thejudgment in the Product Star to its specificfacts and rejecting it as a judgment of generalapplication.

The case before Teare J concerned a chain

of three materially back to back timechartersfor Paiwan Wisdom. Each charter containedthe CONWARTIME 2004 Clause which states:“The vessel, unless the written consent of theowners be first obtained, shall not be orderedto ... any port, place, area or zone ... where itappears that the vessel ... in the reasonablejudgement of the ... owners, may be ...exposed to War Risks ...”

The sub-sub charterparty was concluded on25th March 2010. On 23rd April 2010, thesub-sub charterers gave an order for a ladenvoyage from Hoping, Taiwan to Mombasa,Kenya. The order was relayed up the chain ofcharters to the head owners. They rejected it.The basis for the rejection (which was relayeddown the chain) was that it exposed the crewto the risk of piracy. The owners invoked theliberty in the CONWARTIME Clause, whichcovers acts of piracy as a war risk. Thisresulted in a dispute under all three chartersand the matter was referred to arbitration.

Part of the charterers’ case in arbitration wasthat the owners were precluded from relying

on the liberty in the CONWARTIME to refusethe order because there had been no materialincrease in the risk associated with the voyageinstructions in question between the date ofthe charterparty and the date of theinstructions.

The charterers relied upon the Court ofAppeal’s judgment in the Product Star. Thispoint was determined as a preliminary issue.In a majority award, the tribunal distinguishedthe Product Star on its facts and disagreed thatit was authority for the proposition that theliberty in the CONWARTIME can never beinvoked unless the War Risks in question havealtered in kind or increased significantly fromthe risks existing at the time of the charter.The conclusion was that there was norequirement for such an increase in risk.

The charterers were granted permission toappeal the relevant question of law underSection 69 of the Arbitration Act 1996.

The appealBefore Teare J, the charterers argued that the

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principles of the Product Star judgmentrequired the dangers presented by War Risksat the time of the order to be greater than thoseexisting at the date of the charterparty.

They argued that a War Risks clause (suchas CONWARTIME) must be read in light ofthe charterparty as a whole and in its factualmatrix, with the burden being upon the ownersto show that they are entitled to invoke it.

They pointed to the provisions of Clause 50of the charterparty, which required the vesselto trade within Institute Warranty Limits, andexpressly excluded, allowed and/or imposedconditions on trade into certain countries,ports or places, including a provision thatexpressly allowed the vessel to pass the Gulfof Aden, subject to H&M insuranceauthorisation.

The charterers argued that these provisionsindicated that the parties had given detailedthought to the risks of trading to places in EastAfrica and agreed only to exclude Eritrea,Ethiopia and Somalia, but not Kenya. On thatbasis, it was submitted that the risk of acts ofpiracy when trading to Kenya prevailing at thedate of the charterparty were allocated andpaid for by the charterers and the owners were

therefore not entitled to invoke theCONWARTIME provisions and refuse theorder to carry cargo to Mombasa.

They submitted that it would not makecommercial sense for trading to Kenya to bepermitted at the outset of the charter period,but for owners to be entitled to refuse to tradeto Kenya if, on the second day of the charterperiod, they were given instructions to gothere.

The owners’ response was that there is nosuggestion in the words of theCONWARTIME clause that it only applies towar risks that have escalated since the date ofthe charterparty. On their face, they onlyrequire that the owners form a reasonablejudgment that the vessel may be, or is likely tobe exposed to War Risks. There is nothing inthe clause which states that the word‘dangerous’ only encompasses new, orincreased dangers. Further, the Product Star isa materially different case both in respect ofthe factual matrix and the terms of thecharterparty, where the War Risk clause didnot have the same structure or wording as theCONWARTIME clause.

In particular, by contrast to the facts in the

Product Star, the charterers were not the state-owned carriers for the nation of Kenya. Thecharterparties were not entered into in order tofulfil COAs for the carriage of goods to orfrom Kenya. There was no discussion ofvoyages to/from Kenya when the charterpartywas negotiated and concluded. The result wasthat, although the charterparty was forworldwide trading, subject to specificexclusions and Kenya was not one of thoseexclusions, the owners had no reason to expectthe vessel to be ordered to Kenya; nor that thecharterers would insist on such a voyage beingconducted by a route to the north ofMadagascar.

In addition, there was no objective reason tosee the exclusion in Clause 50 in respect ofEritrea and Somalia to be related to piracyrisks at all. Along with Ethiopia, bothcountries had long been excluded under manytrading limits clauses because of long-standinginstability, resulting in internal strife in eachcountry, as well as on/off cross-borderconflicts between them.

These problems affected all three countrieslong before piracy became a concern in theregion, just as it did in many of the other



countries specifically excluded. Thesignificance of these exclusions was not thatthey indicated that the owners regarded theWar Risks (or other risks) current at the timeof the charterparty to be unacceptable, letalone that they gave specific thought to piracyas distinct from other War Risks. Ownerswanted these countries excluded irrespectiveof whether, or not they would be entitled torefuse orders under the CONWARTIMEclause, or other contractual provisions.

The judgmentTeare J rejected the charterers’ contention inrespect of Clause 50. While he accepted thatKenya was within Institute Warranty Limitsand was not an excluded country, theCONWARTIME clause provides that anowner may refuse to proceed to a place whichis dangerous on account of War Risks. It doesnot contain a requirement that the relevantWar Risks must have escalated since the dateof the charterparty.

The words ‘Passing Gulf of Aden alwaysallowed with H&M insurance authorisation’ inClause 50 indicated the owners’ agreement topass through the Gulf of Aden. The ownerswould therefore not be entitled to refuse,pursuant to the CONWARTIME clause, topass through the Gulf of Aden on account ofthere being a danger of an attack by pirates.That is because the CONWARTIME clausemust be read in the light of the charterparty asa whole, including Clause 50. Clause 50contains an express agreement to pass throughthe Gulf of Aden and so it would beinconsistent with that express agreement toconstrue the CONWARTIME clause in such away as to permit the owners to refuse to passthrough the Gulf of Aden.

The presence in the Gulf of Aden of navalforces and a convoy system explains why theowners agreed to pass through the Gulf ofAden. That agreement is no warrant forconstruing Clause 50 as an agreement by theowners that the vessel shall proceed to anyport, or place on the east coast of Africa (otherthan the excluded countries of Eritrea,Ethiopia and Somalia), where there is a risk ofpiracy but no naval forces or convoy system.

The charterers may direct that the vesselproceeds to Mombasa, but the owners haveliberty to refuse to proceed through the IndianOcean to Mombasa if, within the meaning ofthe CONWARTIME clause, there is a reallikelihood of the vessel being exposed to actsof piracy on such a route. TheCONWARTIME clause contains norequirement that any such likelihood shouldhave materially increased from the date of thecharterparty.

An important point of distinction betweenthe facts in the Paiwan Wisdom and theProduct Star is that the latter had a specificterm in its charterparty regarding the paymentof War Risk insurance by the charterers for thevery place to which the vessel was ordered.

In conclusion, the Paiwan Wisdom was nota case in which the owners had, by the termsof the charterparty construed in its factualcontext, accepted the risk of piracy in tradingto Mombasa, Kenya and they were inprinciple entitled to exercise the liberty on theCONWARTIME clause to refuse the order togo there by reference to that risk.

The Appeal was dismissed and permissionto appeal to the Court of Appeal was refused.This is a key decision for both owners andcharterers to be aware of, as it clarifies theoperation of the liberty in the CONWARTIME

clause. The case is also relevant to chartersthat do not incorporate the CONWARTIMEclause, as the wording in the Product Starcase itself was a bespoke War Risks clauseand CONWARTIME was not included.

InterpretationEvery War Risks clause must be interpreted inthe light of the particular clause, charterwording and specific factual circumstances.However, there is apparently no general rulethat the risks must increase/escalate forowners to be entitled to refuse orders pursuantto the War Risks clause.

In light of this case, owners fixing vesselsshould continue to specifically excludecountries/ports they view as excessively risky.The rights exercisable by owners under theWar Risks clause should be viewed as a fallback to these specific exclusions. Chartererswill of course want to continue to reduceexclusions to a commercially achievableminimum and to specifically includecountries/ports involved in any known trades.In this way, charterers can seek to reduce thelikelihood that owners will be entitled torefuse orders under the relevant War Risksclause.

*This article was written by James Mackayand Alex Kemp, partner and associate in theShipping & Transport Group of HolmanFenwick Willan LLP respectively, who havethe conduct of the Paiwan Wisdom case forone of the intermediate charterers and whohandle a substantial number of contractualdisputes and associated issues arising fromhijacks and other maritime casualties.

TO

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DA-Desk focuses ontime bars

In the shipping industry, managing time bars within pre-agreed time limitations is atedious and labour intensive process involving busy operations personnel

who probably have higher priorities.

Overwhelmed by manyadministrative tasks, manyoperations departments simplydon’t have the time, or resources

to follow up with agents and re-bill charterers. Consequently, they may forfeit on their right

to be recompensed for expenses advanced ifinvoices do not arrive in a timely manner fromthe agent, warned port disbursementmanagement service concern DA-Desk.

The amounts involved may not be large ineach particular case, but in collective termsacross the entire fleet, they may add up to asubstantial figure.

The risk increases if the fleet is exposed tothe unpredictable nature of the spot market.There is customarily no agreement betweenthe agent and the charterer to pay portexpenses directly; hence, this can lengthen thenegotiation and result in further loss ofvaluable time and cause a strain on therelationship with the agent prior to the portcall.

Although agents are not obstructive, theygenerally have no incentive to send charterers’expenses within the time bar period and, inaddition, might not necessarily have anyknowledge of the time bar agreement.

A standard clause in the agency appointmentletter is usually all the information that anagent has regarding the time bar andcharterer’s expenses. Thus, the vesseloperators themselves have to follow up withthe agents, so the process of following up –especially where there are multiple load anddischarge ports – must be in place, DA-Desksaid.

However, the management of this process isanother routine administrative procedure thattends to be very time consuming. Realisngthis, DA-Desk has come up with a solution tothe problem.

DA-Desk has developed a management toolto identify and ensure conventional charterers’expenses and those outlined in Worldscale, orin the governing charterparty, are re-billed tocharterers within the agreed time limitations.

Other customary charterers’ costs, such asshifting expenses and/or specific charterpartyrelated clauses are also included within theambit of time bar. On behalf of its customers,DA-Desk will follow up with agents, bothelectronically and manually, to submitinvoices for re-billing costs to charterers forport calls where a time bar exists.

Various reporting tools will be utilised tokeep the customer well informed of thepending, received and dispatched expenses.Charterers’ expenses can also be re-billed witha default outlay commission, usually 2.5%,automatically applied.

Management processThe vessel operator initiates the process byappointing the agent through the DA-Desksystem. By default, the agreed customer timebar setting applies or, alternatively theoperator can select ‘As per the C/P’ andspecify a time bar.

This entry then sets up the time barnotification in the appointment letter that issent to the agent.

After the vessel departs, DA-Desk will senda weekly email to agents reminding them tosubmit to DA-Desk the invoices for charterers’expenses within the time bar period, orconfirm no charterers’ costs were incurred.

Subsequent weekly reminders will then besent to agents until either the invoices havebeen received or the time bar period haslapsed. Where agents do not respond to theemail reminders, DA-Desk will call the agent.

The first time bar report to the customer willbe sent on the Monday immediately followingthe departure of the vessel. This report detailsall port calls where invoices for charterers’expenses requested from the agents are stilloutstanding, indicating the time bar period andthe number of days remaining before expiry ofthe time bar.

In addition, DA-Desk will send a weeklyreport detailing port calls where invoices forre-billing have been received and dispatchedto the customer, or where the agent has

indicated, among others, that expenses will berecovered directly from the charterer; noexpenses were incurred for charterer’saccount; or invoices will only be received afterexpiry of the time bar period.

Talking with Tanker Operator, DA-Desk’soperations director Ken Anderson explainedthat the time bar slippage is due to a lack oftime and not a lack of vigilance.

“Often, operators will have to come in at theweekends to complete various administrativetasks, which add little value to the individualor the company. Disbursement account (DA)approval is usually carried out by busyoperators, not low paid clerks, who have tocheck both the pro-forma disbursementaccount (PDA) and the final disbursementaccount (FDA).

DA-Desk fulfils these administrative tasksrelating to the PDA and the FDA, thusenabling the operators to concentrate theirtime on operating vessels more effectively,”Anderson said.

A company operating a large fleet on thespot market will have more DAs to deal withand less time between calls; therefore, timewill be at a premium. Essentially, DA-Deskgives valuable time back to the operators.“And because our primary focus and key

DA-Desk’s Ken Anderson.



competency is DA processing, the operatorsare assured of quality work in this regard,” heclaimed.

He further explained that the agent isinitially informed by the operator of any timebars, which may apply via a clause in the‘Agent’s Instructions’ and this is sent prior tothe vessel’s arrival.

The responsibility for any time bar willalways lie with the operator; DA-Desk’sservice assists the operator with a follow upprocedure (via emails and even phone calls, ifnecessary) to remind the agent well before thetime bar expires.

Turning to the multi-berth problem, he saidthat many charterparties are fixed for ‘one safeberth’. However, cargoes are bought and solden route and vessels may have to ‘shift’ fromone berth to another, the cost of which wouldbe borne by the charterer.

Each ‘shifting’ can be attributed to aspecific charter and therefore the process ofshifting does not exacerbate the problem. DA-Desk would count this as one port call even ifthere were multiple ‘shifts’ involved.

“While the amounts of money involved aresmall relative to the cost of the charter or thecargo, we have regularly seen amountstopping $60,000, with the largest amounts

being around $140,000*. In this presentmarket, many would agree that these aresignificant amounts,” he said.

“We assist the operator in the timelypreparation of the invoice with documentationbut the actual collection of the invoice is amatter for the operator. Since we are notinvolved in the collection, we do not witnessany disputes.

“The terms are clearly set out in the charterparties and under Worldscale, as long as theclaims are raised in a timely fashion with gooddocumentation, they should be settled withoutdispute,” he explained.

Anderson claimed that DA-Desk has seencases before the company became involvedwhere the time bar had expired and amountssimilar to the above have been lost.

In recent years, oil majors and large tradinghouses have tightened their belts, aspreviously, some allowances were made forlate submission (one or two days), but this isno longer the case. In one instance, DA-Deskassisted in saving an operator over $100,000over three port calls.

DA-Desk currently serves eight of the 15largest tanker operators, listed in TankerOperators Top 30 tanker companies publishedin March of this year.

In terms of deadweight tonnage, DA-Desk’scurrent market exposure is estimated to bearound 30% of the oil tanker market and 40%of the chemical tanker market**.

At present, the company has nearly 20customers using its time bar managementservice, which is a free service to customers.

Stena Weco is one customer. Manager forworldwide commercial operations JohanJäwert commented: “For Stena Weco, the timebar function is very important in making surethat we are not time-barred for any port costthat is for charterer’s account.”

* Fairway dues and standby tugs in Finland.**Based on: Stopford, M (2008), MaritimeEconomics, p 69.

DA-Desk introduces Vendor DirectDA-Desk has also unveiledVendor Direct, a new servicedesigned to manage all non-disbursement account-relatedinvoices.

This service automates the processesrequired to handle the thousands ofindividual invoices that cross an operator’sdesk, freeing the operator to focus on other,more important business issues.

“Our customers have been talking with usabout the pressures regarding currentbusiness demands,” said Ian Baker, businessdevelopment manager, DA-Desk. “Forexample, operators have told us that theprocess of initiating, monitoring, settling,accounting and reconciling thousands ofindividual voyage-related transactions is aconstant and time-consuming challenge. Soin response to their need, we have utilisedour experience with DA’s to create this newservice.”

Vendor Direct automates transactions thatare typically single-cost items with single,

balance-only payments that go through alengthy purchase-to-pay process. Thesetransactions involve a wide array ofcounterparty types, including surveyors,vessel suppliers, mooring companies,transiting passage pilots and offshoresecurity services.

It allows operators to systematicallyoffload cumbersome transactions to DA-Desk through the simple issuance of avendor service request (VSR). The requestsautomate and standardise the process sooperators can use their time to analyse andbenchmark transactions.

Customers who also use the DA-DeskPortPayables service will gain paymentsettlement savings, due to PortPayables’ zerotransaction costs and the ability to pay inmultiple currencies with highly competitiveforeign exchange rates.

In addition, because vendor invoices arereviewed, queried and crosschecked, invoiceerrors are detected and credit notes can beissued. Plus operators can realise space andcost savings from no longer having to

physically store the paperwork.Customers who use the Vendor Direct

service will also benefit from another DA-Desk service, DA-Compliance, which aimsto minimise exposure to legal, financial,transactional, regulatory and operationalrisks, the company claimed.

Through DA-Compliance, operatorsreceive an automated sanctions-compliancescreening of vendors, agents andtransactions, powered by Dow JonesSanction Alert. This fully managed dataservice is designed for transaction filteringand uses reliable, accurate, timely sanctionsinformation. The system is based on a list of16 key sanctions covering all majorregulatory regimes.

According to NORDEN’s Jacob KochNielsen, “Vendor Direct is a tool thatstreamlines payments to our vendors in allaspects. As a bonus, we get fast access tostatistics on all our vendors, which enablesus to make better vendor agreements in thefuture.” �

What is a time bar?

A time bar refers to the stoppageplaced on the exercise of a claim,judgment, or right after passage of acertain period (eg 90 days within whichif a party has not submitted a writtenclaim, any such claim is deemedwaived and absolutely barred).

TO


INDUSTRY - SHIPMANAGEMENT

Effective internalaudits essential

Internal audit is an important part of the effectiveness of a company’s safetymanagement system (SMS). However, even today it has been

misunderstood both by ship and office personnel*.

Internal audits provide a number ofimportant services to companymanagement. These include detectingand preventing deficiencies, which can

result to an incident, or an accident, testinginternal control and monitoring compliancewith company policy and safety procedures.Establishing an internal audit functionprovides a vital step in the growth of thecompany and its fleet.

Although the shipping industry hasidentified monitoring mechanisms to ensurecorrect implementation of a company’s SMSon board ships, still accidents happen, majorones and we are still observers, just watchingit happen.

For example 44 dead in 39 days – amazingstatistics – Jian Fu Star sank on 27thOctober 2010, Nasco Diamond sank on 10thNovember 2010 and finally Hong Wei whichwent down on 10th December 2010.

Neither Erika, nor Prestige showed us theway to correct things and prevent accidents,when newbuildings hit the rocks off an islandin the middle of nowhere – Oliva andunfortunately Rena few months ago in NewZealand.

As I explained above, recognising the‘discomfort’ the word audit usually elicits andafter having conducted hundreds of audits, Ihave to admit that Masters and seniorofficers are not comfortable with the idea ofbeing audited. They think that this is a kind ofexamination, but it isn’t.

For example, who can say today what thedifference is between an internal audit and thevisit of a superintendent on board a ship, twoprocedures which are so close but at the sametime, so far away. Why don’t attendancereports have the format of an internalaudit checklist?

Because during the attendance the Master orthe Chief Engineer can disclose – unofficially- to the company’s representative a seriousdefect but during an audit this is totallyunacceptable. One can examine the accidentsand it will be seen that most of the vesselsinvolved had a blank ‘criminal record’ and

what does it mean; zero non – conformitiesduring internal/external audits and goodreports uploaded by third party inspections(PSC, Flag, etc) which means blank reports, orthree to four minor observation recorded, so itis surprising how these vessels are involved ina major accident?

Given the scope, objectives and functionsof internal audits on board ships today are ofcritical value for several reasons all of whichare well known:� It is potentially of major importance, as an

effective internal audit system leads to improved accountability, ethical and professional practices.

� It can improve the quality of output, support decision making and performance tracking.

� It has the potential to act as an independentand objective appraisal mechanism and its findings and recommendations can act as a tool enabling the company, or department within which it functions, to take suitable corrective and preventive actions.

It is also necessary to highlight the differencethat exists between auditing on board, or in theoffice by an in-house, or by a private auditor;the in-house auditor’s opinion serves theinterest of the company and is not confined toonly providing a full and fair view to the management, as is the case of an-unannounced internal audit by a private auditor.

Why is the preparation for the execution ofan audit, the advanced notice from the officeto the ship and its senior officers necessary, ifall the integrated management systems andprocedures ‘shout’ that the ship must bealways prepared for any kind of inspection atany time?

Lack of initiativeIn real life, things are much different. Perhapswe are pointing the wrong way; we cultivatepeople on board to fill in checklists and peoplein the office filing them in the correct folder,which corresponds to the specific company’s

procedure, ignoring that this is holding themback by removing any trace of initiative,which could change their mindset and safetyculture.

With the expanded and extended role ofinternal audits now stretching beyond theirtraditional focus on ISM Code compliance, toencompass an assessment of the company’sSMS efficiency and effectiveness achieving itsobjectives, internal audits have become amanagement tool. Overall best practices ininternal control and internal audits willgenerate key benefits.

The overall design of the internal auditsystem, including best practices, should begeared towards the specific priorities of thecompany taking into account its owncircumstances and requirements for the solepurpose of preventing incidents/accidents.

But an overall best practices framework isnecessary to evaluate the adequacy of internalcontrols and the performance of the companyand its fleet, as well as of the internal audit.

Best practices could include those relatingto roles, responsibilities and authorities plus anoverview of the internal audit, resourcing theinternal audit function, planning internalaudit’s activities, audit processes andevaluating internal audit’s performance.

How many Masters do you know who pointout non – conformities and send them to theirDPAs, how many DPAs do you know whoapplaud this process?

The audit function is not an examination, isnot something personal between departments,Masters, or superintendents. It shouldbe ALWAYS seen as being part of themanagement function both on board andashore and increasingly as a way forimproving the performance both in the officeand the vessel. This should be pointed out toall personnel involved in shipping to preventincidents/accidents and save human life andthe environment.

*This article was written by Capt AndreasTogantzis, Master Mariner, MNI, MBA, HSQE,marine & risk manager, DPA/CSO, UnitedInternational Management.

TO



Fujian-based Tuofo ShippingManagement will implement thehull inspection, maintenance &repair and energy & environmental

modules on two of the company’s newly builttankers.

Without a current system in place, theFujian-based company said that it was lookingfor a proven solution for fleet management.

Bremen-based Sloman Neptun, will installthe hull inspection and maintenance & repairmodules on three of their newly built chemicaltankers and will also install the drawingsmanagement module in the company’s centraloffice location.

The company said that it wanted a systemthat had the ability to fully track and monitorthe condition of the vessels.

Finally, Athens-based Stealth MaritimeCorporation has been added to ABS NauticalSystems’ growing list of recently signedcustomers in Greece. The company willimplement the hull inspection module on twoof its liquefied petroleum gas vessels earlynext year.

The newbuild program’s offerings providethese companies with the ability to streamlineprocesses while improving cost and efficiency,ABSNS said. Free software is currently onoffer for a 12-month period on all ABS-classed vessels built after 1st January 2009.

“In targeting new opportunities, we takeadvantage of the extended ABS networkaround the world and the relationships theyhave with some of the most prestigiousshipowners and operators. Taking advantage ofthese relationships lends us insights into themaritime industry and we use this knowledgeto apply our resources in ways that bestsupport our customers and the industry as awhole,” said Joe Woods, ABSNS senior vicepresident, global sales and marketing.

ABS marine newbuild program is offeredfree for hull inspection, maintenancemanagement and energy & environmental

management software to all ABS-classedvessels built after 1st January 2009.

Claimed to be one of the first class-integrated, fleet maintenance solutionsavailable to the maritime industry, thenewbuild program has the potential to changehow classification is managed in the future.

By linking ship maintenance software withclassification and survey requirements, thenewbuild program has the ability to streamlinethe vessel owner’s inspection process andprovide a more cost-efficient and effectivemethod of monitoring long-term shipmaintenance and integrity.

The newbuild program includes threesoftware specific modules programmed withthe technical data specific to the newly builtvessel - hull inspection, maintenance managerand energy & environmental manager. Allthree modules are also offered in NS5Enterprise, ABSNS current suite of softwareproducts.

Hull inspectionThe hull inspection module is a browser-basedtool that helps track the condition of a vessel’sstructure throughout its service life.

Designed for owners and operators, theprogram provides an electronic model of thevessel with vessel-specific compartment dataand critical areas identified, along with anasset-specific hull maintenance manual thatoutlines the compartments/spaces to inspect,critical areas to examine and identifiesintervals for inspection. It also includes toolsfor scheduling, recording and reportinginspections.

By identifying potential problems andcritical inspections areas, the hull inspectionmodule makes it possible for fleet managers totake preventative measures to reduce risks andincrease productivity in a more cost effectivemanner, ABSNS said.

The maintenance manager module managesfunctions of vessel maintenance and is claimed

to be one of the industry’s leading plannedmaintenance programs.

The module includes tools to develop amaintenance program, document repairhistory, review completed work orders, createservice requisitions and monitor progress ofclass surveys and certificates by linking toABS’ survey manager program.

It allows vessel owners and operators toeasily identify ship maintenance trends andefficiently plan for future maintenance workand subsequent staffing needs. As part ofABS’ marine newbuild program, themaintenance manager module will be providedwith technical information, already includedby ABS with information obtained during thenewbuilding phase.

Energy & environmental managerThe energy & environmental manager is acomplete solution that provides a platform foreffective, efficient and environmentally soundvoyage management.

The software provides easy-to-use dataentry forms that can be populated manually orautomatically. The automated feature, poweredby ESRG’s OstiaEdge software gives usersaccess to integrated, real-time analytics ofshipboard equipment and automates the datacollection necessary for environmentalreporting, leading to fewer non-complianceevents.

Business intelligence features include adrill-down capability that allows the operatorto click to the data at a component level.Customisable dashboards provide allpersonnel access to the same information fortrending purposes, leading to improved vesseland fleet performance and fuel efficiency.

This software also makes it possible to trackand record key voyage related events,including ballast activities, fuel and lube oilconsumption and fuel oil switching.

Shipboardmanagement

software successABS Nautical Systems (ABSNS) has added three more tanker companies to its portfolio

of clients signing up to its newbuild program.

TO

Wallem in Singaporeshipmanagement

joint ventureWallem Shipmanagement has launched a joint venture shipmanagement partnership

in Singapore with Nanjing Tanker Corp.



The new company, NWShipmanagement, representsWallem’s first shipmanagementpresence in Singapore, the

company said.NW Shipmanagement is a partnership

between an established tanker owner and anexperienced tanker manager with a commongoal – to build and maintain an excellentreputation in the bulk liquid tradingmarketplace.

Simon Doughty, Wallem Group managingdirector, said the new venture would furthergrow the company’s reputation in managingtankers.

“Wallem already manages 130 tankervessels, putting NW Shipmanagement in agood position to draw on our experience inmanaging the vessels to internationalstandards,” Doughty said.

“NW Shipmanagement’s staff will useWallem’s systems and processes to manage thevessels safely and efficiently. Both Wallemand Nanjing Tanker Corp pride ourselves onhigh quality, making this a partnership with astrong foundation and common understanding.

“This venture is also an opportunity for usto invest in more Chinese officers with tankerexperience, providing longer term solutions tothe current shortage of seafarers,” he said.

Wallem has had a presence in Singapore formore than 50 years. The 90-person strongoffice specialises in ship agency services.Wallem Shipping Singapore offers ownersservices, including drydocking, dry and wetcargo operations, port captaincy and shipbunkering services.

Asset managementWallem also now supports many financialinstitutions in asset management, leveragingthe company’s expertise in technical andcommercial management.

The team provides services from vessel

takeover and situation assessment, tomaintenance and employment for futureearning potential. Alternatively, vessels areprepared for sale through the Wallem sale andpurchase team.

Wallem currently technically andcommercially manages 26 vessels, which havecome through relationships with banks, themajority of which have come throughNorthern European banks.

Wallem is in a unique position to offer aservice to banks, or shipowners looking torestructure, with a combination of technicaland commercial management expertise. Thisallows an owner to decide how he or shewishes to proceed with a vessel. For example,some wish to prepare it immediately for saleand the S&P team can arrange for this.

Others wish to improve the quality of thevessel and trade it until it can be sold in abetter market. Wallem said that it has thetechnical team to improve the vessel and acommercial management team to identifyemployment opportunities.

For shipowners who need to restructure,Wallem can provide a range of services, whichcan be outsourced from the owner to save onoperational costs. These include procurement,technical and crew management in addition tocommercial management.

The company claimed that no other

shipmanager provides a range of services fromthe operations to the commercial managementof a vessel. “This is why the financialinstitutions have favoured Wallem and moreshipowners are seeing the advantages ofworking with the company,” Wallem toldTanker Operator.

Several locationsNW Shipmanagement in Singapore joins theWallem Group’s other ship managementoffices located in Germany, Norway, China,Chile and headquarters in Hong Kong.

The Group currently manages more than400 vessels, 43% of which are drybulk carriersand 32% are tankers.

NW Shipmanagement said that it will hirequality tanker crews from China and Indiawith a focus on strengthening the pool ofexperienced tanker Chinese officers.

Wallem Shipmanagement currently has afull complement of quality Chinese crew onalmost 100 ships in management.

The officers will be trained at Wallem’sMaritime Training Centre in Qingdao, Chinaand Mumbai, India. The Qingdao Centrerecently purchased a liquid cargo handlingsimulator and hired an experienced trainer inpreparation for the increase in bulk liquidvessel crew training.

Simon Doughty seen with Zhu Ning, vice president of Sinotrans at the opening of the newventure.

TO


Banks are increasingly finding findthemselves holding distressedassets, on the back of more andmore owners defaulting on

payments and builders looking to unloadunwanted tonnage.

One solution is the link up between Cardiff-based Graig Group and Global MaritimeInvestments (GMI) to provide shippinglenders with tailor-made services forproblematic shipping exposures.

Working together, the two groups willprovide lenders with workout solutions, safehavens and exit routes for distressed assetsand underperforming shipping portfolios. Thejoint approach brings together the long-termshipmanagement experience and bank contactsof Graig and the freight market expertise ofGMI.

Hugh Williams, CEO, Graig Group, said,“This is a slow burn crisis for shipping banksand it is by no means over. Banks arecurrently only really lending to offshore andLNG projects, while nursing portfolios oftankers and bulkers, which may be under thewater in value terms and in many cases areunderperforming as loans.

“They want a lot of ships off their books, orunder better commercial and technicalmanagement and with GMI alongside us wecan deliver that. We know there is a queue ofshipmanagers outside every banker’s dooroffering technical shipmanagement and thereis private equity in the market place looking topick up opportunities.

“This link up with GMI brings the twotogether in a powerful combination, which canapply technical knowhow and commercialpresence to help banks clean up theirportfolios,” he said.

Steve Rodley, GMI managing partner said,“Our large physical portfolio and robustfreight management systems provide a low-risk pool for tonnage, which is why we are the


Shipmanagement safehavens for shipping

lendersMany shipmanagement concerns are becoming more involved in offering technical

services to banks and other financial institutions.charterer of choice for risk-savvycounterparties.

“Extending this expertise into managedservices is straightforward and offers anoptimal solution to current market challenges.We chose to work with Graig due to theirrecognised excellence in technicalmanagement, in order to offer the bestavailable product to the market.”

Bank linksGraig has active shipmanagement divisions inCardiff and Shanghai and has close links withsignificant shipping banks. The group alreadyprovides regular inspection services andtechnical support to two major shippingbanks. GMI is one of the largest freighttrading groups in the world.

The Graig Group is a broad-basedinternational shipping services, shipowningand offshore group offering technicalshipmanagement and commercialshipmanagement, newbuilding supervision,offshore support services, consultancy,drydock management, ship inspections, lay-upservices, ship design, shipowning jointventures and ship finance..

Graig provides technical and commercialmanagement and crewing for a mixed fleet ofvessels on behalf of a number of owners andbanks and has supervised over 100newbuildings for itself and major shipowners.

As mentioned, Graig provides technical

consultancy and management support servicesto two major banks with a financed fleet ofover 100 vessels and also to a number of flagstates. Yards and finance can be sourced forall vessel types and newbuilding supervisioncan be provided together with servicemanagement follow up, the company claimed.

Graig employs a global maritime workforcedrawn from the UK, China, the Philippines,Vietnam, India and Russia and has offices inCardiff, London, Oslo Shanghai and HongKong.

Among the group’s recent newbuildingsupervision contracts was an agreement tolook after 10 x 157,000 dwt Suezmaxes onbehalf of Global Union Shipping of HongKong. The contract was won by Graig China(GCL), while the vessels are being built byJiangsu Rongsheng Heavy Industries in China.

The last vessel in the 10-ship order is duefor delivery in January 2014.

GCL is supervising – or has alreadydelivered - 40 other newbuildings atRongsheng. The total number of ships inGCL’s newbuilding programme is nownearing 150.

Global Union said that one of the mainreasons it chose Graig for the supervision ofthe Suezmax newbuildings was the fact that ithad been very impressed by the excellentperformance of GCL and the fitting-outevident in other newbuildings in Chinasupervised by Graig.

Extending this expertise into managed services isstraightforward ...We chose to work with Graig due to their recognised excellence in technical

management, in order to offer thebest available product to the market.

“

”Steve Rodley, managing partner, GMI

TO


INDUSTRY - SHIPMANAGEMNT

A ‘garbage timebomb’

The resulting increase of waste material and the management and disposal of it, is anever growing problem for national and international organisations alike,

a ‘Garbage time bomb’*.

In the world’s oceans there are fiveregions of circulating ocean currents,known as gyres, in which floating debristend to accumulate. Two huge regions of

marine litter exist in the Pacific Ocean causedby the dumping, either collectively, orindividually, of mainly plastic material.

Known as the Great Pacific GarbagePatches, they are characterised byexceptionally high concentrations of plastics,chemical sludge and other debris trapped bythe currents of the North and South Pacific

gyres. The scale of the problem can be judged by

the fact that the great pacific rubbish gyre isabout the size of Texas and contains roughly3.5 mill tonnes of rubbish, consisting of oldfishing nets, plastic bottles, crisp packets,plastic containers, plastic components of alldescriptions, ice cream tubs and lumps ofpolystyrene.

For many years and certainly up until themid-to late 1970’s, it was generally believedthat the oceans could absorb anything that was

deposited into them.Following departure from port and once out

of site of land, the ships crew felt free todispose of all manor of garbage over the sternrail. However, in those days, the amount ofpackaging was far less than today and plasticswere not so prominent.

Research has shown that a small piece ofpaper will only take two to four weeks todissolve at sea, but a piece of painted woodwill take 13 years, a tin can 100 years and aplastic bottle 450 years. Therefore, much of


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the litter disposed of into the seas during thelast century is still affecting the marineenvironment today.

Ships are not the only source of garbageeffecting the marine environment, however, asin some areas of the world most of the rubbishfound in the ocean and on the beaches comesfrom passing ships, which throw rubbishoverboard rather than dispose of it in port.

In previous decades and in some parts of theworld today, the lack of garbage receptionfacilities in port has left the mariner with verylittle choice but to dispose of garbageoverboard.

Some port authorities expressed surprisewhen a vessel wanted to land rubbish, whilethe ship’s agent did not understanding why itwasn’t disposed of prior to arrival. Thesesituations and attitudes have changed andmany ports now allow for both general andrecyclable garbage.

Delaying the time bombPersuading people on land and afloat not touse the oceans as a rubbish tip is a matter ofeducation. For the marine industry, 1988 saw

the introduction of MARPOL Annex V, whichsought to eliminate and reduce the amount ofgarbage being dumped into the sea from ships.

The Annex forbade the dumping of plasticsanywhere at sea and severely restricted thedisposal of other forms of garbage, dependingon geographical area, type of garbage anddistance from the coast. It also obligedGovernments to provide garbage receptionfacilities for visiting ships.

Since its introduction there has been areduction in the amount of garbage, however,recent surveys have shown up to 10 tonnes ofgarbage per mile of coastline so it is clearmore needs to be done.

The United Nations recognised that moreneeded to be done. The IMO was invited toreview the Annex and to assess itseffectiveness in addressing sea-based sourcesof marine debris.

The review commenced in October 2006and the IMO consulted with relevantorganisations and bodies worldwide. IMO’sMEPC approved amendments tothe Annex inthe autumn of 2010 and they were adopted atMEPC 62 in July 2011.

They have fundamentally changed theAnnex thus:� Discharge of all garbage into the sea is

prohibited, except as expressly provided otherwise.

� The number of categories of garbage has been increased, including a definition for cargo residues.

� Some cargo residues and cleaning agents can be discharged, as long as they are not harmful to the marine environment.

� It is incumbent on the owner/Master to prove that discharged material is not harmful to the environment.

� The requirements covering placards, garbage record books and garbage management plans have also changed.

Perspective of the problems have certainlyimproved in recent times but the old idea thatthe sea can cope with anything still prevails tosome extent and it is therefore important toensure vigorous enforcement of regulationssuch as MARPOL Annex V.

Port State Control officers are empoweredto inspect ships for compliance and wherethere is clear evidence that the Master and

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crew are not familiar with procedures, relatingto the prevention of pollution by garbage, theship can be detained until this is rectified. It istherefore essential to not only follow theregulations but also provide evidence that thisis the case on board.

Burden of proofThe combination of increased garbagecategories, clearer definition and thedeclaration that the discharge of all garbage isprohibited unless expressly allowed hasburdened the ship with additionalresponsibility.

Garbage that fits into a specified categorycan only be disposed of under certaincircumstances; conversely garbage that doesnot fit a categorisation cannot be dischargedinto the ocean. The burden of proof has shiftedso that the Master must now be able to provethat any discharge from his vessel will notcause harm to the marine environment.

The revised Annex has also made changeswith regard to the size and type of vesselrequired to comply with certain regulationscontained within it. Shipowners and operators

are advised to prepare for this change ofemphasis with regard to marine garbagedisposal by reviewing the current on boardplacards, log books and manuals.

Further advice can be obtained from IMO,flag states and specialist marine publishers,such as Maritime Progress.

Annex V requires every ship of 12 m, ormore in length to display placards notifyingeveryone on board of the regulation’s disposalrequirements. The placards should be writtenin the working language o the ship’s crew andwhere necessary in English, French or Spanishfor ships sailing to other States’ ports, oroffshore terminals

Garbage record bookEvery ship of 400 gt and above shall beprovided with a garbage record book unlessspecifically excused by the administration.This log book will be used to record allinstances of garbage disposal both at sea andto port reception facilities.

The requirement to carry a garbagemanagement plan has been extended to allships of 100 gt and above. The plan is required

to have written procedures for minimising,collecting, storing, processing and disposing ofgarbage, including the use of equipment onboard and will designate the person, orpersons on board in charge of carrying out theplan.

In the previous version of Annex V, shipscould under certain circumstances dispose ofgeneral garbage overboard, however, under therevised Annex, this is strictly forbidden.

Shipmanagers and port authorities need toact swiftly as these amendments enter intoforce on 1st January 2013. New posters,garbage management plans and record booksrelating to these changes will be availableduring the second half of 2012 from somemarine publishers.

*This article was written by Capt AndyGoldsmith, marine technical manager ofMaritime Progress, manufacturer of marinesignage and specialised publisher of marinebooks and posters.

TO


INDUSTRY - SHIPMANAGEMNT

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ECA voyage calculations made easyThe imminent tightening of fuel control areasaround the US is providing shipoperators/managers with a new set of challengesto face in the drive for cost effective operation.

AtoBviaC has claimed to come up with the answer to cost controlduring affected voyages with its new Port to Port - Online version ofthe established BP Shipping Marine Distance Tables.

This offers the user the ability to calculate both SECA (SulphurEmission Control Area) distances and distances in the recentlyintroduced North America ECA (Emission Control Area).

For vessels operating within the North American ECA, from 1stAugust, the sulphur content of fuel oil used on board must not exceed1%. This is, however, only a stage in the ongoing legislativemaritime timetable designed to gradually reduce harmful emissionsacross the globe in the course of the next decade.

“Our research has shown that it is rarely cost effective, or practicalto avoid these routes entirely,” said Capt Trevor Hall, AtoBviaCdirector. “It is, however, essential to accurately calculate in advancethe impact on vessel operating costs and to identify where a slightadjustment of route will avoid unnecessary incursion into an ECA.

“We have implemented SECA distance calculations into ourdistance table matrix from the time the various control areas cameinto effect, but with the implementation of the North American ECA,ship operators need to be aware they could incur unexpected costs ifthey do not make the correct provision for the additional fuel costs.”

AtoBviaC route tables provide routeing and distance informationfor the maritime industry, delivering high quality, realisticcalculations of journey options.

This product also sees the launch of a new user friendly interface,which uses Microsoft’s Silverlight technology to provide exceptionalfunctionality that is familiar and easy to use.

Working on a Windows PC or an Apple Mac, it now incorporates anew, easy to use purchasing structure, which enables the user topurchase a block of distances.

Ship operators can also benefit from route scanning, whichprovides the user with distances within the various SECAs and ECAsand distances within Load Line Zones via marine information mapoverlays.

All voyage reports and maps can be saved and exported in pdf andspreadsheet formats. �

INDUSTRY - P&I


The EC said that it had closed itsanti-trust investigation into certainprovisions accompanying claim-sharing and joint reinsurance

agreements in the marine insurance sector.This investigation focused on the

International Group Agreement (IGA) and thePooling Agreement between the P&I Clubsthat contain rules on the sharing of insuranceclaims and joint reinsurance, as well as ruleson the contractual relationships between theP&I Clubs and their members, the EC said ina statement.

Brussel’s aim was to examine whethercertain provisions of the agreements lessenedcompetition between P&I Clubs and/orrestricted, to a certain extent, the access ofcommercial insurers and/or other mutual P&Iinsurers to the relevant markets.

After opening proceedings in August 2010,the EC said it conducted a marketinvestigation involving shipowners, brokersand commercial insurers. The marketinvestigation was not sufficiently conclusive toconfirm the EC’s initial concerns, it said.

The agreements concluded within the IGwere previously exempted from the EU’scompetition rules by an EC decision of 12thApril, 1999. The exemption expired on 20thFebruary 2009, leading to the commencementof the EC’s investigations the followingAugust.

EU competition law’s reformed proceduresintroduced in 2004 meant that the IG was notallowed to seek a further IGA individualexemption.

Even though the European Commission hasdecided to close its investigation, the IG saidthat it planned to make some amendments tothe IGA. These are currently being finalisedand details will be published in due course, thegroup said.

The International Chamber of Shipping(ICS), said that it welcomed the EC’s decisionto close its investigation into IG’s activities.

ICS director of legal affairs, Kiran Khosla

remarked: “ICS has always firmly stated thatthe current system of mutual third partyliability insurance provided by theInternational Group continues to serve the bestinterests of ship operators and their customersextremely well, alongside serving the interestsof claimants and the general public.

“In particular, the mutual insurancearrangements provided by the Clubs enable theprovision of the very high levels of insurancerequired under international liabilityconventions, under which compensation toclaimants is generally paid regardless of faultand without legal wrangles,” she said.

Investigations followedICS also said that it had has closely followedthe EC investigations into the activities of theIG. The Commission had stated that it wassimply conducting an investigation, and thatthis did not imply that there was ever anyproof of infringement. It had also advised thatit had opened the investigation on its owninitiative and that it had not received anyformal complaints, the ICS said.

In bilateral discussions with theCommission, ICS and the EuropeanCommunity Shipowners’ Associations (ECSA)had previously emphasised that the mutualinsurance arrangements provided by the P&IClubs are efficient and cost effective.

“We are very pleased that the Commissionofficials involved now appear to understandthe benefits of the current system,” Khoslaconcluded.

Iranian/Indian puzzleMeanwhile, the Iranian situation rumbles on.

In July, the United India Insurance agreed toprovide P&I cover to Indian tankers carryingoil from Iran, according to reports comingfrom India.

Since 1st July, 2012 European covers forshipping companies carrying fuel, orpetroleum products of Iranian origin ceasedunder sanctions levied by the US and the EU

in protest of Iran’s nuclear programme.India has since given state-owned insurers

approval to provide limited cover to Indianships transporting Iran’s oil allowing refinersto avoid any interruption in supply resultingfrom constraints on Iranian vessels strugglingwith Western sanctions.

According to local reports, Indian insurancefirms are now allowed to provide shipownerscarrying Iranian oil $50 mill P&I coverage,plus an equal amount for hull & machinerycover, although this is a fraction of the cost ofP&I coverage for a VLCC.

It was reported that Indian shipowners hadasked for cover to lift Iranian oil, thusavoiding the sanctions.

Japanese insuranceFor the year ended 31st March, 2012shipments to India from Iran fell 5.7%compared to the previous 12 months. Incomparison, Japan’s Government has providedinsurance of up to $7.6 bill for Iranian oilshipments to maintain trade with Iran.

Local reports said that Asian countries havebeen looking for ways to avoid the sanctionsproblem, as Iran accounts for a significant partof their oil imports, although South Korea hasclaimed that it had stopped all oil importsfrom Iran.

India was one of 20 countries who receiveda six-month waiver from the sanctions bydecreasing its purchase of Iranian oil by morethan a fifth.

The US government previously exemptedSingapore and China from the sanctionsallowing Singapore, the world’s largestbunkering port to purchase Iranian crude andfuel oil.

However, it has been reported recently thatseveral leading Indian tanker owners havestopped shipping oil from Iran. Lloyd’sMaritime Intelligence reported that Mercatorwas the only Indian tanker owner to ship oilfrom Iran during July.

International Groupgiven the all clear

What will come as something of a relief to the P&I community, the EuropeanCommission competition directorate closed its investigation into the

International Group (IG) on 1st August.

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INDUSTRY - PIRACY

A need for effectiveregulation

Shipowners and operators have little choice but to adopt more robust forms ofdeterrence to counter the threat of piracy, warned Eric Conway MBE, managing

director Protection Vessels International (PVI), talking with Tanker Operator.

“Until a land-based solution is found toaddress the root causes of piracy, itwill continue to grow and pirates willlook to more sophisticated ways,

including the use of GPS technologies, totarget vulnerable vessels,” he said.

He said that the decision to employprivately contracted armed security personnel(PCASP) was a complex one for anyshipowner, or operator. “This situation iscomplicated further by the rapid growth in thenumber of maritime security companies andthe wide variances in the quality, integrity andprofessionalism of the services being offered,”he said.

As the maritime security industry hasgrown, so has the need for effectiveregulation. Conway said that PVI wasencouraged by the IMO’s progress and itsdesire to establish a global standard for the useof private maritime security. This was becauseto maintain ‘business as usual’ had thepotential to develop into a ‘race to the

bottom’. “Lower quality, lower cost maritimesecurity firms responding to competitivepricing in an unregulated market and gainingmarket share over tier one contractors canstore up problems for the future,” he warned.

“This is not to say that companies like PVIcurrently operate in a vacuum. PVI submits itsservices and operatives to the most rigorousvetting criteria and procedures based onnational and EU legislation on the ownership,licensing and control of firearms andammunition, the compliance requirementsenshrined in conventions, such as theInternational Code of Conduct (ICoC) forPrivate Security Service Providers andguidance published the IMO, the InternationalGroup of P&I Clubs and flag states,” Conwaysaid.

Due diligenceHowever, he said that until agreed, regulatedand enforceable standards are brought inacross the board, shipowners and operators

will still need to conductsignificant due diligenceto ensure that the safetyof their crews andvessels is in the besthands.

Turning to theperceived costsassociated with theemployment of armedguards while transiting aHigh Risk Area (HRA),Conway quoted therecently published‘Oceans Beyond Piracy’report on the cost ofSomali Piracy to theworld economy, whichidentified a fuel bill of$2.7 bill, resulting fromincreased vessel speedstransiting throughHRAs, as the biggestcost factor for theshipping industry in

countering piracy. He explained that employing PCASPs can

free-up vessels to “slow steam”, “super slowsteam”, or “ultra slow steam” to save fuelthrough HRAs. Employing PCASP can alsoprevent shipowners and operators frommaking costly re-routes.

In an earlier report from ‘Oceans BeyondPiracy’ and compiled by maritime industryexperts, it was asserted 10% of vessels thatwould typically transit through the Gulf ofAden and Suez Canal, re-route to avoid piracy– with sailing around the Cape of Good Hopeadding an extra 10 days to the average voyagetime, rising to 20 days, depending on the routeand type of vessels transiting.

Using the report’s conclusions as a guide,PVI calculated that a VLCC would burn 100tonnes of fuel per day at approximately $686(averaged across 13 key ports as of 24th May,2012) per tonne - a 10 day re-route wouldcost $686,000 alone for one vessel. Inaddition, when taking into account the averageday rate for a VLCC charter of $51,413[Clarksons], then the extra 10 days to thejourney would incur an additional $514,130 incharter fees. This amounts to more than $1.2mill in extra costs for the charterer, beforefactoring in crewing, insurance and the variousother opex that go with running a vessel.

A vessel employing a professional, vettedand trained security team, is the best deterrentto ensure a safe passage, allowing the masterto concentrate on the efficiency of his, or hervessel, rather than the threat of piracy.

Another problem facing a shipowner todayis that since the beginning of 2012, there havebeen numerous attacks on vessels in the Gulfof Guinea.

Pirate attacks in the Gulf of Guinea tend tobe more violent than those in the Gulf ofAden, or the wider Indian Ocean.

“Although not yet on the same scale asattacks on the East coast of Africa, and notcurrently an active area of operations for PVI,the Gulf of Guinea is an area we areincreasingly monitoring and advising clientson,” Conway concluded. PVI’s Eric Conway MBE. TO


TECHNOLOGY – ICE CLASS

Polar Code – still along way to go

Earlier this year, the IMO’s MEPC reviewed progress in the Sub-Committee on ShipDesign and Equipment (DE) in developing the draft text of the mandatory

Code for ships operating in polar waters (Polar Code).

The Code is intended to cover thefull range of shipping-relatedmatters relevant to navigation inwaters surrounding the two Poles

and the protection of the unique environmentand eco-systems of the Polar regions. It wasnoted that the intention was to develop anenvironmental protection chapter in the draftPolar Code.

Member states and international non-governmental organisations in consultativestatus were invited to submit relevantproposals related to environmental provisionsproposed to be included in the Polar Code tothe next MEPC session in October 2012, witha view to providing additional guidance to theDE sub-committee for its next session inMarch 2013.

The MEPC agreed that the Code should bemade mandatory through the adoption ofappropriate amendments to the relevantannexes of SOLAS, MARPOL and otherrelevant environmental instruments.

One of the tasks facing the DE sub-committee is to unify the three different IceClass notation requirements.

Also to be looked at are structures andmechanisms in what effectively is a second

attempt to define a set of rules for vesseloperations in Polar waters.

The IMO sub-committee is also workingtowards the introduction of an ice certificate,which will be needed to be kept on board eachvessel transiting, or calling in Polar waters.

However, according to one class societysource; “There is still a long way to go.”

According to an article in class society’sKorean Register’s in-house magazine, theIMO developed guidelines for ships operatingin Arctic ice-covered water in 2002(MSC/Circ.1056 and MEPC/Circ.39).

The guidelines became mandatory in 2012.They are called the Polar Code and focus onship structure, safety, pollution andrequirements of Arctic equipment

The code was developed in 1991, whenGermany suggested amendments to SOLASCh.II-1 as follows, ‘Ships intended for servicein Polar waters should have suitable icestrengthening for Polar conditions inaccordance with the rules of a recognisedclassification society’.

The suggestion was supported by IMO andCanada was designated as an OWG (outsideworking group) by DE sub-committee. Sincethen the main members of the OWG havediscussed the issue at annual meetingssupported by academic and industry input.

At the 41st DE meeting in 1998, the planfor the international safety code was submittedby Canada and assessed by a technicalcommittee at IMO.

However, the ATCM (Antarctic TreatyConsultative Meeting) raised objections to theplan because it had not considered Antarctic’sspecial conditions and geographical features.Additionally, there were correspondingpolitical considerations, such a territorialdisputes.

Despite the technical and political problems,most IMO members agreed the importance ofnavigation guidelines for the Polar area.

Winterisation standards. Source KR.

The Polar Code is still a long way off.

TECHNOLOGY - ICE CLASS

Eventually, the earlier guidelines wereapproved in 2002.

At its 50th session in March 2007, the DEsub-committee began work on developingamendments to the Guidelines for shipsoperating in Arctic ice-covered waters to makethem applicable to ships operating in theAntarctic Treaty Area.

At its 51st session a year later, the sub-committee continued work on developingamendments to the Guidelines for shipsoperating in Arctic ice-covered waters(MSC/Circ.1056 - MEPC/Circ.399), so thatthey were also applicable to ships operating inAntarctic waters. The amended guidelinesbecame effective in 2011.

Test proceduresThe procedures for equipment test andassessments are generally divided intomechanical tests and environmental tests.Mechanical tests include vibration resistance;vibration strength; shock strength and shockresistance. Environmental tests include heatstability; cold endurance; exposure totemperature changes and resistance tohoarfrost and dew after thawing.When tests

are performed, they need an independent testspecimen (Table 1).

In terms of polar equipment tests, there are

two environmental conditions, which arenormal environmental conditions and standardenvironmental conditions. In general, standard


Table 1. Type of test specimen

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TECHNOLOGY- ICE CLASS

environmental conditions should be followed when the test isperformed but if that is not possible then normal environmentalconditions can be followed.

Test example Test procedures for vibration resistance & resonance are below.

If the resonant frequencies, or multiple resonant frequencies are

generated, the test should be performed in each frequency for twohours. If there are no resonant frequencies, the test should follow asshown below in Table 3 to check production defects.

In conclusion, in terms of the Polar Code, new standards ofequipment tests & assessments are necessary. This requires co-operation between governments and manufacturers. In light of this, theKorean Register said that is developing the relevant robust proceduresand technical skills to enable its customers to comply.

NSR law passedMeanwhile, a new law regarding the Northern Sea Route (NSR),adopted by Russian legislators in July, did not include Murmansk andthe Barents Sea.

According to Ria Novosti, the law states that the route to the westofficially stretches from the eastern coast of the Novaya Zemlya, theKara Gate and the straits between the mainland and the island ofVaigach. To the east, the route includes the areas from the Russian-USsea border and the latitude of the Cape Dezhnev, the easternmost pointon Russian territory.

Consequently, the regulations do not include the Barents Sea and the

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Table 2. Test procedure for Vibration resistance & Resonance

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Pechora Sea, areas, which are expected tosignificantly grow in shipping and industrialactivities over the next few years. BothMurmansk and Arkhangelsk, Russia’s twomain Arctic cities, are located outside the newdefinition of the Northern Sea Route territory,the agency reported.

The new law, which was adopted by theRussian State Duma in a third reading at the

beginning of July, will come into force in2013.

Among the rules for vessels operating in thearea are new insurance requirements, whichare meant to address shipowners’responsibility for possible environmentaldamage and pollution. The law also outlinesthe level of shipping fees, although not set instone, saying that the rates on icebreaker

assistance will be provided based on the“extent of the services offered.”

Included in the law is the establishment of anew Northern Sea Route administration, whichis to manage icebreaker and sailing Masterservices, as well as to provide radiocommunications and hydrographicinformation, organise search and rescueoperations and prepare meaures for emergencysituations. According to information websiteBellona.ru, the Russian Finance Ministry isallocating RUB27 mill (€660,000) for the newadministration.

The new law is a long-awaited and much-needed piece of legislation, the agency said.However, critics say that it does not addressthe environmental challenges in the vulnerableareas sufficiently.

According to Igor Kudrik from the BellonaFoundation, a major oil spill in the remotearea will have huge environmentalconsequences for nature, and financialconsequences for the shipping company. “Ifthe shipping operators are to bear all costsrelated to spills, the route might ultimately not be so popular, after all,” he told RiaNovosti. TO

Equipment needs to be up to the rigours of a harsh environment. Photo credit - VIKING.

TECHNOLOGY – ICE CLASS


Driving Arcticshipping development

The need for Arctic rules and regulations was clearly illustrated by a recent statementfrom Russian Prime Minister Dmitriy Medvedev who said that the Government expected

an 8 trill ruble economic effect from the development of its continental shelf by 2030.

“On the whole, the economic effectshould amount – the figures are verytentative – to 8 trill rubles. The socialand economic effect, or an indirect

effect, is over 1.1 trill rubles,” Medvedevadded.

The Government said that it expected oilproduction on the shelf to grow five by timesand gas output to increase by four times by2030.

“Annual oil production on the continentalshelf is to increase to 66.2 mill tonnes by thetime the programme ends. Let me remind youthat in 2011 it was at 13 mill tonnes. Gasdevelopment will amount to 230 bill cu m,while in 2011 is stood at 57 bill cu m,”Medvedev said.

Thus far, only two of Russia’s state-rungiants Rosneft and Gazprom are permitted toexplore the shelf, which is claimed by Russianministers to be insufficient.

Economic Development Minister AndreiBelousov said the projected oil output is toomodest. “Given Russia’s total planned oilproduction of around 510 mill tonnes … andgiven the fact that some oil is already beingdeveloped on the shelf, it means that in 20years - from 2020 to 2030 - the shelf’scontribution to the overall oil production willamount to less than 10% of the total output …This is very little,” he said.

Belousov also said the programme shouldoffer a cost recovery mechanism for privateinvestors. At present, if a private firmdiscovers reserves on the shelf, it must forman alliance, or a joint venture with Rosneft ofGazprom.

“It is obvious that such a mechanism createshigh risks for investors, because it is unclearwhether a state–run company will agree toparticipate, and at what price… This is whythere must be a mechanism to cut those risksfor investors,” Belousov said.

Energy Minister Alexander Novak hasoffered holding tenders to attract private

investors to the shelf development. He addedthat the current tax system does notsufficiently help with investments into newdeposits, however, tax adjustments are to beprepared by October.

Medvedev appointed Deputy Prime MinisterArkady Dvorkovich, who chairs a governmentenergy commission, to lead the shelf’sworking group. Dvorkovich offered to adjustthe programme within the next two to threemonths.

NSR transits upMeanwhile, more vessels are due to completeNSR transits this year. Vessel numbers haveincreased to about 34 in the three years thatthe route has been promoted as a short cut toand from Asia, shipping 800,000 tonnes ofcargo, which included oil, condensate and ironore. Local sources thought that the cargo couldtotal 1.5 mill tonnes this year.

Rosatomflot, the Russian state-ownedoperator of nuclear icebreakers said that ifconditions remain favourable, the season couldlast until November.

Among the vessels registered to sail fromEurope to Asia is the LNG Ribera del DueroKnutsen, the world’s only ice-class 1A LNGvessel. Lloyd’s List reported that it had beenbooked to load a cargo of LNG at Snovit forJapan.

In the future, Russia’s independent oil majorNovatek said that it intended to use the NSRto ship LNG from the Yamal field when itcomes on stream, which could be as soon as2016.

Nuclear icebreakerTo cope with the extra traffic forecast,Russia’s Baltic Shipyard in St Petersburg is tobuild a 36.96 bill ruble ($1.15 bill) nuclear-powered icebreaker for Atomflot, theshipbuilder said, reported the RIA Novostinews agency

Atomflot, which operates Russia’s

commercial icebreaker fleet, announced anopen tender in late June for a 60 MWicebreaker. Baltic Shipyard was the sole bidderin the tender.

The icebreaker is to be delivered by late2017 and will be based at Murmansk. It is setto be floated out in November 2015, with seatrials due in August 2017 and ice trials inNovember 2017.

The vessel has been designed for operationsin the western Arctic and shallow water areasof the Yenisei River and the Gulf of Ob.

Ice breaker projectIn another move, the Russian MaritimeRegister of Shipping (RS) has signed acontract with JSC “Baltiysky Zavod -Shipbuilding” to review the technicaldocumentation on a new icebreaker design -Project 22600.

The technical documentation will bereviewed for compliance with the applicablerequirements of RS Rules, the provisions ofinternational conventions and thesupplementary requirements of the flagadministrations in force on the date of keellaying.

If the project comes to fruition, theicebreaker will take the RS class notation КМIcebreaker 8 [2] AUT1-ICS OMBO FF2WSDYN-POS-2EPP ANTI-ICE ECO-SHELIDECK-H WINTERIZATION (-40)Special purpose ship.

The vessel’s keel laying is scheduled forSeptember 2012 with delivery scheduled for2015.

The state customer under the contract is theFederal Agency of Marine and RiverTransport, the developer is the Federal StateUnitary Enterprise ‘Rosmorport’.

There is no doubt that the cost of icebreakerassistance will be the make or break of theNSR for owners and operators.

Leveraged too high and owners/operatorswill revert to the more traditional routes,except those using Arctic ports. TO



Help available forforeign vessel NSR

transitsWilhelmsen Ships Service (WSS) is also helping clients execute voyages through the

Northern Sea Route (NSR) as this new trade lane begins to open up new opportunities for shipping.

WSS is working with RussianArctic shipping specialistRosatomflot to provideicebreaking assistance and has

developed a programme to assists clients withtechnical, legal and insurance preparationsthey must satisfy to make the journey safely.

The NSR is currently open between 1st Julyand 1st November, cutting the journey time onan Europe/Asia voyage from 34 days to 22days. This has the potential to providesubstantial savings in fuel consumption andemissions, as well as hastening thedevelopment of oil and gas reserves in theArctic, WSS said.

WSS Ships Agency service manager EivindJespersen said: “Our experience is that manyshipowners are closely following thedevelopment of the NSR. Until now they havebeen reluctant to pursue this interest until theirconcerns are resolved. WSS Norway inpartnership with WSS Russia is able to offerexpert advice and assistance necessary tomake voyages through the NSR a reality.”

Summer sea ice levels on the route havedecreased about 12% over the last decade andthe warming climate ice could bring ice-freesummers by 2050, according to NorwegianPolar Institute estimates.

Russia is promoting the NSR as analternative to routeing vessels through thePanama, or Suez Canals and its government ispreparing regulations for foreign comercialvessels with the corresponding law expected tobe approved by Russian parliament this year(see page 55).

WSS expertise in the region is in the field ofnavigation conditions and practicalconsiderations for safe operations in the NSR.WSS has access to high quality meteorologicaldata from the Norwegian MeteorologicalInstitute for predictable ice conditions,including ice charts, edge positions and long

term weather prognosis.“The NSR is a new global route and comes

with significant challenges in terms ofnavigation but the risks can be managed bygood preparation,” continued Jespersen. “Werecommend extensive research and trainingprior to NSR voyages both on board and onshore. Highly competent crew in particularmakes a huge difference.”

The average cost for a single NSR passageis about 10% greater than a Suez canal transit,however this is negotiable for multipletransits. Each transit is considered a separateproject as to preparations, such as applicationfor permission to the Russian authorities,equipment and crew training, WSS explained.

Issues that owners need to be aware ofbefore navigating the NSR, includeamendments to the terms of their P&I and hulland machinery insurance cover. In addition,paper charts and publications are in Russianonly and ice pilots do not always speaklanguages other than Russian.

To make the journey, all vessels mustcomply with Russian rules for the NSR,including its guide and regulations for

navigation and pilotage, as well asrequirements for vessel design andconstruction, ice operations and knowledge oftariffs for icebreaking services. At present ittakes two to three weeks to get a ship acceptedto transit the NSR and the vessel nominatedmust be the highest, 1A ice class.

In terms of navigation experience, WSS saidthat the gyro compass remains stablethroughout the transit, but, as expected, themagnetic compass shows large magneticerrors. However, the GPS remains reliable andstable throughout the NSR transit.

Radar is a good aid to navigation but itslimitations in ice-detecting capability shouldbe kept in mind. X-band radar works betterthan S-band in these conditions, WSS said.

WSS said that it will act as agent only forprincipals requesting NSR transit and theprincipal will issue a letter of authorisation toWSS, which will negotiate the transit on theirbehalf.

WSS Russia operates from St Petersburg,while WSS Norway supports NSR transitsfrom its offices in Porsgrunn, Kirkenes andVardoe.

Sea ice concentration now availableon AWT websiteAs economic opportunitiesincrease in the Polar region,AWT is assisting its clients tooperate safely and efficiently inthe region.One way AWT does this is by providing seaice concentration information on thewebsite. AWT monitors multiple sources inorder to ensure the most accurateinformation possible is shown.

The data is derived from the National IceCenter (NIC) and the National Center for

Environmental Predictions MarineModeling and Analysis Branch, GeorgeSchlinkert, AWT’s vice president ofoperations said.

The data is therefore a combination ofremotely sensed sea ice concentrations,enhanced by analysts to incorporate alladditional available ice data.

The data is based on a five minutelatitude/longitude grid, which equates toabout one mile latitudinal spacing in thePolar region. This data is updated daily. �

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TECHNICAL FOCUS - COMPUTERS

MAN Diesel & Turbo is theleading supplier of two- andfour-stroke engines formaritime use. In recent years,

demand for electronically controlled B&Wtwo-stroke diesels has risen sharply togetherwith advanced control systems that managefuel injection and compression contribute tobetter fuel economy and reduced emissions.With the progressive tightening ofenvironmental requirements, shipowners arealso increasingly interested in installingelectronic control on board existing vessels.As a bonus, modern control systems alsofacilitate operation and maintenance by thecrew, including lubrication of the engines.

To prevent and avoid potentially costlyproblems, the engine control system consistsentirely of carefully selected, high-qualityelectronic components, such as computers.Vital functions are also duplicated.

Since the summer of 2011, Beijer’s robustindustrial computers have been used for the onboard systems. In the first six months, or sosince deliveries started, around 150 computersfrom the EPC series have been commissioned:“Without a single complaint,” stressed KennetPalm, head of hardware development at MANDiesel & Turbo, who is responsible for all thehardware used in the control electronics.

The EPC boxes are specially designed andmade for maximum reliability in the mostdemanding environments. Private PC buyersare mainly concerned with performance andlow price. The occasional ‘blue screen’ may beirritating, but it is not a major problem. It isquite different at sea – particularly on a largetanker.

When MAN Diesel & Turbo choosescomponents for its electronic control systems,reliability combined with a long service life iscrucial. “We build engines with a lifetime of30 years, which have to work day in, day out

in a tough maritime environment with all thatthis implies in terms of heat, humidity andvibration,” Palm said, emphasising thatnaturally, factors like purchase cost andwarranties are not irrelevant either.

A secure supply of products and spare parts,with ‘just in time’ delivery, is just as high onthe agenda: “To guarantee the supply ofcomponents, we made a decision at the grouplevel to have two, or preferably three,alternative sources for every key product thatwe need.”

The adoption of Beijer as one of very fewPC suppliers to MAN Diesel & Turbo was alengthy process. The EPC boxes were tested,methodically and very thoroughly, over a longperiod.

Niels Torres Engel and Thomas Lehnemann,who are responsible for research andreliability, left nothing to chance. For rigoroustesting, they have a small so called ‘torturechamber’ at their disposal in the company’sR&D division.

“Among the formal requirements, theproducts have to be type-approved by theleading maritime classification associations,”said Engel, explaining that, after thepreliminary screening, the different computersare installed in test beds to confirm theircompatibility, performance and quality.

Harsh environmentChecks are made to ensure that the computerswill still work in 70 deg C temperatures.Beijer’s EPC boxes met this challenge, as wellas the vibration and humidity tests. “By‘stressing’ the products, we pick up any faultsthat might not show up at first,” Lehnemannsaid.

Lehnemann also stressed the importance ofensuring that manufacturers do not make anysudden design modifications. Even minor

changes to components can affect theprograms running in the computer. “Weperform constant spot-checks to ensure thatthe equipment supplied is up to the mark andwe are in constant contact with our partners,”he said.

The partnership with Beijer is described byMAN as personal, relaxed and good. As Palmsaid, if communication with the suppliers isn’tworking, it doesn’t matter how good theproducts are: “We feel that our wishes arelistened to and we get all the help we need.”

Difficult customerEngel agreed, however, freely admitting thatMAN Diesel & Turbo could be described as a‘difficult’ customer: “Although we’re notbuying vast quantities of industrial computers,we are extremely fussy about the quality ofwhat we get. Not just that the collaborationworks well; it also saves time because all EPCboxes are supplied pre-configured.”

The computers supplied are ready to use outof the box. The operating system and therelevant drivers and programs are alreadyinstalled before delivery. If a control computershould fail, the crew on board can re-installthe operating system and programs.

This backup copy was previously held on aCD, but the mechanisms in the drives couldnot always cope with the vibration they wereexposed to. As a result, the companyintroduced the idea of restoring programs froma USB stick, which was a much more robustsolution. “It is a pleasure to work withsuppliers who suggest ideas that provide valueand inspiration,” concluded Palm, Lehnemannand Engel.

Beijer Electronics’ EPC series is currentlycertified by class societies ABS, BureauVeritas, DNV, Germanischer Lloyd, Lloyd’sRegister and the Russian Maritime Register ofShipping.

Quality requirementsdrive MAN Diesel &

TurboIt is no accident that MAN Diesel & Turbo uses industrial computers from Beijer

Electronics as human machine interface (HMI) for the company’s giant B&W engines,claimed the company.

TO

“

TECHNICAL FOCUS - PUMPS

Pump upgradereduces total cost of

ownership Despite the best intentions of shoreside superintendents under constant pressure to

reduce operational expenses and equipment downtime, the best pump systems are at riskdue to a lack of diagnostic information and sophisticated control systems.


The shortage of experienced crewand out-dated attitudes to pumpoperation undermine manager’sattempts further and the result is

needlessly high operation and maintenancecosts, increased downtime and frustration forall involved.

Energy costs account for 85% of the totalcost of ownership for ballast and coolingpumps, demonstrating the importance ofassessing total cost of ownership rather thanbasing purchasing decisions purely on initialcost.

The concept is just as relevantly applied toupgrade decisions, said Christian Martin,director, product management commercialmarine at Colfax. This means keeping abreastof technology and, as is often the case withpumps, recognising when old practices mustmake way for the new to achieve greateroperational efficiency and profitability.

“We have the technology to reduce theenergy consumed in pumping operations byup to 50% simply by enabling variable speedoperation,” said Martin. “Add intelligentdiagnostics and reliability goes up andmaintenance costs go down – dramatically.”

Colfax has unveiled ALLMIND, a concept

developed from a single leakage controldevice to become an intelligent conditionmonitoring and variable speed control unit.ALLMIND will protect a pump, maximisesefficiency, lower energy usage and lowermaintenance and spare parts costs, Colfaxsaid.

“Our primary goal”, said Martin, “is toprovide clients with a competitive edge byoffering cost-effective equipment. We keepabreast of technological developments andcontinually optimise and adjust theperformance of our systems to maximiseenergy efficiency.”

Pump protectionPushed by the growing technical complexityof new ships and cutting short the number ofexperienced and educated crew, theimportance of the total cost of ownershipconcept grows considerably.

The ALLMIND condition monitoringmodule has the ability to maximise systemavailability by providing component-specificinformation. This measurement of the healthof a pump by routine monitoring and analysisof data helps avoid unplanned downtime.

It detects early phases of damage to

mechanical seals through continuous leakagemonitoring and its vibration analysis modulemonitors mechanical oscillations andcontinuously compares them to thresholdvalues, thus detecting imbalance andthwarting any operational damage, Colfaxclaimed.

The vibration analysis module also monitorsbearing condition. ALLMIND analysesoscillation changes and signals bearing wearat a very early stage. Further, it is capable ofdetecting unusual levels of motor load.

“ALLMIND is a modular system using theright number of sensors to monitor the criticalcharacteristics of each specific pump. If aship’s system or processes change, you caneasily modify, or expand the ALLMINDmodules as needed. This modular approach isalso ideal for retrofitting of existing systems,”said Martin.

Maximise efficiency Traditionally, fixed speed operation usingthrottle valves has been the norm for pumpoperation for most ships. As process demandschange, the control valves are used to regulateprocess parameters. However, this practicechanges the frictional losses in the system and

We have the technology to reduce the energy consumed inpumping operations by up to 50% simply by

enabling variable speed operation.

”- Christian Martin, director, product management commercial marine, Colfax



as a result changes the system performancecurve. Rather than the pump being controlledto adapt to changing conditions, the system isbeing adjusted to achieve the required processdemand.

This type of process control can often leadto pumps being operated at flows outside ofthe operational limits (part load or overload)resulting in poor asset reliability, unsafeoperating conditions and higher energy and

maintenance costs, due to unnecessary highhydraulic loads and high impact to bearings.

Another adjustment possibility is operatingwith bypass control. In this way, the pumpswill operate continuously with constant speed

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ALLMIND benefits� Extends mean time between failures

ALLMIND is essential equipment to lengthen MTBF. Condition monitoring detects and identifies pump defects and mechanical seal damage at a very early stage. This is a major cost savings advantage.

� Minimises downtimeThrough effective condition monitoring, ALLMIND virtually eliminates pump downtime from unexpected component failure.

� Reduces operational costsThe elimination of unexpected downtime, reduction of repair costs and increased service intervals together with reduced and minimised energy consumption all lead to reduced life cycle costs. With ALLMIND, pumps can be run efficiently at decreased loads and speeds to reduce operating cost.

� Enhances product safetyMonitoring machinery on a regular basis reduces the chance of dangerous malfunctions that could endanger employees and the environment. Alarm levels can be set to suit individual pumps.

� Avoids disaster A ball bearing is a cheap component, quick and easy to replace and usually stocked on board. But if ware, or damage goes undetected, it could potentially cost a shipmanager thousands of dollars.

For example, a worn out ball bearing can cause impeller and volutecasing damage and a cracked pump shaft. If a particular pump is classified as part of the ship’s “essentialservice” machinery, the vessel may not leave port until the pump isfully operational and downtime at a port - depending on vessel typeand situation - can cost between $50,000 – $100,000 per day. �



and deliver constant flow. Any overcapacitywill be bypassed and thus unused, resulting ina considerable waste of energy.

It features variable speed drive control toenable the speed of the pump to be adjusted tomatch actual demand on a continuous basis.Its integrated PID controller and intelligentalgorithms control the speed of a pumpaccording to target parameters, such asvolume, pressure, or net positive suction head(NPSH) ratio with a simple frequencyconverter.

ALLMIND’s adjustable-speed drive moduleallows operators to fine-tune processes whilereducing costs for energy and equipmentmaintenance.

“Regulating the flow rate over a wide rangewithout harming the pump, ALLMIND’svariable speed drive application lowers totalenergy consumption, improves reliability anddecreases maintenance costs. Reduced pumpspeeds also lower overall system vibration andcan reduce noise levels,” said Martin.

Lower energy useMost ship machinery is designed at speeds andlevels to comply with worst-case scenarios.

This results in larger dimensioned systems andincreased energy consumption of which inmost cases, is unnecessary.

For example, a ship’s cooling system –when operating in the Caribbean, mustperform sufficiently to meet the maximumcooling demand of high fresh watertemperatures caused by multiple pieces ofmachinery operating concurrently. Full speedoperation of pumps and coolers are necessaryat this time. But this situation - depending onship location – seldom, if ever, occurs.

“The majority of a pump’s lifetime andvessel requirements are much lower than thesystem design point. Reducing pump motorspeed grants major cost saving advantages,”said Martin, citing the example that a 20%speed reduction in an electrically drivencentrifugal pump cuts energy consumption byhalf.

“Savings of up to 50% and more can beeasily realised with ALLMIND. The paybackperiod for the installed equipment can be evenless than one year,” he claimed.

Lower maintenance Total cost of ownership is the best, most

accurate way to match a performance class toan application. In heavily loaded pumpapplications - where heat, wear and fluidscontribute to pump fatigue, premature bearingand seal failure - costly maintenance andexpensive downtime is a major threat.

At the heart of global sea transportation,shipping counts on reliable and efficientpumping systems. Colfax said that itunderstood the importance of safety andreliability in shipping and has developedALLMIND as a high quality solution tominimise marine pump disruptions andmaximise the safety of this process. Further, itenables shipmanagers to plan service inadvance and achieve significantly longermaintenance intervals.

“We have evaluated all costs, direct andindirect, incurred throughout the life-cycle ofpump assets including acquisition andprocurement, operations and maintenance andend-of-life management. ALLMIND is a major total cost of ownership enabler: itprovides critical component information andearly warning of system failure,” Martinconcluded. TO


TECHNOLOGY - TANK SERVICING

The new SOLAS Regulation II-1/3-11 adopted by ResolutionMSC.291(87) requires that allcargo oil tanks of crude oiltankers shall be coated duringconstruction, or protected byalternative means of corrosionprotection or corrosion resistantmaterial. However, following proposals raised by otherorganisations, it was agreed that anadministration may exempt a crude oil tankerfrom the requirement if the ship is built to be

engaged solely in the carriage of cargoes andcargo handling operations not causingcorrosion.

Intertanko pointed out that IMO guidelineshave subsequently been issued inMSC.1/Circ.1421. Criteria to be used whenconsidering such ‘benign crude oils’ haverequirements related to H2S, temperature,water content, salt content and acid number.

When all conditions have been satisfied andthe exemption procedure followed, anadministration may issue an exemptioncertificate in addition to the Cargo Ship Safety

Construction Certificate, or Cargo Ship SafetyCertificate.

Should a vessel switch from one benigncrude trade to another, a new approval forexemption must be obtained.

Compliance warningOf particular note is that in the event that avessel ceases trading with benign crude only,the cargo tanks will need to be brought intocompliance with SOLAS regulation II-1/3-11before being allowed to trade with non-benigncrude oils, Intertanko warned. �

IMO guidance on corrosion protection andbenign crude oils

KARCO, the 3D animationspecialist for marine safetyvideos, has released ‘EnclosedSpace Entry- And One MoreTragic Casualty’.

The company said that this video digitallydepicts a real time marine accident, whichresulted in the loss of a seafarer to the dangersof enclosed space entry. The video uses thepopular ‘James Reasons Cheese Model’ forinvestigation and is focused on humanbehaviour based responses to look at thecorrective actions.

KARCO said that it had shifted the currentformat’s focus from system friendly to content

intensive and, as a result, the videos areappreciated by the shipboard junior crew whoform the major barrier against any accidentoccurring.

Not underestimating the importance ofassessment based modules, KARCO will soonrelease a CBT-based assessment model. Thiswill carry a risk quotient, thus adding adimension to analysing the CBT test results ofthe assessment. This will supplement thecurrent method of training by DVD, which canbe used effectively for collective viewing andgroup discussions.

KARCO offers videos with Chinese,Turkish & Russian subtitles. More languages

are being planned in the near future. Thecurrent library of 18 titles is constantly beingexpanded with more videos planned, thecompany said.

Various services have been offered to thetanker sector down the years, including: � Oil/chemical tanker operational

consultancy.� Tank cleaning superintending for chemical

tankers.� Pre-vetting & audits for tankers, including

chemical tankers.� Specialised services - chemical cargo

salvage. �

KARCO adds enclosed space entry video

Bilge level switches – never compromise onsafetyBilge level switches are a safetycritical component for thedetection of liquid in dead spacesand voids that are rarely visited,or inspected by the crew. They need to be able to withstand years ofinstallation in difficult environmentalconditions, yet operate immediately andreliably should a rising liquid level indicate aleakage or flooding hazard.

When considering products such as these, itwould be easy for a shipbuilder, or owner totry and make economies by using cheaperdevices, often constructed with poor qualitymaterials and construction.

One company that has always argued thatthis approach both comprises safety, and is afalse economy, as maintenance and

replacement costs will always exceed those ofinstalling ‘the right device first time’, is PSM.

The company said that the PSM BLS 9200bilge level switch is designed, manufacturedand approved to meet and exceed therequirements for severe service applications onall classes of vessels.

Key benefits that the BLS 9200 is claimedto offer are:� Rugged all-stainless steel design with EPR

cable resistant to seawater, fuel oil and hydraulic fluid ensures reliable operation over years of service.

� Compact in size with a mechanical mounting using a two-bolt mounting bracket means that installation and commissioning is simple and fast.

� Self-draining cage design prevents fouling

of the float and interference with operation from obstructions or floating debris in the bilge, as well as protection from false-switching.

� Integral switch test lever allows full testing of the float movement and switch functionality ensures routine safety tests can be carried out for peace-of-mind.

� Normally-open or normally-closed operation and user-selectable cable lengths ensures the BLS 9200 can be quickly delivered against each customers exact requirement.

Many major shipbuilders also agree with thePSM ‘safety first’ message and now specifythe BLS 9200 as standard fitment for all theirnewbuild and refurbishment projects, thecompany said. �

TANKEROperatorTANKEROperator

Speakers:

Martin Shaw, managing director, Marine Operations and Assurance Management Solutions Ltd, ex-VPtechnical, fleet manager and vetting service manager, BP ShippingDimitris Lyras, director, Lyras Shipping and founder, Ulysses Systems (chair)Emmanuel Vordonis, ex executive director, Thenamaris Ships ManagementMads Friis Sørensen, branch manager, FURUNO European Branch OfficeTakis Koutris, managing director, Roxana Shipping and chairman, Marine Technical ManagersAssociation (MARTECMA)Captain Andreas Xapolytos, CEO, Tsakos Columbia ShipmanagementGeorge Vassiliades, commercial manager, Tsakos Columbia Shipmanagement

Download videos and presentations from ourApril 3rd 2012 Athens Conference

“Making money in a toughmarket”

at http://www.tankeroperator.com/toathapr2012.shtml