Salvors warn of an increase in major casualties


Leading international salvage companies have raised deep concerns over an anticipated rise in the number of casualties at sea as safety and vessel maintenance dwindles as owners and managers look to cut costs across the board. This, they claim, is sparking alarming levels of operational risk.

“An increase in casualties will take place because of the financial constraints in the market. However conscientious an owner, operator or manager is, he’s naturally going to cut corners, he has to, and this is a definitive cut back in safety,” warned George Tsavliris, Prinicipal of the Tsavliris Salvage Group.

Growing concern for industry standards has arisen off the back of last year’s boom period, characterised by a vessel spending-frenzy and record-high freight rates as the wealth and excess liquidity drowned the world economy in a glut of shipping assets and capital. However, with a flip-reverse of the markets, cost-cutting is the name of the game, and standards of quality, safety and maintenance are set for a significant drop.

Joe Farrell, Jr, President of US Salvage company RESOLVE Marine, added: “Even when shipping is reduced, significant activity continues and the sea remains an unforgiving environment, whereby even ships in lay-up are vulnerable. When companies are forced to make tough financial cut back decisions the areas that are usually impacted are a reduction in training, and maintenance.

“Despite the fact there may be fewer vessels at sea during a prolonged depressed period, an upturn in the amount of vessel casualties is definite. Vessel owners and operators must not look at a false sense of savings by making these aforementioned cut backs, even if it means laying up additional vessels in order to maintain the greatly improved standards that the industry has been able to attain,” he added.

Mr Tsavliris added: “Another major element in today’s market is that there are a lot of substandard ships coming out of yards. In the prime of the market, ship owners would go to China to buy, but you just can’t compare a Chinese-built ship. They build them very quickly but they’ve got inefficiency and inexperience in shipbuilding and electronics.

“There are a lot of modern ships of just two or three years old which are breaking down with gearbox problems, engine problems and all kinds of technical issues – we’ve had two or three casualties in the last few months which involve ships of less than two years old. If you pay peanuts, you get monkeys. If you pay less for a ship being built in China than you would elsewhere, that may not necessarily reflect the quality of the ship, it may reflect on the quality into which you are buying in the longer term,” he added.

Supplementing the greater risk of casualty as a result of slackened quality, a previously escalating newbuild order market has been hit by a flurry of cancellations, but in spite of this, the world fleet is still set for significant expansion over the next few years, intensifying traffic volumes and heightening the risk of accident.

Mr Tsavliris said: “At least 75% or current newbuild orders will still be delivered. If you look at that statistically, appreciating that within the existing fleet there are approximately 250 casualties in a year, more casualties will occur because there is a substantially higher number of ships. There will also be increased traffic, so a proportionate rise in casualties is inevitable.”