Peter M' Swift, BIMCO Beijing 2001

1

• Peter M. Swift, BIMCO Beijing 2001

2
IMAGE PROBLEM ! The Rogues of the Tanker Industry
CHARTERER
OWNER
CLASS
3
BUT EVEN WORSE IMAGE !
SHIPBROKER
4

THE TANKER INDUSTRY
Q
uestforuality
5
THE TANKER INDUSTRY Quest for Quality

• Overview
• Perception and Image
• Reality
• Way Ahead

6
Tanker industry Oil by sea
32,000,000 barrels of crude oil delivered every
day
9,000,000 barrels of oil products delivered
every day
7
Tanker Industry Overview
Seaborne Oil Trade and Middle East Oil
mbd
'000
production
bil tm
24
12
Middle East Oil Prod mbd
11
20
10
9
16
8
7
Tonne miles
12
6
5
8
4
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
8
Tanker industry Perception
Courtesy G. Bond
9
Tanker industry Image
10
Tanker Industry Reality
Tankers Incidents
800
Miscellanous
Fire, explosion
700
Contact
600
Wrecked/stranded
Collision
500
Hull, machinery
400
300
200
100
Source LMIS
0
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
Source LMIS
11
Tanker Industry Reality
Age profile tankers above 10,000 dwt
Years
16
Tanker incidents
14
12
Total fleet
10
8
6
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
Source INTERTANKO, LMIS
12
Tanker Industry Reality
Billion Tonne
Tanker Accidental Oil Spills and Trade
Number
miles
40
12000
Others
35
LoadingDischarging
10000
FireExplosions
30
Hull
Grounding
8000
25
Collision
Tonne-Miles
20
6000
15
4000
10
2000
5
0
0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
Source ITOPF
13
Tanker Industry Reality
14
Tanker Industry Reality
Nominal Arabian Light
Deflated Arabian Light
Nominal freight rates
Deflated freight rates
Source INTERTANKO, IEA
15
Tanker Industry Reality
Source INTERTANKO
16
(No Transcript)
17
Tanker industry Responsibility Chain
SHIPOWNER
CLASS SOCIETIES
CHARTERER
SHIPYARDS
CARGO OWNER
INSURERS
PORT AUTHORITIES TERMINALS
FLAG STATES
PILOTS
18
Tanker Industry The Weakest Link
THE TANKER INDUSTRYIS AS STRONG AS ITS WEAKEST
LINK
19
Weakest link Consequences of Failure
Tanker Industry Reality

• Credibility with stakeholders damaged

Weaknesses in system exposed
Political Intervention/ Regulations instead of
Self Correction
20
Legislation Potential Downside
Tanker Industry Reality

• Liability Discourages
• Draconian, unlimited - Responsible, good
  operators
• Criminal - Openness,
  no-blame reporting
• Regulation Discourages
• Finite Life Sound
  investments
• Detailed Technological
  improvements
• Legislation Discourages
• 2nd opinion Responsible primary
  parties
• Unilateral International
  regimes

21
Quality shipowner
To deliver QUALITY SERVICE need to have

• QUALITY CONSTRUCTION
• QUALITY MAINTENANCE
• QUALITY MANAGEMENT
• QUALITY OPERATIONS

SAFE RELIABLE RESPONSIBLE
22
Action Plan for Quality

Owners

• Increase Transparency
• Listen to technical and operational departments
• Recognise and appreciate the value of good crews
• Seek alliances and greater co-operation
• Work with class as a partner

Class

• Improve the overall Quality Assurance system
• Tighten the IACS membership criteria/raise the
  game of weakest members
• Develop /enhance early warning systems
• Eliminate detrimental competition for new
  construction
• Apply IACS Unified Requirements and develop UR
  for scantlings
• Increase corrosion margins / review coating
  requirements
• Implement rational and unified fatigue life
  methodologies

23
Action Plan for Quality

Builders

• Establish feedback mechanisms for in-service
  experiences of structures
• Guarantee the ship its systems through to first
  Special Survey

• Be consistent in chartering practices
• Resolve issues surrounding use of oil company
  approvals
• Value relationships with ship-owners to protect
  shareholder interests
• Pay up promptly

Charterers /Cargo owners
Flag States

• Implement and comply fully with all IMO
  requirements
• Terminate the charade and exit where not able to
  perform

24
Action Plan for Quality

• Develop uniformity and consistency within and
  across all MoUs
• Improve targeting of sub-standard ships /
  incentivise quality operators
• Name the charterers of detained vessels
• Be more objective in reporting and detentions
• Improve standards reporting of terminal and
  navigational information
• Establish (better) Vessel Traffic Systems and
  Reception Facilities

Port States / Terminals
Pilots

• Establish international standards for training
  and licensing of pilots
• Improve Master-Pilot interface
• Increase transparency and accountability

25
Action Plan for Quality

Insurers

• Use actuarial knowledge to differentiate on
  quality

• Focus on implementing existing regulations
• Only act after full investigation and analysis of
  incidents
• Recognise the responsibility of all industry
  players to achieve success
• Avoid rush to implement criminal liability
• Resist parochial solutions

Legislators
Brokers

• Join the drive for improved quality across the
  industry

26
TO IMPROVE QUALITY ACROSS THE TANKER INDUSTRY
REQUIRES GREATER

• Understanding of Marine Risks
• Recognition of Professionalism
• Learning and Feedback Mechanisms
• Investigation before Regulation
• Openness and Trust
• Accountability

27
Quality Quest Invitation