Challenges

1
Challenges Opportunities for Marine
SurveyorsNew Build Issues
2

• Never have so many ships been built in such a
  short space of time

3

• Hull and PI insurers starting to become nervous
• We all like to insure new ships but at what
  price
• Are we storing up problems for the future

4

• Third party advice has never been more important

5
China

• 2008 over 1,930 yards
• 832 new licences (total 5,800)
• Yards regionally controlled not centrally
• Entrepreneurs
• Government publicly encouraging
• Deposits already taken (yards dont exist)
• Government now will not allow deposits to develop
  new yards so entrepreneurs now taking out loans
• Likely that these ships will never be built as
  yards will fold

6
Experience

• Zhejiang/Fujian Provinces (South Ningbo)
• Started building 3,000 tonne ships moved up to
  8,000 then 15,000 now 30,000 in very short time
• Some ships being built by sub contractors who are
  hiring space in yards and bringing their own
  people in

7
State Yards

• Expanding Quickly
• Just because they have produced good ships in
  past no guarantee for future
• Labour moving on to to fuel expansion
• Tea breaks everyone on their mobiles talking to
  their agents !!!
• Huge demand on class societies to hold training
  courses for trainers, ie teaching the yards about
  class rules/metallurgy !!!!

8
Shortage Materials

• Steel is starting to become difficult to find
• Second hand steel now being used ?
• State yards in good position what about others
  though?
• Stories about falsification of steel quality
  certificates, low quality steel getting through?
• Welding procedures suspect?
• Huge pressure on materials

9
Coatings

• 85 humidity in southern China for parts of year,
  many yards dont have paint shops,
• Coatings very expensive these days, breakdown in
  two three years if coating not applied correctly
  ?
• In some yards offering paint shops, looking at
  orders and throughput, it is clear, although
  advertised, controlled humidity coating will not
  happen

10
Ballast tank coating
11
Quality Control

• Reportedly yards add a premium if owners use
  certain societies ?
• Reportedly cheaper to use certain societies for
  construction then change ?
• Some societies are high on PSC target lists
• One surveyor looking after multiple builds ?
• Remote yards - Weekly/monthly visits by Class ?
• Where are all the class surveyors coming from ?
• How do we know what standards ship built to ?
• Oil majors compiling list of ships built at yards
  that not acceptable, rumour has they wont charter
  these vessels.

12
Engines

• Not enough slow speed diesel engines for ships
  presently on order ?
• Joint ventures presently being set up to cope
  with this, but how long does it take to set up a
  new manufacturing plant.

13
Asset Play

• Building slots taken up by people no intention of
  trading the ships
• Little interest in quality control, little
  supervision, local material
• 60 of new builds are now re sales
• Ships built and owned by shipyards operated for a
  year, re registered, re classed then sold as a
  going concern.
• As more owners default this will increase

14
Existing Yards in Area Japan/Korea

• Design departments dramatically down in numbers
• Reluctance to modify designs anymore as no
  manpower
• Ageing workforce
• Market pressure from China
• Not first in line for steel anymore
• Trading Houses sold Japanese yards off several
  years ago they now have to fend for themselves
• Sunset industry in Japan
• Korean welder on 67,000 usd a year, more than US
  welder - Korea not cheap have to compete in
  other ways now

15
Examples of quality issues

• Mild steel bolts substituted for stainless steel,
  individual bolts sold at yard gate
• Pipe line plans not followed easiest route for
  individual taken.
• Lifeboat davits which will not swing out
• Navigation lights in wrong position
• Crane toppled off pedestal on first load
• Hatch covers leaking on first voyage ship had to
  put into Singapore to effect repairs
• D shackle on side hatch cover chain parted whilst
  closing hatch cover chain ripped ABs arm off.
  Ship 3 months old
• Electro/hydraulic valve failed in full cargo
  tank, manual valve could not be used as spindle
  to deck level not in place.
• Poor quality lagging, badly fixed (ancilliaries)

16
Oil Tanker 2,260 gt - Survey 2001

• Example of deficiencies
• Engine built 1991
• Purifiers suspected second hand
• Lifeboats second hand
• Asbestos used in fuel pipe insulation
• Old second hand steel sections used in internal
  framing
• Frames welded from one side only in places
• Pipe penetration through w/t bulkheads only
  welded from one side

17
Hatch covers built 2007

• Found during testing in yard
• Fore panel closed very slow with some vibration
  noise
• Operation stopped as the port roller axial
  deformed and the roller veered to one side

18
Valve above sewage unit 4 months into operation
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Fuel Oil Blending Unit
Oil leaks ?
Plastic hose for drainage
20
13000 DWT Bulk Carrier
Mild steel elbows welded onto galvanised steel
pipes
21
Seawater coolers
22
On site welding back side root formation/coating ?
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Problems for PI

• Coating
• Coating could peel off and contaminate cargoes
• Cargoes could get behind coatings and contaminate
  future cargoes
• If coatings fail owners will need to touch up on
  continous basis they wont be able to coat to new
  build standard whilst in use
• Steel detioration in inaccessible areas
• Components (Auxiliaries)
• Yards sub contracting out these people sub
  contracting again lack of control. Equipment
  failure like cargo pumps ,cranes etc could cause
  liability claims
• Inferior steel
• Bulkhead failures especially when ship is abused
  during loading
• Pipe failures, ballast bilge etc ?
• Hatch cover leakages ?
• Crane failures

24
Conclusion

• Certainly challenges for surveyors in assessing
  risk for these new vessels and for those
  supervising their construction Will they have
  good liability cover when claims come home to
  roost
• But certainly opportunities in assisting the
  market in determining if incidents are arising
  out of poor workmanship
• Early days but undoubtedly we will see an
  increase in ship failure claims