Tuesday, February 19, 2019
Costa Concordia

The International Salvage Union (ISU) is the global trade association representing marine salvors, its members provide essential services to the world's maritime and insurance communities.

Members are engaged in marine casualty response, pollution defence, wreck removal, cargo recovery, towage and related activities. The principles of salvage and salvage law have evolved over many centuries.

The ISU Marine Journalists Lunch is one I try to attend each December to hear an update from the ISU President on the state of the salvage industry. On December 4th 2017, I was unable to attend the ISU Press Lunch due to a spot of ill health, but felt it was well worth reporting on the President's remarks. The President of the ISU is Charo Coll who was elected at the AGM in Singapore on September 2017 succeeding John Witte who continues as a member of the ISU Executive Committee. Speaking at the Journalists Lunch, President Charo Coll said:

"The first thing to say is that the salvage industry has experienced a major drop in gross revenues in the last 18 months. The latest statistics are from 2016 and they show that ISU members’ income from emergency response and wreck removal was US$380 million - that is a reduction of nearly 50% on previous years [2015 = US$ 717]. We need to wait several months before the 2017 numbers are collected and it will be interesting to see if 2016 was unusual or the start of a trend. Naturally, all the salvors in the room hope that the drop in revenue will be reversed.

Despite this difficult picture we think that the salvage sector is resilient and is still a vibrant industry ready to offer vital services to shipowners.

I would like to say something about the state of the Lloyd’s Open Form salvage contract. It is well known that the use of LOF has declined steadily over the years. The number of LOF cases that realised revenue for ISU members in 2016, was just 34, its lowest level for many years and produced an average reward for each case of about US$2 million.

This year the number may be over 50 but we know that the days of more than 100 LOFs each year have gone. But ISU still considers LOF to be the best contract in many emergency response situations. It has such great benefits including speed and the key fact, often overlooked, that the salvor carries all of the financial risk and the owner and insurer pays nothing until the job is successfully done.

There are many theories about the decline of LOF including increased competition among salvors and oversupply of contractors in some locations. There is also a large amount of capacity available from the under-utilised offshore sector. It means salvors may be more prepared to work on commercial terms just to secure the work. But there also seems to be a determination by some shipowners and their hull underwriters - especially in Northern European shipping markets - to avoid using LOF contracts and, if a LOF contract is used, in some cases to require the use of “side letters” and agreements.

It is ISU policy to support the use of the Lloyd’s Open Form salvage contract in its un-amended form. The effect of these amendments might be, for example, to "cap" the salved values or to agree to calculate the award based on tariff rates. The salvor still carries the same amount of risk but for a reduced reward and that is not fair. An idea being considered is to make it compulsory for any side agreement to be reported to Lloyd’s when it is notified of the LOF."

More on this and other news in Sea Breezes Magazine - February 2018 Issue
Click here to subscribe

Subscribe Graphic
Stad Amsterdam

Most Popular

  • 1
  • 2

Top Ten Books and DVDs of 2018

Latest Products

Maritime Log

  • RNLI Help Save Historic Boat from Sinking +

    Cervia The Ramsgate harbourmaster Rob Brown had to call the Ramsgate RNLI Lifeboat Station for help to prevent the historic tug Read More
  • Conservation of World's Oldest Lifeboat +

    Zetland For only the third time since she arrived in 1802, the famous lifeboat Zetland has left her home town of Read More
  • Liverpool Praised Over Handling of Special Metals Cargo +

    Port of Liverpool The Port of Liverpool, part of Peel Ports, has been praised for the efficient way it handled a new primary Read More
  • Rolls-Royce in Fully Autonomous Ferry Trials +

    Falco Control Room The world's first fully automated ferry has been demonstrated by the UK technology giant Rolls-Royce and the Finnish state-owned ferry Read More
  • New Teeside Port Handles Fertiliser +

    Teeside Port The contract for the design and build of the port handling facilities on Teesside for Sirius Minerals Plc, owners of Read More
  • 1
  • 2
  • 3

North America

  • Switching On at Vancouver Terminal +

    Vancouver Power Large ships berthed at Vancouver, Canada, can now switch off their diesel engines and connect to an electrical grid ashore Read More
  • First of Four New Ships for Hawaii Service +

    Daniel K Inouye The first of four new ships for the US container line Matson Inc arrived at Hawaii on her maiden voyage Read More
  • Special Anniversary Of Wartime Victory Ships +

    American Victory This month marks the 75th anniversary of the completion of the first of the famous Victory type standard ships built Read More
  • All Crew Rescued as Liftboat Takes on Water +

    RAM XV111 All fifteen people were rescued from a listing self-propelled self-elevating jackup platform, known in the US offshore industry as a Read More
  • Imports Up but Exports Fall in China Trade War +

    Port of Long Beach For the second year running, the Port of Long Beach, California, has broken its record for the volume of cargo Read More
  • 1
  • 2
  • 3

Asia-Pacific

  • "Intelligent Bulk Carrier" Enters Service +

    Pacific Vision What is claimed to be the world’s first ‘intelligent very large ore carrier’ has been delivered to the China Merchants Read More
  • Port Expansion Given the Federal Go-Ahead +

    Port of Cairns The Australian Federal Government has given the final environmental approval to the Cairns Shipping Development Project which aims to attract Read More
  • Five Year Contract for Harbour Towage Services +

    Smit Lamnalco Tugs The Rotterdam-based marine services provider Smit Lamnalco has won an exclusive licence from the Gladstone Ports Corporation in Australia to Read More
  • Tabletop Drill Checks Staff's Response +

    MOL Emergency Control Headquarters A simulated collision - known as a tabletop drill - involving a LNG carrier and a fishing boat in Japanese waters has Read More
  • The Future of Ships to Come +

    NYK Ship The major Japanese shipping group Nippon Yusen Kaisha (NYK) has come up with a new concept of how a ship Read More
  • 1
  • 2
  • 3

Naval Focus

  • Brazil to Take Over HMS Clyde +

    HMS Clyde British News It has been announced by the Brazilian Government in early December that the Falklands Patrol ship HMS Clyde Read More
  • Navy And NASA Complete Recovery Test +

    USS Anchorage American News In what might be seen as a return to the heady days of NASA’s Apollo moon program, the Read More
  • F-35s Touch Down on HMS Queen Elizabeth +

    HMS Queen Elizabeth British News Many people never thought they’d see it happen, but F-35B Lightning II Joint Strike Fighters have finally flown Read More
  • Sea Trials Recall for Zumwalt-Class Destroyer +

    USS Michael Monsoor American News The Zumult class destroyer USS Michael Monsoor was in dockyard hands at Bath in Maine for the removal Read More
  • HMS Albion Proves Big in Japan +

    HMS Albion British News The assault ship HMS Albion, at time of writing, had just completed a five day visit to Tokyo Read More
  • 1
  • 2
  • 3

Ferry World

  • Ferguson's Woes +

    Glen Sannox It is depressing to follow the sad story of ferry building in the UK, especially involving Ferguson at Port Glasgow Read More
  • Irish Moves to Beat Brexit +

    WB Yeats The major new vessel for Irish Ferries, delayed at the Flensburg builders, is at Dublin and very impressive she looks Read More
  • Appledore's Legacy +

    Clansman The impending closure of the Appledore Yard is another loss of merchant ship-building capacity even though its bread and butter, Read More
  • New Builds for Stena +

    E-Flexer RoPax The first three of the large ro-ros on order by Stena, from the Avic Co’s Weihai yard in China, are Read More
  • Tragedy in Tanzania +

    Nyerere A country well used to tragedy, saw another, on Lake Victoria in September. Read More
  • 1
  • 2
  • 3

Sail Review/Coastal Comment

  • Gravesend Tankers +

    Forth Fisher On a recent visit to Gravesend just before Christmas, I witnessed a parade of tankers of various shapes and sizes. Read More
  • All Change at Sea-Change +

    Cambria Since she was rebuilt in 2011, the mulie barge Cambria has been based in Kent, but in September, after her Read More
  • Kaskelot Becomes Le Francais +

    Kaskelot At the end of the Southampton Boat Show in September, the barque Kaskelot, which had been on display, was sold Read More
  • Brexit Impact on Ports and Cars +

    CIty of Amsterdam I am amazed the port industry has not made more thorough and timely comments about the potentially negative impact of Read More
  • Barge Race Review +

    Edme Apart from the Whitstable Harbour Barge Race, all the other barge races have a yearly points system that counts up Read More
  • 1
  • 2
  • 3

From the Lookout

  • Griffon Hoverwork Launch Latest Model +

    995ED The world's leading hovercraft builder Southampton, UK-based Griffon Hoverwork staged the official global launch of its new 995ED model, at Read More
  • Cammell Laird Shortlisted for Fleet Support Contract +

    Cammell Laird Merseyside shipyard Cammell Laird says it is delighted to have been shortlisted, as part of a syndicate of British firms, Read More
  • Stena Line and its Customers "Round Up for Charity" +

    Africa Mercy As a great admirer of the work carried out by the charity Mercy Ships, I was delighted to hear that Read More
  • A New Era for Norwegian Shipping +

    Harald Solberg I was impressed by the positivity and optimism of a recent press release from the Norwegian Shipping Association which I Read More
  • The Fjords Targets Oslo With New Zero Emission Vessel +

    Future of the Fjords The Fjords DA has announced it plans to add another all electric passenger vessel to its award winning fleet, with Read More
  • 1
  • 2
  • 3

Cruise News/Superyacht News

  • "Splicing the Mainbrace" +

    Drink! It appears that the phrase ‘One for the road’ needs an update, particularly where travelling on the ocean wave is Read More
  • Balmoral Voyage Report +

    Balmoral Most readers will be aware of Fred. Olsen Cruise Lines and many, in fact, would have travelled on one of Read More
  • New Turquoise Yachts 77m Unveiled +

    Project Quantum Turquoise Yachts, the Turkish based shipyard under the same ownership as the Dutch Oceanco shipyard, has commissioned Ken Freivokh Design Read More
  • Steady as a Rock +

    Rock When Ali Sayakci, the Turkish businessman, set out to build his new yacht Rock, his primary concern was how to Read More
  • Le Ponant on the Move +

    Ponant Icebreaker Following the example of the Lindblad Cruise Line and National Graphic in the USA, Ponant, the French cruise line which Read More
  • 1
  • 2
  • 3

Ships, Ports and Places

Cadiz

Captains in Cadiz

The very name Cádiz has always held a special place in my imagination from schoolboy days, when I learned that, Read More
Kelvinbank

To The Bürgenstock by Bürgenstock

Although the Vierwaldstättersee in central Switzerland is now surrounded by roads and railways, there are still journeys for which the Read More
  • 1
  • 2

Companies, Events and Other Features

Falklands medal

Twenty-First Century Press Gang

In 1932, the popular comedian and ukulele player George Formby released the song “Chinese Laundry Blues” Read More
Steuben

The Sinking of the "Steuben"

There was an ominous feeling in the air as the old liner Steuben slipped her moorings under dark clouds and Read More
  • 1
  • 2