Salvors remain busy but revenues disappoint

LAST year, specialist salvage companies, or "salvors", belonging to the International Salvage Union (ISU), carried out 234 operations worldwide, nine less than in 2017. The ISU has just published its annual statistics which show a mixed picture.

ISU members reported gross revenue of US$409 million in 2018, down from US$456 million in the previous year. Now, the very nature of salvage, dependent as it is on the number and the nature of shipping accidents, means that the number of salvage operations and the associated revenue fluctuate a lot.

However, ISU president Charo Coll sees a trend. She said in response to the figures: "The 2018 ISU statistics again show the economic pressures on our industry. In response, ISU and its members must continue to promote the value that the industry provides to shipowners, insurers and the wider shipping industry and society.

"ISU committed in 2018 to be forward-looking and to recognise that its members contract in different ways and deliver many vital services. Their operations help to prevent and mitigate loss, protect the environment and support world trade by keeping goods moving and seaways and ports open."

She added: "There is fierce competition but professional salvors with their own people, equipment and experience bring an expertise to the most difficult jobs, giving confidence that the operation will be expertly managed, lives saved, the environment protected and the value of property preserved."

The hub of ISU's case that salvage is not profitable is that the statistics show that revenues have dipped from the performance in 2017 and are up on the low point of 2016 but the numbers are still well below the levels from several years ago when annual income was typically more than US$700 million.

Difficult operations

Perhaps surprising, given the long-running controversy surrounding it. Lloyd's Open Form (LOF) continues to be an important contract and in 2018, there were 55 cases for ISU members, generating an income of US$104 million. It compares with 46 cases worth US$53 million in 2017. Average income from each LOF case was US$1.9 million, representing 7.45 per cent of the average LOF salved value.

To the disappointment of the salvors, total revenues from the SCOPIC provision to recompense salvors for anti-pollution "continue at very low levels" at US$21.3 million, marginally up on the all-time low of US$20 million in 2017.

Interestingly, wreck removal income has grown during the past decade and remains an important source of income for members of the ISU. In 2018, 71 operations produced income of US$208 million or 51 per cent of total income.

As well as publishing its statistics, ISU has also sent out the latest edition of its newsletter Salvage World. This really gives a good insight as to what lies behind those figures, skilled people doing a difficult job in often very challenging conditions.

Salvage World includes the details of many salvage operations. Among them was the case of the container/roll-on roll-off ship Grande America which caught fire while about 140 nautical miles off Finisterre, France. This incident highlighted worries over container ship fires and also how complex incidents can become.

Expertise needed

The Grande America's crew were rescued by a passing British Royal Navy ship, HMS Argyll. At the same time, salvage company Ardent mobilised a team including fire-fighting experts and equipment via charter plane as well as tug response.

However, the casualty sank while the team was still on its way to ship. Ardent continued to render assistance to owners and insurers, initially with an area search for abandoned life rafts, boats, floating containers and monitoring any oil pollution sighted. Several floating containers were recovered to shore for safe disposal using the mobilised assents and a dedicated AHTS/construction vessel was fitted with a container recovery spread developed by Ardent.

Subsequently, Ardent was tasked with the inspection of the sunken ship, undertaking a survey of the surrounding seabed for debris and with the development of an intervention plan to prevent further oil pollution. This was all conducted at a depth of 4,700 metres below the surface. The ground-breaking plan was successfully completed with the leaks patched and sealed by mid-April.

There will always be discussions over how much salvors should be paid. In this era of relatively fewer ships becoming casualties, it is easy to assume we do not need very many salvors. That would be wrong. The shipping industry needs a global network of skilled salvage professionals.