Major salvage cases continue to make the headlines lately and, according to many insurance sources the costs of these cases are rising. Indeed, according to Allianz Global Corporate & Specialty, the near two-year salvage operation for the car carrier Golden Ray “cost in excess of $800 million.”

Given the sorts of numbers that start flying around whenever there’s a major casualty, it may come as a surprise that the International Salvage Union’s just-released statistics for 2021 show only a modest recovery in ISU member gross revenues. They reached $391 million, compared with $301 million in 2020.

ISU members provided 189 services in 2021, compared with 182 in the previous year.

Lloyd’s Open Form (LOF) cases continued to decline, down to just 29 cases compared to 40 in 2020. However LOF revenue was up, at $122 million, more than double the $60 million reported for 2020.

Wreck removal income reached $108 million from 56 services, compared with $98 million from 101 services in 2021.

CHALLENGING ECONOMIC CONDITIONS

“Economic conditions are challenging and activity and income for our industry is volatile year-on-year. The general trend towards a smaller number of larger and more complex cases enhances that annual variability,” said ISU President, Resolve Marine Group’s Captain Nicholas Sloane. “The numbers in this survey reflect the period when the world was still fully contending with the COVID pandemic which made operations and logistics more challenging. Throughout those difficult times ISU members showed time and again their problem solving and willingness to overcome obstacles to provide services to their clients, the shipowners, and their insurers. And, taken alongside the ISU’s pollution prevention statistics, these numbers demonstrate a dynamic industry which most years performs some 200 salvage services.”

“Professional salvors protect the environment, reduce risk and mitigate loss. They also keep trade moving – which is demonstrated so clearly when there are large containership cases. We continue to work closely with key stakeholders to ensure that there is continued global provision of professional salvage services.”

The 2021 ISU statistics show a historic low level of LOF cases – 29 for ISU members – generating income of $ 122 million. It compares with 40 cases worth $ 60 million in 2019. Revenue from LOF cases amounted to 50 per cent of all emergency response revenue and LOF cases accounted for 15 per cent of emergency response cases in 2021. SCOPIC revenue at $41 million in 2021 was up from $24 million previously.

Revenue in 2021 from operations conducted under contracts other than LOF was $120 million, effectively the same as in 2020 ($119 million). The average revenue from each non-LOF contract was therefore $750,000.

Wreck removal is an important source of income for members of the ISU but 2021, with $ 108 million from 56 operations (28% of the total income), showed the same trend as 2020 ($98 million received from 52 services – 33 per cent of the total).

The ISU statistics are collected from all ISU members by a professional third party, which aggregates and analyzes them. The statistics do not include the revenues of non-ISU members but are the only formal measure of the state of the marine salvage industry. The statistics are for income received in the relevant year but that can include revenue relating to services provided in previous years and there can be an element of “time lag”. The statistics are for gross revenues from which all of the salvors’ costs must be met.

Source: https://www.marinelog.com/legal-safety/environment/salvage/salvage-industry-sees-only-modest-recovery-in-gross-revenues/

IMO has organised a port security workshop in San Pedro Sula, Honduras as part of its capacity building support for Member States. The workshop (18-22 July) primarily focuses on SOLAS Chapter XI-2 and ISPS Code for Designated Authorities (DA) and Port Facility Security Officers (PFSOs), thereby supporting officials to perform their duties in line with IMO maritime security measures.

A total of 31 participants* with roles relating to Honduras’ port security are attending the national workshop. They will receive the knowledge and skills to understand the requirements of key IMO maritime security instruments.

The event, which was requested and co-hosted by the Honduras National Commission for Port Security (Comisión Nacional de Protección Portuaria) included a visit to the Port of Puerto Cortes.

* Seventeen officers in charge of port security from ports across Honduras, six representatives of the National Commission for Port Security, two Navy officers, two merchant marine officers and four port management students.

Source: https://www.imo.org/en/MediaCentre/Pages/WhatsNew-1734.aspx

The vast majority of Ukraine’s stored grain is awaiting export from its large Black Sea terminals, which have been shuttered by a Russian naval blockade. A small amount is trickling out of the country via its land borders to the west, and a bit more is being carried out via its Danube River ports on the Romanian border. Unfortunately, according to the Ukrainian government, hundreds of thousands of tonnes are also being taken by Russian occupying forces, with little to no compensation for farmers.

Several independent investigations have documented an abnormal surge in grain shipments out of the Russian-occupied port of Sevastopol, which has historically handled little outbound grain. According to an investigation by the Financial Times, an estimated 140,000 tonnes of grain were loaded on bulkers and exported from Sevastopol in May alone. In a separate investigation, Russian truckers interviewed by the Wall Street Journal explained how they have been contracted to carry grain from newly-occupied areas of Ukraine to Sevastopol.

According to Windward, there has been a 160 percent increase in AIS-dark activity in the Black Sea for Russian- and Syrian-flagged vessels over the past year, the majority since the start of the invasion. In recent months, most of the “dark” voyages that started in the Sea of Azov have ended in Turkey or Bulgaria, with a small number headed to Syria.

In addition to the traffic in and out of Sevastopol, Russian-flagged and open-registry bulkers appear to be meeting with one to four other vessels in clusters in the Kerch Port anchorage, and satellite imagery shows clear evidence of STS transfers in progress.

The company’s proprietary AIS- and satellite-based tracking intelligence has identified a pattern of suspicious ship-to-ship grain transfers in the Russian-controlled Kerch Strait, where small bulkers are meeting up with larger vessels to hand off cargo for export.

“Dark” STS transfers are a familiar sanctions-evasion strategy used in the tanker industry. There are legitimate reasons for STS transfers of grain in the Sea of Azov, like moving cargo from the region’s ubiquitous river-sea class barges onto seagoing bulkers – but when conducted in combination with “dark” activity it could suggest handling of illegitimate cargoes.

In an example from June 10, Windward identified a cluster of five vessels – two small bulkers, one midsize bulker and two service vessels – all rafted up in the Kerch Strait. The two small bulkers spent an extended period of time operating dark in the Sea of Azov, turning on their AIS transcievers on the Don River. Based on their reported drafts, they appear to have loaded grain at the Russian port of Azov.

The large vessel increased its AIS reported draft from 6.2 to 9.9 meters after the meeting (a sign of laden condition), then headed to Metalurji, Turkey, where it updated its draft back down to 6.2 meters (a sign it had offloaded cargo). This ship has since made similar trips, but ending in Libya.

One of the smaller vessels has since made a trip to Ukraine, according to Windward.

“In addition to a proliferation of dark activities in the Black Sea area since the Russian invasion of Ukraine, we are now witnessing coordinated cargo ship-to-ship meetings involving multiple ships in what looks like a clear attempt to evade restrictions and sanctions via smuggling,” warned Windward. “It is now clear to every shipping stakeholder dealing with trade that deceptive shipping practices and risk mitigation are relevant to all vessels and types of commodities – oil is no longer the main driver of the maritime economy.”
Source: https://www.maritime-executive.com/article/sts-transfers-may-be-used-to-launder-stolen-grain-from-ukraine

While globally the incidents of piracy against commercial shipping continue to decline, Asia and specifically the Singapore Strait continues to be one of the areas of greater concern. The ReCAAP Information Sharing Center (ISC) released its mid-year report for 2022 highlighting an 11 percent increase in incidents in Asia while also conducting a dialogue session with the shipping industry to discuss steps required to reduce the regional risks.

ReCAAP’s mid-year report reflects the same issues identified by the ICC International Maritime Bureau (IMB) which recently said that it received the lowest number of reported incidents for the first half of any year since 1994. While saying that incidents were nearing a 30-year low, they also pointed to the increase of low-level crimes in the Singapore Strait.

ReCAAP’s data shows that there was a total of 40 incidents of robbery against ships in Asia in the first half of 2022, which is up by 11 compared to the 38 reported incidents in 2021. More than half of those incidents were reported for ships transiting the Singapore Strait with a total of 27 reports up from 20 last year. “The Singapore Strait,” ReCAAP says, “remains an area of concern.”

A closer analysis of the data shows that the activity is heavily concentrated at the eastern side of the Singapore Strait. Further, 19 of the incidents were in the eastbound traffic lane. Yet, while activity is high, it remains mostly low-level crime with boarders seeking to steal spare parts or other materials most often from open store lockers. Most often the perpetrators leave the vessels when they are discovered and often there is no direct confrontation and interaction between the crew and the boarders.

Across Asia, ReCAAP says three-quarters of the incidents are classified at the lowest level meaning that the perpetrators are not armed and the crew was not harmed. However, nearly three-quarters of the incidents reported were on board ships while they were underway versus anchored or at berth. Only in two of the reports did the vessel report that the attempt at boarding was unsuccessful, but ReCAAP emphasized that reporting is critical to ensure an accurate understanding of the activity in the region.

The only other area that saw an increase in reports was the Chattigram anchorages in Bangladesh, where there were three reports versus none in 2021. There were no reports both in Malaysia and Vietnam and incidents declined by half to just three in the Philippines. Further, it is more than two years since there was a reported abduction of crew for ransom in the Sulu-Celebes Seas and waters off Eastern Sabah. While the last abduction was in January 2020, ReCAAP advises that the threat remains potentially high recommending that vessels continue to re-route where possible.

During the discussion with the shipping industry, they highlighted the need to focus on the conduct of the crew while transiting these areas. The participants agreed on the need for the shipping industry to continually review the Risk Assessment Plan, implement the Ship Security Plan among other time-tested best management measures required to suppress the acts of piracy and armed robbery against ships, according to ReCAAP. They recommended that vigilance and lookouts be maximized and that an alarm should be sounded when sighting unauthorized persons on board ships or suspicious boats in the vicinity.

Over the past 15 years, ReCAAP has focused on data analytics on the number of perpetrators, weapons carried, treatment of crew, stolen items, type of ships boarded, and time of the incidents. Phase II of the data analytics is underway and ReCAAP hopes to be able to provide more analytical information that will enable the ship crew to be better prepared for any potential piracy and armed robbery incidents by adopting the relevant safety measures, especially when navigating through the areas of concerns.
Source: https://www.maritime-executive.com/article/singapore-strait-is-an-area-of-concern-while-global-piracy-declines