Call for consistency
The rising cost of wreck removal to insurers and reinsurers is inevitably passed on to shipowners, pushing up their operating costs in turn. It is therefore in all stakeholders’ interest to improve the management of wreck removal.
Consistency and fairness by authorities in their approach to wreck removal across different territories is one of several important recommendations made within the Lloyd’s report. Shipowners and insurers should consider a formal, international campaign of engagement with relevant stakeholders such as influential coastal states, the International Maritime Organisation, the EU and International Harbour Masters, it says.
A practical challenge facing the shipping industry is the gap that has developed between the increasing size of vessels – notably containerships, passenger vessels, bulk carriers and LNG vessels – and the capability and equipment available to handle them, either as casualties or wrecks. Closing this gap is an important consideration for shipowners, the ship design industry, the salvage industry and liability and hull insurers to explore together, the report suggests.
Reducing human factors in marine casualties is a risk management imperative for the shipping industry, as human error continues to be the single most significant cause of shipwrecks. Shipowners and operators should ensure that seafarers are well trained and that operations are conducted safely, supported by appropriate technology, the report adds.
The increasing cost and complexity of wreck removal is an important issue for the marine insurance market. But there are implications for stakeholders all along the shipping industry’s economic value chain, according to Judy Knights, marine and energy class of business executive at Lloyd’s. “The findings of this comprehensive report should encourage and inform dialogue between these stakeholders, as well as the relevant authorities, to help contain wreck removal costs,” Knights said. “Importantly, the report will also contribute to loss prevention and risk management in the shipping industry.”
Click on the images from the report below to find out more.