Ship owners should not bear the brunt of safety spending: Spread the burden across the industry

Frank Coles, CEO Wallem Group. Credit: Wallem Group

Shipowners bear the brunt of the costs when it comes to safety innovation and improvements; the burden should be more equally shared in the industry

The role and reputation of shipowners in this world is one of much debate by the stakeholders in the maritime world. It is the most prevalent when it comes to discussing safety and crew. It seems inevitable that shipowners are called upon to carry the cost, responsibility, and accountability for all safety and crewing matters regardless of the regulation and charter rates of the day. There is no carrot to entice shipowners in the maritime world, only sticks to hit them with.

Some would agree that the owner and manager must comply with every regulation, meet all quality requirements for the ship, and carry all costs of new innovation and environment improvements in the industry. If they do not, the ship is not chartered, or it is detained.

However, what if a ship that was green, economical, and maintained to a higher standard was built? Will the charter rate of these ships be higher? The answer is almost always no. Instead, it has to be driven by market forces. The responsibility for innovation and environmental improvements must fall on the shoulders of owners without incentive and encouragement.

Hence, it is not surprising if owners do the minimum to maintain the ship to the regulations and standards required. What about the other stakeholders, primarily the charterers? Some oil majors charter large quantities of ships on bareboat and return them a few years later in terrible condition.

The same companies then preach safety and make demands on shipowners to follow their safety gospel. Then, we have a well-known company that acts as a commodity charter police. Arbitrary inspections in a subjective manner are imposed all over the world in the name of quality and safety. On the face of it, this is a useful tool to manage and monitor ships that are right for charter. However, it is all one-way traffic in the imposition of marks and impact on the business of owning the ship. There is no accountability and responsibility from such charter police companies, only dictatorship.

When questioned, the shareholders of such organisations would not consider paying more for a better ship. Why would they when there are plenty of ships and it is up to the shipowners to innovate and produce the future of shipping?

When Norway wanted electric cars, it provided subsidies to the buyers, or removed the taxes for electric cars. The result: multiple sales of electric cars. The shipping industry wants green and efficient ships, but how are we going to do it? We will spend 10 years talking about it in an environment of government appointees. We will cogitate and discuss, and make sure the ‘and’ or the ‘subject to’ are placed in the right paragraph. Then a solution will be given a deadline, and a half-workable solution with an out clause will be forced on the owners.

Instead of spending years discussing in an environment of government appointees and coming up with a half-workable solution that will be forced onto shipowners, a collaborative ecosystem of stakeholders should come up with a win-win scenario to ensure all parties deliver what the world needs. Both sides should want to create an industry that is environmentally responsible, efficient, and safe with quality operation.

Imagine a world where an oil major or major commodity charterer only charters green ships that it had helped design, an owner has built, and is paid a quality rate for. This will be the new ecosystem of quality, innovation, and safety.