Salvage World Q2 2020

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INTERNATIONAL SALVAGE UNION

July 2020

ISU publishes salvage industry statistics for 2019 ISU has published the industry statistics for 2019. The number of services shows a slight fall while gross revenues show a slight gain. LOF revenue is at an historic low. • Gross revenue for ISU members - US$ 482 M (2018, US$ 409 M) • Activity levels - 216 services (2018, 234 services) •

Lloyd’s Open Form at very low levels 35 cases (2018, 55) and LOF revenue at historic low of US$ 49 M (2018, US$ 104 M)

• Wreck removal income - US$ 284 M from 101 services (2018 - US$ 208 M from 71 services) Commenting of the statistics, ISU President, Richard Janssen, said: “The 2019 ISU statistics are broadly comparable with the previous year. "Gross income has rallied somewhat but the numbers are still well below the levels of several years ago when annual income was typically more than US$ 700 million, driven by large scale wreck removals.

It shows the economic pressures on our industry but our members have confidence that they provide critical services for shipowners and insurers protecting the environment, reducing risk, mitigating loss, and keeping trade moving. They are however concerned about the sustainability of their businesses and the model on which their services are historically being compensated. “The market conditions have caused contraction of the industry which has sadly lost some famous names in the past few years. "It is essential that there remains global provision of a professional salvage capability so that owners, insurers and wider society can have confidence that marine casualties will be safely and cleanly managed by contractors with the right skills, experience, people and equipment.” The 2019 ISU statistics show that there were 35 Lloyd’s Open Form (LOF) cases for ISU members generating income of US$ 49 million. It compares with 55 cases worth US$ 104 million in 2018. Average income from each LOF case in 2019 was

Salvage operation, Northern Ireland, during 2019

US$ 1.4 million representing 10% of the average LOF salved value. Revenue from LOF cases represented 27% of all “dry” salvage (emergency response) revenue and LOF cases accounted for 16% of all “dry” salvage cases in 2019. SCOPIC revenue at US$ 17 million was the lowest since 2001. Revenue in 2019 from operations conducted under contracts other than LOF (commercial terms) was US$ 131 million – up from US$ 75 million the previous year. Average revenue from non-LOF contracts Continued page 2

Salvage industry responds to COVID-19 The worldwide Coronavirus has caused huge issues and challenges to the shipping industry.

Seafarers being stranded at sea or in port has become a major issue as restrictions have prevented normal crew changes.

ISU members, many of whom are shipowners and employ their own seafarers, have been affected and salvage operations have been made more complex logistically. There are concerns about delay when salvage teams have been forced by quarantine requirements to wait – in some cases for weeks – before being able to proceed to a job or to demobilise.

The heads of the UN maritime, labour and aviation organizations published a joint statement calling for urgent action on crew changes and for keyworker designation so that seafarers can be relieved and repatriated during the COVID-19 pandemic.

Despite the difficulties, ISU members have continued to provide vital services - as reported in this edition of Salvage Wolrld - showing their determination to function regardless of the circumstances.

Some 150,000 seafarers a month will require international flights to ensure crew changeovers can take place. The three organizations have demanded the "key worker" designation for seafarers, marine personnel, fishing vessel personnel, offshore energy sector personnel and port workers, regardless of nationality. 1

Governments are urged to exempt these personnel from travel restrictions, to ensure crew changes can be carried out and that they have access to emergency medical treatment and, if necessary, to facilitate emergency repatriation. IMO Secretary-General, Kitack Lim, endorsed a series of protocols developed by a coalition of global maritime industry associations to ensure that ship crew changes can take place safely during the COVID-19 pandemic. The document contains recommendations to maritime administrations and other relevant national authorities such as health, customs, immigration, border control, seaport and civil aviation authorities.


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