08 August 18 The Business Times by DAVID HUGHES
NO APOLOGIES for getting a bit technical this week. It is for a good reason.
Shipowners are facing a plethora of decisions on complex technical issues against a background of uncertainty. Come Jan 1, 2020, now less than 18 months away, they will face the challenge of complying with the International Maritime Organisation's cap of 0.5 per cent sulphur in ships' fuel.
To fall in with the requirement, existing ships have a number of options - to use the (probably) much more expensive distillate fuel, or to go with one of the ultra-low-sulphur blended fuels now emerging on the market, or to fit a "scrubber" to take the sulphur out of funnel emissions.
Scrubbers seem to be the choice. A recently completed survey among members of the Exhaust Gas Cleaning Systems Association (EGCSA) has uncovered a rapidly accelerating uptake of scrubbers, with 71 units ordered in May alone; the EGCSA further reported that the number of ships with exhaust gas-cleaning systems installed or on order stood at 983 at the end of May.
This follows a slew of recent scrubber orders by major ship operators such as Spliethoff, Frontline, DHT and Star Bulk.
EGCSA says that, with uptake of scrubbers across the global shipping fleet on the rise, shipowners are expected to spend more than US$20 billion over the next five years on exhaust gas-cleaning systems.
But ship owners have two different decisions to make: What to do about existing ships, and what fuel new ships should use. Both are difficult to answer.
But marine insurer The Swedish Club has sound advice for owners pondering the type of main machinery to install. It warns that vessel operators should always look to the long term when specifying the type of engines to be installed across their fleets. It notes that its latest statistics show that vessels propelled by medium- or high-speed engines have a claims frequency 21/2 times higher than that for slow-speed engines; the average claims cost is close to US$650,000.
"Main Engine Damage", the latest loss-prevention report from The Swedish Club, sheds light on an expensive category of damage that it says "is all too frequent".
Statistically, a vessel will suffer one to two incidences of main engine damage during its life time. Considering the costly consequences for ship owners and their hull insurers, it is important to identify the main causes of this damage and examine how it can be prevented.
Peter Stï¿½lberg, a senior technical advisor explains: "Our investigation shows that bulkers and tankers are the best performers for claims cost in comparison with club entry. Most of these vessels have slow-speed engines.
Conversely, passenger vessels and ferries have the highest frequency of main engine claims - 0.066 claims per vessel and year. Often, these vessels have multiple medium-speed engine installations. The same is also true for ro-ro vessels.
He advises: "When there is a choice to be made between a slow-speed engine and a medium- or high-speed one, the club's experience shows that the slow-speed engine is the safer option when you balance the space-saving advantages of the medium- high-speed engine against the increased costs of running the vessel in its lifetime.
In addition, not only is the claims frequency of medium- and high-speed engines higher, but these vessels also have a disproportionate claims cost (43 per cent) in relation to insured vessels (28 per cent)."
The Swedish Club makes another interesting observation - that lubrication failure is still the most expensive and frequent cause of damage, followed by incorrect maintenance and/or repairs. So lubrication is also becoming a complex issue.
Lubricant manufacturer Shell Marine makes the obvious point that, with under 18 months before the IMO sulphur cap comes into force in 2020, ship owners must decide on the type of marine fuel that will serve their future needs. But it stresses: "Doing so demands an additional decision on the cylinder oils suited to maintaining engines in optimum condition."
Certainly, lubricant manufacturers have been preparing to meet the complex demands that now face ship operators; a range of new lubricants are now entering the market.
However, taking into account engine type, the expense of alternative fuels and the complexities of lubricating engines that switch fuels, it would be likely that, for many owners, the obvious solution - for at least another decade - will be to go for slow-speed engines fitted with scrubbers.