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Published 5 September 2023
This article looks at current trends in maritime safety and how the industry's safety record is likely to be impacted as shipowners and operators focus increasingly on investments in new technology and decarbonisation.
The current trends in relation to maritime safety are mixed. Allianz's Safety and Shipping Review 2023 finds that in 2022 there were 38 total losses of vessels, down from 59 losses in 2022 and 109 losses in 2013. However, that positive downward trend for total losses is not mirrored in relation to the statistics for all casualties or incidents, which have risen slightly year on year. Allianz's data shows that machinery damage or failure accounted for almost half of all incidents in 2022 and that the number of reported fire incidents in 2022 rose to a decade-high.
These findings are echoed in a recent joint Lloyd's List and DNV Report, which shows that the positive downward trend in safety incidents has started to reverse following the pandemic. Both reports are agreed that by far the largest contributor to the total number of safety incidents in the decade from 2012 to 2022 was machinery damage or failure.
The shipping industry is under pressure to decarbonise through the adoption of new technology and fuels, whilst simultaneously facing a significant skills shortage and uncertain economic conditions from global headwinds such as deglobalisation. Against that background, the predominance of machinery failure as the leading cause of incidents is a worrying trend. As an example of the practical and operational implications of this, in April 2023 Qingdao and Shanghai ports both issued notices informing vessels calling there to ensure that their main engines, auxiliary engines and boilers were properly maintained to prevent PSC detention. Similarly, Tokyo MOU's annual report for 2022 noted that several member authorities had raised concerns about the increasing number of ship incidents due to "the lack of effective maintenance of main engines and power generation systems including poor implementation of planned maintenance", leading to an increased focus by the Tokyo MOU parties on planned maintenance during inspections.
Ultimate responsibility for the safety of a ship, her crew and her cargo, and for maintenance of a ship's equipment, rests with the ship owner (or bareboat charterer where there is one). At the core of every shipping transaction is a fundamental obligation on the owner to make the vessel seaworthy. The obligation is generally one of due diligence, rather than an absolute obligation, meaning that the shipowner is not absolutely required to ensure the ship is seaworthy but must take reasonable steps to ensure a seaworthy state through the carrying out of regular inspections and repairs, and by ensuring that any such repairs are carried out with reasonable skill and care.
It is important to emphasise that an owner's seaworthiness obligation cannot be delegated. If an owner instructs a third party to effect repairs to the vessel, and it later transpires that those repairs were carried out negligently leading to the vessel being unseaworthy, the shipowner will in principle be liable for losses arising from such unseaworthiness. This is the case even if the shipowner carried out due diligence to assess the quality of the supplier, and even if those repairs are certified by a classification society. The shipowner may seek recourse against the third party, but this will be subject to any exclusions and limitations of liability contained in the supply contract. This is of particular relevance in relation to complex machinery and equipment installed on board, whose maintenance may require the attendance of specialist, third party engineers.
The seaworthiness obligation is expressed in various different formulations in standard form shipping contracts. For example, in contracts subject to the Hague or Hague Visby Rules, the obligation is, before and at the beginning of the voyage, to exercise due diligence to "(a) make the ship seaworthy; (b) properly man, equip and supply the ship; (c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation."
In charter parties, other phrases are used, such as the duty to maintain included in Shelltime 4, or the obligation to ensure that the vessel is "in every way fitted for the service" in the NYPE 46, an obligation that goes beyond mere seaworthiness. Where there is no express seaworthiness obligation, one will be implied.
Seaworthiness encompasses all of the following:
In an increasingly digitalised trading and business environment, seaworthiness has also now come to encompass cyber-security and cyber-resilience, as reflected in the inclusion of cyber risk management in a vessel's safety management system as of 1 January 2021.
Once the scope of an owner's seaworthiness obligation has been identified, the test for determining whether a shipowner is in breach is that laid down in F.C. Bradley & Sons v Federal Steam Navigation (1926):
“The ship must have that degree of fitness which an ordinary careful owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it. Would a prudent owner have required that it should be made good before sending his ship to sea, had he known of it?”
The assessment of a shipowner's compliance with its seaworthiness obligation is often made by reference to industry standards or best practice, based on expert evidence, and relative to the specific vessel and voyage. This often also involves assessment of an owner's compliance with the ISM Code, via an analysis of the relevant parts of the owner's Safety Management System (SMS), and records demonstrating compliance with the procedures, drills and processes laid down in the SMS. For machinery and equipment, the planned maintenance system is likely to be a key focus. In any litigation, proving compliance can often be a document-heavy exercise although it is likely that the growing use of electronic records will help alleviate this burden. This is likely to be particularly so in respect of machinery and equipment breakdowns, where more high tech systems may be able to easily provide data regarding running hours, condition, alarm logs and maintenance history.
The future of maritime safety
Improving maritime safety is firmly on the radar of regulators and enforcing authorities. In June 2023, the European Commission announced new proposals "to modernise EU rules on maritime safety", focusing on PSC and maritime accident investigations with the ultimate aim of preventing loss of human life and environmental pollution. In a similar vein, the Tokyo and Paris MOUs will run a concentrated inspection campaign from 1 September – 30 November 2023 focusing on fire safety.
Safety and seaworthiness are likely to come under even greater scrutiny in the years to come, as new technology and new fuels are piloted and deployed at scale in order to meet the industry's decarbonisation objectives (see our article on recent regulatory changes here).
The switch to alternative fuels and propulsion systems has the potential to increase safety concerns in the initial stages of adoption, as relatively untested fuels start to be carried and burned in larger volumes on a global basis, by crew who may not be familiar with the fuel's properties or idiosyncrasies. The adoption of low-sulphur fuels in January 2020 proceeded remarkably smoothly, but nevertheless drove a notable increase in the number of claims relating to engine malfunctions and failures, sparking competing allegations of poor quality fuel versus poor fuel and engine management by inexperienced crews. We anticipate a similar pattern to follow the wider adoption of new fuels and propulsion systems.
The growing range of technological solutions promises to deliver improvements in safety by enabling predictive maintenance, better crew training and better data by which to determine root causes of incidents. Industry participants note that there is a surprising lack of collated data on maritime incidents, despite the fact that IMO members states are required to provide this information to the IMO. The use of standards for machinery data (such as those which already exist from the ISO), and anonymising data to remove commercially sensitive elements, could help improve data exchange and allow for comparisons of safety performance across equipment manufacturers and fleets.
However, adopting new technology is not a panacea to solving safety issues. Any new technology will still require owners to actively maintain their systems in good working condition, to update systems as and when necessary, and to ensure all ancillary documentary processes are in place. It will also remain essential that appropriate crew training is carried out to ensure systems are operated effectively and safely, with full knowledge by the crew of the system's capabilities and limitations, and of continuity and contingency plans in the event of system failure.
Some commentators have expressed concern about crews being subjected to digital overwhelm due to the variety and complexity of digital systems being installed. To mitigate against this, whilst maximising the potential of new technology to improve safety, owners can also consider how to incorporate human-centric design in the procurement and deployment of new machinery technologies. This design philosophy ensures that processes, machinery and machinery interfaces are designed to minimise or eliminate human error where possible, helping crew members to achieve higher safety standards.
In light of these developments, how might the concept of seaworthiness itself change? While ships remain manned, rather than fully autonomous, we anticipate that owners will retain their primary responsibility for seaworthiness. Questions remain as to how that obligation will shift, perhaps becoming aligned with product liability, as fully autonomous, unmanned vessels are developed and errors are attributed to software rather than to humans.
Maritime safety has improved significantly but persistent problems remain, particularly around maintenance of machinery and equipment and the sharing of data for preventative purposes. A failure properly to maintain a vessel's equipment has serious consequences for a shipowner, leading to potential claims from charterers and / or cargo owners, reputational damage, detention and delay and even regulatory investigations. Technology has an important role to play in enhancing safety, but must go hand in hand with robust cyber security and improved data sharing for the benefits to be fully recognised.
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Tim Ryan, Joanne Waters