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Presentation of Michael G. Roberts Marine Salvage Update Maritime Law Association / Instituto Iberoamericano de Derecho Maritimo Fajardo , Puerto Rico October 31, 2013. Company Overview. - PowerPoint PPT Presentation
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Presentation of Michael G. Roberts
Marine Salvage Update
Maritime Law Association /Instituto Iberoamericano de
Derecho Maritimo
Fajardo, Puerto RicoOctober 31, 2013
Company Overview
2
Crowley was founded in 1892, when Thomas Crowley — grandfather of current chairman, president and CEO Thomas B. Crowley, Jr. — purchased an 18-foot Whitehall boat to provide transportation of personnel and supplies to ships anchored in San Francisco Bay.
Crowley has since grown into a strong, diversified, service-oriented company with primary interests in marine solutions, transportation and logistics.
Today, the company has more than $2 billion in annual revenues; more than 5,000 employees; and owns / operates a fleet of more than 250 vessels. Other assets include terminals, warehouses, tank farms, office buildings, trucks, trailers, containers, chassis, cranes and other specialized vehicles.
Three Generations At
The Helm
Marine Solutions,
Transportation & Logistics
121 Years Of Success
Principal Businesses
3
Container Shipping & Logistics About 20 vessels in U.S. – C. America / Carib regional service Warehouse, trucking, Customs brokerage, etc.
Technical Services Diversified menu of domestic & international services
Petroleum Transportation 19 large tank vessels (17 ATBs) in domestic blue water trades; 4
MRs on order, plus options for 4 more. 5.5M bbls static capacity; average hull age less than 5 years.
Petroleum Sales & Distribution Tank farms, fuel supply network in Alaska
Crowley Solutions
4
World-class ocean towing and barge transportation Vessel design and construction management Resource development project management Ship management (40+ vessels; MARAD, MSP, others) Marine salvage, wreck removal, emergency response
Titan Maritime
5
Founded in 1980 by David Parrot
Acquired by Crowley Maritime in 2005
One of the very few organizations in the world doing marine salvage, emergency response and wreck removal as its core business
Member of the Int’l Salvage Union (ISU) and the American Salvage Association (ASA)
Depots in the US, UK, Singapore & Australia
Track Record
Now…Marine Salvage
1989 Salvage Convention – Codified traditional English and common law principles
Peril to marine property Service not pursuant to pre-existing duty Applies in absence of contract General maritime duty to render assistance Master / owner has contracting authority Must cooperate with salvor to prevent / minimize
environmental damage, and accept redelivery of vessel Salvor has a duty of care, including to protect the
environment; must seek / accept aid when needed
Marine Salvage – Legal Foundation
Salvage Contracts and Statistics
Lloyd’s Open Form (LOF) No cure – No Pay Full set of rules, including London arbitration First LOF Contract 1892 11 Revisions culminating in LOF 2011 100-120 LOFs per Year Since 1978 About $31 Billion Saved Salvage Business = $400-$600 Million per Year LOF with SCOPIC (Special Compensation Protection
and Indemnity Clause)
Other contract forms may be used
Criteria for the Award
Classic / Common Law Factors Nature & degree of risk or danger to vessel Salved value Risks assumed by salvors Salvor’s skill, energy & promptitude Salvor’s time & expense State of readiness & efficiency of equipment
More Recent Additions Skill / effort / cost in preventing environmental damage Degree of success
COSTA CONCORDIAVolume & Complexity of Cargo - APL Panama Capacity 4,000 TEU
1,805 Containers Aboard
Largest Award in History
ISU: RECOVERY OF POLLUTANTS
Salvage operations: 244 (256 in 2008)
Pollutants recovered: 1,022,730 tonnes (667,497 tonnes in 2008)
15,976,297 tonnes of potential pollutants recovered 1994 - 2009
Exxon Valdez Spill: 37,000 tonnes (1989)
• Torrey Canyon 1967
• Largest wreck of its time
• 120,000t crude oil spilled
• Outside UK waters
• $7.2M 3rd Party Settlement
• $14.8M H&M Claim
• Limitation Liability 1851
Wreck Removal
Wreck Removal
Key features of Wreck Removal Wreck has no commercial value (CTL) Risk Covered by P&I not H&M Bid / award process vs. emergency response
Nairobi Int’l Conv. Removal of Wrecks (2007) Authorizes coastal states to act where danger to navigation,
environment BIMCO contract forms commonly used (WRECKHIRE (day rates);
WRECKSTAGE (milestone payments); & WRECKFIX (single payment at completion)
Other contract forms – sometimes not suited to wreck removal projects – may also be used
Salvage – Wreck Removal Continuum
IG LCWG Found 3 Stages in Contracting Common
SCOPIC Often Presages Wreck Removal
Interim Contracts Usually for Fuel Removal While Tendering
Wreck Removal Typically Fixed or Staged
Delays in Switching or State Interference Forcing SCOPIC to Run
Resulted in Cost Increases
Sharing of Risk – More Global View
Twenty largest projects included significant day rate
components
Many other projects beyond the top 20 primarily lump sum
Year Vessel name Type Club GTContainers On
Board ROW/SCOPIC (US$)
2002 TRICOLOR Ro Ro Gard 49792 54,742,4932003 CP VALOR Container WoE 15145 900 44,553,1422004 HYUNDAI 105 Car carrier UK 40772 57,664,127
2004 SELENDANG AYU Bulk carrier Swedish 39775 148,118,1872005 TWIN STAR Bulk carrier Japan 14437 33,751,367
2006 OCEAN VICTORY Bulk carrier WoE 88853 52,155,9132006 ROKIA DELMAS Container Swedish 33047 391 73,284,4572006 GIANT STEP Ore carrier Japan 98587 38,887,6132006 CALIFORNIA Bulk carrier American 40182 44,066,4732006 MSC NAPOLI Container London 53409 2,318 135,301,3072007 NEW FLAME Bulk Carrier Swedish 26824 177,372,3212007 SEA DIAMOND Passenger WoE 22412 57,983,161
2007 EASTERN BRIGHT Chemical tanker Japan 1715 58,513,4422008 FEDRA Bulk carrier American 35886 60,700,000
2010 JOLLY AMARANTO Ro Ro UK 22945 43,517,5452010 MSC CHITRA Container Standard 33113 1,219 102,474,8862011 B OCEANIA Bulk Carrier Swedish 38337 55,080,5272011 RENA Container Swedish 37209 1,366 243,972,652
2011 COSTA CONCORDIA Cruise ship Standard 114147 561,636,615
2012 BARELI Container Gard 35881 1,397 54,327,008
TOTAL 2,098,103,236
COSTA CONCORDIA RENA
Capacity 3,350 TEU
1,366 Containers Aboard
US$244M & Counting – 2nd Most Expensive Removal
COSTA CONCORDIA JOLLY AMARANTO – RoRo Breakbulk
10,500 mt Cargo
Including >100 mt Steel Wire
COSTA CONCORDIA OCEAN BREEZE - Bulk
36,000 mt Grain
Removed via Telepherique
Wreck Removal
Wreck Removal Cost Drivers
Technical & operational characteristics of the
wreck & the site
Coastal state & stakeholders intervention
Media can drive unwarranted concerns / actions
Characteristics of fuel removal
Contractual arrangements
Effectiveness of contactors, salvage consultants
& claims manager
Wreck Removal Cost Drivers
Issues Facing the Industry
Responder Immunity P&I or Salvors policy will cover loss; therefore, liability
rules should drive best behaviors Owners/public need responsive, professional responders Responders need immunity from liability for ordinary
negligence, not gross negligence or recklessness Mechanisms to deter frivolous claims
Performance Guaranty Salvor agrees to cover cost of completion Not suitable given uncertainties in bidding No such clauses in standard BIMCO forms
COSTA CONCORDIA
COSTA CONCORDIA – A Perfect Storm
Characteristics of Wreck
45,000 mt lightship, Salvage weight 55,000 – 75,000 mt
Complex Heavily Damaged Structure
Capsized Upslope
Characteristics of Site
Environmentally & Cultural Sensitivity – Removal Intact
Complex Topography – Bridged Between Rock Ridges
Complex Geology
Casualty Occurred Winter 13 January
COSTA CONCORDIA – A Perfect Storm (Cont)
Fuel Removal – 71 Days Dead of Winter
Heavy State Oversight
Crime Scene – Prosecutorial Permissions for All Operations
Extraordinary Media Spotlight
Heavy Environmental Requirements
Meet of All Industrial Regulations
Salvage or Offshore Construction??
Platform PF-1
Sponson Installation
Blister Tanks
Ready
Commence Parbuckle
www.parbucklingproject.com
Upright – 1.5 Degrees Port
Starboard Side Damage
Crowley / Titan
36
Thank You!