Tuesday, June 9, 2020

Major Shipping Groups Admit Defeat and Quit Market Sector After Five Years of Hurt

Promise to Be Biggest and Best Fails
Shipping News Feature

US – DENMARK – WORLDWIDE – Five years to the month since some of the giants of the shipping world joined forces to create a new specialist sector group, the project has collapsed, with the management forced out by difficult market conditions after promises to be the largest player in the field. So who was this operation that promised so much?

The answer is Ardent, the salvage company formed by a Maersk subsidiary Svitzer Salvage, together with Titan Salvage, itself a subsidiary of the US headquartered Crowley Group. A year after its inception the company reported a reasonable start with fifty contracts completed (and reached over 300 before its demise) but already a change of direction had been noticed.

A seeming lack of salvage contracts was in part made up for by offshore decommissioning works for the oil and gas industries and, earlier this year Ardent's US operation, Ardent Americas LLC, was snapped up by Royal Boskalis Westminster N.V., owners of Smit, another major salvage player.

US legislation demands that all ships within its waters carry salvage and marine fire-fighting (SMFF) contracts with approved providers and the sale to Smit transferred all Ardent’s OPA90 liabilities over. OPA90 providers are the approved SMFF groups and Ardent had a portfolio of over 500 vessels under such contracts.

As with heavy lift operations, salvage is an expensive, asset rich field, with vast amounts of pricey equipment required and companies keenly fighting for any available business. A current case illustrates the nature of the market where costs and profits can be counted in tens of millions of dollars. Smit are currently involved in litigation with another large provider, T&T Salvage after the demise of the Golden Ray, the two year old car carrier which foundered off the Georgia coast in September 2019.

Although the hulk still posed a major hazard to shipping near the Port of Brunswick, Smit petitioned the Court to stop T&T working on her. As first responder Smit had subsequently quoted to retrieve the ship in several sections. This it said would mean the safe recovery of over 4,000 cars being carried out with minimal environmental impact.

T&T quoted less by offering to remove much larger sections but Smit’s case centres on its claim that the US Coast Guard has broken a Federal law which calls for the pollution to be minimised, something Smit claims cannot happen under T&T’s plan and goes against OPA90 responsibilities.

The irony is of course that, whilst at management level, the salvage companies will always fight tooth and claw to maximise their share of the sparse, but potentially vastly profitable market, the staff at sea often find themselves in the closest possible collaboration in circumstances where cooperation is the best guarantee of safety.

Photo: Salvage crews cut into the hull of the Golden Ray to try and reach four remaining crew trapped in the hull. All 24 crew were eventually rescued. Courtesy US Coast Guard.