LOH Development last 5 years How to interact with owners maker yard Resourses and communication surveyor - handler Surveyors day - Voss 24th October 2013 Asbjørn Asbjørnsen GARD
LOH LOH development the last 5 years How to deal with: Owner? Maker? Yard? H&M surveyor? Resourses and communication surveyor - handler
LOH development last 5 years 8.0 % Claim frequency for LoH by year 7.0 % 6.0 % Frequency 5.0 % 4.0 % 3.0 % 2.0 % 1.0 % 0.0 % 2008 2009 2010 2011 2012 All claims Major claims
LOH development last 5 years 16.0 % Claim frequency for LoH by vessel type 14.0 % 12.0 % Frequency 10.0 % 8.0 % 6.0 % 4.0 % 2.0 % 0.0 % 2008 2009 2010 2011 2012 Bulk Vessel Container Vessel General Cargo Vessel Offshore Tanker
LOH development last 5 years 50,000,000 100% cost USD per vessel type 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Tanker Container Vessel Bulk Vessel General Cargo Vessel Offshore 2008 2009 2010 2011 2012
LOH development last 5 years
How often do a surveyor cary out a LOH survey? How many of you have done a LOH survey? Stand alone LOH Combined LOH and H&M Any difference in the above?
LOH Trigger Pursuant to 16-1, a Loss of Hire claim is triggered by: Damage to vessel recoverable as per Plan conditions or other agreed conditions. Certain named events. If trigger is based on conditions other than the Plan, these conditions replaces the Plan s Chapters 10-12. Chapters 1-9 remains in force. 8
LOH Calculation of loss of time To be calculated in days, hours and minutes. Time during which vessel is partially deprived from income to be converted to corresponding period of total loss of income. Open or assessed. Normally assessed, which means that the daily amount has been agreed as fixed between Owners and Underwriters. For passenger vessels, variable daily amounts are common. Requires a variable daily amount clause. 9
LOH Deductible period Shall run from commencement of the loss of time. I.e. shall always be placed in the first part of the period lost. No apportionment of time for removal or simultaneous repairs during deductible period ( 16-10 & 16-12). 10
LOH Choice of repair yard Assured s choice. Insurers liability limited to tender requiring least time of those fully allowable under H&M. If other H&M conditions than the Plan agreed: Tender requiring least time plus half of any additional loss of time. 11
LOH Extra costs to save time LoH Insurer liable for extra costs to avert or minimize loss, but only insofar as the costs are not recoverable from the hull insurer. Limitations: Insurer not liable for costs in excess of the amount he would have to pay if measures not taken. If time saved for the Assured (i.e. deductible period or in excess of Loss of Hire coverage) extra costs shall be apportioned. LoH insurer liable for extra costs only, not enhanced voyage costs. 12
Request for survey To: Surveyor XXX Attn: From: Asbjørn Asbjørnsen Your ref: Our ref: Type of survey: LOH Insurance cond.: Norw C 14/90/90 Daily amount USD 20.000 Vessel information: Vessel name : xxx Damage information: Date of casualty: Description of damage: Port of inspection: Ships ETA: Deductible: 14 days Imo No: xxx ETD:
How can we shorten the repair time and keep everybody involved happy?
LOH Timely initial notification Communication between different parties Tendering process Mitigating measures Use of available workforce Documentation from owners Documentation to owners 15
Timely notification What do we mean by timely notification? To have enough time to influence tendering process To have enough time to arrange surveyor Etc. 16
Communication Important to have an open and close/frequent communication between all parties especially in the decision making periode 17
Tendering process Important to get a few offers for repair Repair periode Normal working hrs at the yard Daily penalty Removal time Cost of repair Etc. 18
Mitigating measures Temporary repairs in order to postpone permanent repair to scheduled DD Voyage repair Number of working shifts at yard Hire of additional workers Penalty clauses for delay, to reflect loss of earnings 19
Use of available workforce Hire of additional workers Ships crew Etc 20
Documentation from owners Class documents Survey statements Service reports Prelim H&M reports Offhire statements Etc 21
Documentation to owners Reporting from surveyor Preliminary report(s) Final report after all required documentation is available. Basis for final settlement. Etc. All available reporting/information will be sent from insurer to owner/manager 22
What incentive has the owner to speed up? What incentive has the owner to speed up repairs when LOH daily amount is USD 20.000 and the CP earnings is USD 12.000? Looking at the freight marked and the owner running out of cash What can the LOH UW put on the table in order to speed up repairs?
Attendance onboard How often should the surveyor be onboard? Should we rely only on information received from owners representative?
Reporting Time line in the report Owners work Cargo operations One or more occurrences
Summing up Extremely important to be involved in the repair prosess as early as possible Influence owner to make the right desicion when it comes to chosing repair alternative Contact H&M surveyor as early as possible in order to coordinate repair process. Search marked for spares that can be used, even if only for temporary repairs if cost efficient Most important to be actively involved in the beginning of the repair process if desicions made difficult to change direction of a repair process. Not enough to note down facts have to be pro active 26
Thank you for your attention 27