News

Competitive under pressure

Oct 1 2012
Internal inspection onboard Monica Kosan

Lauritzen Kosan (LK) steps up performance to meet an increasing number and variety of vetting requirements.

A lot has changed since Lauritzen News last quoted Klaus Grøndal, vetting manager of LK, on the subject of vetting requirements in the September 2007 issue.

“While the basic purpose of vetting remains the same,” he says, “the vetting process itself has in the past few years increased tremendously in quality and complexity. Vetting allows the oil majors to perform a risk assessment of vessels and operating practices. Not doing well can have serious consequences, as an unsuccessful inspection can cause the vessel to be rejected by our customers, with loss of goodwill and earnings as a result. Our reality is that ‘doing well’ is becoming increasingly complicated, but we see this challenge as a business opportunity: the better we perform, the more competitive we become.”

Raising the bar

For the oil majors vetting is a defensive barrier – a means of achieving incident-free operation. And looking back over the last few decades, the average number of oil spills has indeed declined.

History has shown that accidents or incidents rapidly shape the way oil majors screen vessels which leads to rapid growth of each oil major’s individual vetting requirements, above and beyond international rules and legislation.

Increasing environmental concerns also increase the stringency with which these rules are applied. “Just five years ago,” says Christian Riis, head of HSSEQ for LK fleet management, “a rejected vessel might have 20 observations, 15 of them related to crew performance, such as checklists not completed.

Now, the game has changed and the bar has been dramatically raised to the point where one or two observations can be grounds to reject a vessel.

So in order to continue having our vessels accepted, we must increase the quality of everything we do. Our crews have responded tremendously well to the challenge of reducing observations. However, there is zero tolerance for variations from the rule book or small mistakes, especially compared to the past.”

Physical inspection of the vessel encompasses a variety of parameters, such as ownership, incident and casualty history of the company, flag registration, crew matrix and experience, and others - each of which could trigger a hold or rejection.

A rejected vessel is required to be satisfactorily re-inspected, which is costly and time-consuming. This makes it even more advantageous to constantly be in compliance.

For a time-charter the oil major performs an inspection itself, but for spot voyages – which constitute the majority of LK’s business – oil majors will often accept the results of other companies’ inspections, which are kept in an industry-wide database.

This means that a rejection by one company can instantly become an industry-wide black mark. Klaus Grøndal points out that automated computer evaluations of inspection results tend to remove human judgement from the equation, making the vetting process increasingly rigid.

Additionally, the growing severity with which regulations are applied increase the chances that rules are perceived or interpreted differently by the inspector and the shipping company.

Read the full article in Lauritzen News no. 17, October 2012 >>>

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