ISU Annual Review examines the pressure on the salvage industry
Charo Col, International Salvage Union president describes the salvage industry as “under financial pressure” despite gross revenues from all sources recovering slightly in 2017 from 2016 but still weak compared with the period 2013 to 2016.
Competition between ISU members and other sources, fewer major jobs and reduction of income for each service along with income from LOF and SCOPIC at historically low levels mean “It is not an attractive picture for our members” according to Ms Coll. The need for a well-funded professional salvage industry is reinforced however considering that in 2017 ISU members provided services to vessels carrying over 2m tonnes of potential pollutants. The salvage industry’s importance is ignored at everyone’s peril.
Operationally, there is concern about the prevalence of fires on container ships, ISU members often the only ones able to deal with such incidents, their consequences having major impacts on the container shipping industry both financially and logistically.
The ISU’s policy of openness and transparency contrasts with the past where the salvage industry tended to shy away from sharing experiences and provides opportunities to correct often misunderstood and misrepresented images of salvors who save life, protect the environment and save property on a daily basis.
Looking at the figures, gross revenue for ISU members was US$456m in 2017 compared with US$380m in 2016 and while an improvement, still falls short of 2013 to 2015 when annual income was above US$700m. Total number of dry salvages in 2017 was 251 compared with 306 in 2016 and revenue from LOF cases in 2017 was US$54, the lowest since 1999 continuing the downward trend of LOF. Revenue from SCOPIC dropped to US$20m from US$60m in 2016 recording the lowest level since SCOPIC was introduced in 1999.
There were 46 revenue-earning LOFs compared with 34 in 2016 but with a decrease in revenue it means the average revenue from each fell to US$1.6m from US$3.9m in 2016. The value of the salvage industry is made plainly clear with the total of LOF salved values standing at almost US$1bn, an average of US$21m per case meaning the average income (excluding SCOPIC payments) for each – both settlements and arbitrators’ awards - was 5.6% of the salved value, the lowest on record.
By Peter Barker
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