US financier seeks basic safety rate

PUBLISHED : Wednesday, 10 November, 1993, 12:00am
UPDATED : Wednesday, 10 November, 1993, 12:00am

US-based shipping financier Paul Slater has called for the creation of a minimum safety rate (MSR) below which ''no responsible operator could possibly hope to recover operating costs''.

Speaking at the International Maritime Industry Forum in London recently, Mr Slater said world trade must bear the proper cost of transportation in well designed, well built, well managed and well operated ships and not expect the shipping industry to continue to subsidise it.

''We have to start somewhere to break the vicious circle which is dragging us all down,'' said the chairman of First International.

''Every major shipping industry body now spends almost half of its valuable time talking about image when they should be discussing how to revitalise our indispensable global industry for the next millennium.'' He lamented the fact that inter-industry arrangements for rewarding risk were so hopelessly outmoded that the world fleet was getting older and older, with little or no chance of changing the trend in a decade or more.

''Despite the best efforts to keep the fleet operational, we all know that the older the vessel, the more likelihood there is of something going wrong,'' he said.

Quality crews were increasingly reluctant to man such vessels and regulations were ''becoming more ferocious in their efforts to clean up the sub-standard ship mess''.

''The downward spiralling public image, therefore continues unless we do something about it,'' he said.

Mr Slater said the MSR was only a starting point and did nothing to improve standard on board vessels.

However, it would provide the basic income required to operate vessels properly and safely in a manner that met the expectations of society.

He said the ''ecologically charged'' environment had created an incremental cost structure that few in the industry had dreamt of a few years ago.

Mr Slater suggested the gathering of information available across the world from serious ship operators and managers on financing costs, insurance costs, manning, victualling, stores and spares, maintenance and repair, and all other costs.

''Then let a senior panel of industry and non-industry leaders sit down with whatever professional advice they need and calculate the minimum rate that different classes of ships, at different ages, need to operate safely.'' He said the group of adjudicators should include bankers and insurers as well as shipping industry specialists.

The MSR suggested by First International is US$35,350 per day for new very large crude carriers, $29,200 for five-year-olds, and $24,450 for 10-year-olds.

For Suezmax carriers, the MSR is $25,525 for new ships, $21,950 for five-year-olds and $19,300 for 10-year-olds.

The rate for new Capesize carriers is $21,450, and $20,250 for five-year-olds and $19,150 for 10-year-olds.

The rate for new Panamax has been pegged at $13,325, and $13,150 for five-year-olds and $11,700 for 10-year-olds.

For Handymax, the suggested rate is $10,925 for new vessels, $10,450 for five-year-olds and $9,600 for 10-year-olds.