A CARGO owner faces great risk in case of an accident if he uses a vessel which does not have P&I (protection and indemnity) coverage or hull insurance, warns Michael Ellis, general manager of the Salvage Association. Mr Ellis said European shipowners estimated that there were about 150 vessels trading in North European waters without P&I coverage and about 250 vessels without hull insurance. ''And the onus is on cargo owners to check whether the vessels had coverage, especially if they were getting a really cheap rate,'' Mr Ellis said at a recent seminar organised by the Hongkong Shipowners Association. He said he believed that there were some ships which did not have insurance to meet losses in a collision. Mr Ellis said the ageing world fleet, 30 per cent of which was between 15 and 19-years-old, was inconsistent with the repair market. And the freight market was not healthy enough to sustain the world's fleet replacement programme. ''Good ship owners are suffering from rotten ships depressing rates from the good rates they deserve,'' Mr Ellis said. Between January last year and April this year, the Salvage Association received initial instructions from 204 parties to carry out structural condition surveys. But the association had carried out only 147 surveys, with three more surveys in hand, and another 28 surveys to be carried out soon. However, 26 parties had not followed up on their initial instructions, showing that they might have changed to other classification societies, Mr Ellis said. Despite new rules in the shipping industry, some ships evaded regulatory controls as the rules were not evenly applied, he said. Mr Ellis said a typical example was a 20-year-old bulker, considered in the high-risk category, which changed from one classification society to another so that it could pass it fourth special survey. Such vessels should be considered suspiciously because even if they had replaced parts with new steel, they could also be building new stresses into the structure, he said. Meanwhile, Salvage Association chairman Brian Roddick said he would like to see the International Association of Classification Societies' (IACS) plans to improve class standards to become a reality. While praising IACS' initiative to improve class standards, he said what the market now wanted to see was implementation. ''Besides class standards improvement, the market also wants to see improved maintenance, a scrapping programme and improved crewing,'' he said. The shipping industry badly needed a scrapping programme as there was too much old tonnage on the seas, he added. Mr Roddick said the quality of crewing also was important as there had been many cases where there had been eight to 10 different nationalities on board one ship, resulting in lack of communication. According to statistics presented by Mr Roddick, vessel losses in recent years were mostly between the ages of 15 and 24 years. Between 1976 and 1992, there also had been a 300 per cent rise in engine repair costs, he said, adding that in some cases, the price of engine spares had risen by 600 per cent.