(Article originally published in the May/June 2017 edition)
A Former Surveyor Looks at The Origins and Current Status of Classification Societies.
It’s out. The List has been posted!” proclaimed a loud voice in a coffee house full of regal gentlemen – and maritime executives – as they partook of Edward Lloyd’s high-octane libations. The year was 1702. Here, one of history’s first-known “register of ships” began circulation, although not officially called that until 1764 when first published as Lloyd’s Register of Shipping. As was customary in that era, merchant captains, underwriters, and ship and cargo owners would frequent such coffee houses in London to discuss commerce.
Yet it fell to the insurers, who signed under the text of contracts (hence the term “underwriters”) to require a system to assess and classify risk beyond a ship captain’s experience. Classification was based on hull and equipment notations (with “A” being the best for hull and “1” for equipment). Together they determined a vessel’s “fitness for intended service.” “A1” became shorthand for “first class” or “highest class” – and subsequently for the world’s best steak sauce.
As with most commercial endeavors, there were moral hazards, and by the mid-19th century it was common practice for unscrupulous owners to over-insure their assets to the point that the vessels, referred to as “coffin ships,” were worth more as artificial reefs than when sailors made it home alive.
Enter Samuel Plimsoll, who – reduced to poverty in youth – later rose to Member of Parliament and fought as a social reformer and voice for the destitute. Determined to end the practice of “coffin ships,” he introduce legislation in 1875 mandating the use of a “load line,” a technique used since the Middle Ages by the Venetian Republic to indicate sufficient reserve buoyancy. When his proposal was rejected, he allegedly waved his fist at the Speaker and proclaimed “Villains!” – referencing the many MPs in attendance who were also shipowners.
Plimsoll’s defiance won out the following year with the passage of the “United Kingdom Merchant Shipping Act,” in which the load line mark – subsequently referred to as the “Plimsoll line” – became compulsory.
From these events evolved the modern classification society into what it is today: a non-governmental, technical organization com- posed of highly skilled professionals that establishes, maintains, and impartially and periodically conducts surveys, in accordance with technical and statutory standards, of vessels and offshore facilities. Many have expanded beyond maritime to industries like oil and gas, power generation and manufacturing.
Recognizing that many flag administrations do not have sufficient technical experience, manpower or global coverage to conduct statutory inspections, international conventions allow flag states to delegate certain inspection and certification authorities to so- called Recognized Organizations (ROs). In most cases, RO status is given to a class society.
“Classification societies have always been and will remain an important part of the safety net surrounding commercial shipping,” says Rear Admiral Paul Thomas, USCG Assistant Commandant for Prevention Policy. “The Coast Guard leverages class societies to bolster our capacity and augment our expertise to govern an increasingly complex industry.”
There are currently about fifty class societies, only twelve of which meet the stringent requirements of membership in the International Association of Classification Societies, which emphasizes that 90 percent of the world’s cargo-carrying tonnage is classed by its members. Here are profiles of the five biggest and oldest, in order of their founding.
The Big 5
Founded in 1760, Lloyd’s Register is the oldest class society in the world. Nicola Eyles, Head of Brand & External Relations for Marine & Offshore, sees two big challenges ahead for shipowners: The Ballast Water Management Convention, which enters into force this September, and the global sulfur cap of 0.5 percent,
which enters into force on January 1, 2020. In devising solutions, LR is coordinating with clients to ensure surveyor availability by staggering fleet modifications.
LR has led the way in the issuance of two guidance documents for cyber-enabled ship design and operations, as well as through its Connected Assets Big Data Platform. It is also pioneering the use of remote operated vehicles (ROVs) for in-water surveys while re- searching the use of crawlers, drones and wearable cameras for live remote inspections.
As the second oldest class society, Bureau Veritas has expanded considerably beyond its marine origins. The group describe itself as the world’s largest testing, inspection and certification body with revenues of €4.55 billion in 2016 and 66,000 employees worldwide. As the only class society that is also a publicly-listed company, BV claims the largest share of the order-book for LNG-fueled ships and is broadly represented in all major ship categories.
BV has identified two main growth drivers – digital transformation and a wider scope of services. Its next-generation Asset Integrity Management (AIM) collaborative designing platform was launched in March. The Veristar AIM3D renders 3D models that in- corporate smart data for risk-based inspections and condition-based maintenance. The use of virtual reality (VR) is part of the digital transformation, which benefits both clients and staff by offering mobile applications with engineering approval times reduced to around four weeks. BV is also leading an IACS working group on cyber safety and security to revise and address issues not covered by Unified Requirement E-22.
Now celebrating its 150th year, the American Bureau of Shipping maintains the legacy of the New World’s global influence. It was there with the pioneers of oil and gas wildcatting and released the industry’s first Offshore Rules. Chief Technology Officer Howard Fireman says clients look to ABS for practical, money-saving solutions such as a shift from calendar-based to continuous, condition-based surveys and ABS’s CyberSafety® program as a guide against cyber attacks. Its Nautical Systems software suite collects data from embedded sensors to demonstrate statutory compliance while improving the accuracy of reporting and analysis.
ABS has laid claim to “Game of Drones” by releasing “Guidance Notes on Using Unmanned Aerial Vehicles” in support of ABS FutureClass™. “UAVs provide a safer and more efficient platform for the next generation of surveys and inspections,” says ABS Vice President and Chief Surveyor Joseph Riva.
As a result of its 2013 merger, DNV GL is now the largest class society in terms of gross tonnage and has 50 percent more port surveyors than its next-closest competitor. It’s also a leading force in alternative energy and green shipping and has publicly stated its intention to become “carbon neutral” by 2020.
DNV GL has partnered with Microsoft Azure to launch a soft- ware-as-a-service solution (SaSS) called Veracity, designed to lever- age Big Data. An approval-in-process was given for a double-hull LPG carrier design as well as an asymmetric stern design optimization to offset propeller wash. DNV GL claims to be the first in class to offer drone-based tank surveys with several already credited and a network of trained drone pilots in Piraeus, Singapore, Houston and Shanghai. VR will be integrated to help track more thorough onboard inspections and link to the office with 3D-approved drawings for real-time guidance.
DNV GL is also rolling out digital certificates that conform with the updated “Guidelines for the Use of Electronic Certificates,” is- sued by the IMO in April. Two recent studies, “Technology Outlook 2025” and “The Future of Spaceship Earth,” reinforce DNV GL’s expertise in situational awareness and futuristic insights.
At Japan’s ClassNK, whose biggest market is bulkers, Chairman Koichi Fujiwara has been instrumental in expanding a pool of skilled human resources and global service professionals. Its ShipDC (“ship data center”) collects Big Data from a variety of sources to unlock new connectivity capabilities.
ClassNK was part of the research effort that resulted in the publication of BIMCO’s “Guidelines on Cyber Security Onboard Ships – February 2016,” and it collaborated with the U.S. Maritime Research Center to develop a platform of verifiable facts within a Maritime Cyber Assurance network. Its CMAXS suite optimizes condition-based monitoring and engine-room operations by collecting equipment sensor data that can provide previously impossible early abnormality detection.
In March it released the world’s first “Guidelines for Liquid Hydrogen Carriers” and recently gained authorization from the Liberian Registry to provide Liberian-flagged vessels with electronic certificates, aptly named ClassNK e-Certificates.
Rules of the Road
As each society establishes its own technical standards, referred to as “Rules,” let’s recap a few unofficial Unified Requirements from this former surveyor:
Rule #1 – Be good to your surveyor!
Rule #2 – Revert to Rule #1.
Rule #3 – As always in life, the better you know the Rules, the better you can navigate with them.