THE WORLD'S shipping fleet is growing older and presents a risk to cargo owners who are not always aware of the history of the vessel that is used to ferry their cargo, says Associated Marine m.d. John Hill.
The cost of building new vessels and an excess of tonnage on the seas has led to the average age of ships increasing steadily. Although old vessels are not necessarily a risk - many are well maintained - a number of shipping companies do not spend what they need to on their ships.
Hill says leaking hatch covers, faulty deck equipment and even the general deterioration of the hull are frequent causes of insurance claims.
He says a recent Associated Marine survey of two large SA freight companies showed one had an excellent claims record while the other was faced with rising premiums because of its high claim rate. The difference - the quality of vessels.
Before SA rejoined the international community freight operators had a limited but suitable range of vessels to use. Today tramp steamers regularly call on SA ports offering cut-rate prices to win business.
The trouble with discount rates is that no money is left over to carry out essential repairs. The cost is borne in the long run by the cargo owner, Hill says.
Cargo owners, faced with a declining rand and shipping rates payable in dollars, are tempted by these offers.
The upshot is that losses have increased up to three times over the past year, he says.
Hill warns against using vessels that fly a flag of convenience to avoid strict quality control. Ships operating from ports north of SA have very little controls exercised on them.
Hill says to prevent loss and disruption of business, SA shippers should instruct their shipping departments or agents to carefully check the utilised tonnage of vessels carrying their cargo.
Associated Marine will advise clients on how to reduce their insurance risk. It is a collaboration between insurance giants Commercial Union and Guardian National.
