Vetting evolution over the last 20 years

Warwick Norman, CEO, Rightship, talked about the vetting evolution over the last twenty years at the 2017 SAFETY4SEA Conference. Capt. Norman said that the motivation for the creation of RightShip was largely a desire to improve safety standards, in particular around the cape fleet where both BHP & Rio shared a common risk. The success of RightShip tells us is that the industry has changed, said Capt. Norman who believes that  human factor will be one of the next area for vetting reviews and a focus for the future.

Shipping has gone through enormous change over the last 20 years. This change has been driven by the customer, mainly China, and its growth in shipping over these twenty years. Vetting has been driven by the customer. Firstly by the Oil Companies in response to major Oil Spills and the consumers boycotts at the bowser, impacting their bottom lines and reputation. But the Oil business has also changed considerably over the same time, with the now the largest charterer of VLCC being UNIPEC. But we have also seen the fragmentation of the industry with the rise of the traders, State Owned companies and the Majors diverting Non-Core assets allowing smaller players in the marketing, and thus looking for vetting services.

RightShip’s own seeds were sown back further than 20 years, back in 1992 when the ‘Ships of Shame’ enquiry changed the Maritime Regulatory landscape in Australia. Between 1988 and 1991 nearly 100 seamen perished on large bulk carriers, principally off the coast of Western Australia, as a result of substandard and avoidable practices employed on these vessels and terminals – an unacceptable outcome of Australia increasing bulk trades. This prompted the Australian government to undertake a parliamentary inquiry into ship safety, resulting in a 1992 report titled ‘Ships of Shame’. At the time of this inquiry, information on vessels was dispersed and fragmented, and there was no systematic way to identify and track the performance of vessels. A lack of interest by Australian Shippers in the vessel quality was noted, therefore the enquiry urged for greater participation in vetting & selection by the bulk shippers in Australia.

The SIRE Programme was originally launched in 1993 to specifically address concerns about sub-standard shipping.  Since its introduction, more than 180,000 inspection reports have been submitted to SIRE.  Currently there are over 22,500 reports on over 8000 vessels for inspections that have been conducted in the last 12 months. On average Programme Recipients access the SIRE database at a rate of more than 8000 reports per month.

RightShip was established in 2001 by BHP & Rio Tinto. Like a parents’ second child , you have already learned something of your mistakes, and in our case we were lucky to have a well-established model already in place, so we set about to not replicate, but rather build something that could fit the dry bulk industry. Our thinking was not to add another layer to the inspections regimes already in place, but rather to measure and rate the performance of others involved in the safety chain, Class , Flag, Owners , Managers and even Shipyards.

We also introduced a Star or Risk rating, a Classification, what Class Societies used to originally provided, rather than the certification they do today – and I think this is what the customer was after! Along with the Star Rating, we believed that we should recognize other organisations who shared our vision to improve safety performance such as the Green Award, Intercargo and many others to create greater momentum for all. This was hopefully going to reward Owners for the investments in Safety, and that this would somehow create a tiered market so owners would benefit from their investments.

But there is no doubt in my mind that one of the important side effects of the Star rating was the down rating, as this became a tool to achieve compliance with the ISM code requirement for Preventative & Corrective action following a non-compliance. What RightShip provided was the opportunity for even the smallest shipper or Charterer to engage in vetting or Due Diligence on vessels on a system that they could never be able to build or support. But it was not only Charterers who became interested in RightShip, as it was not long before we had Banks, Insurance P & I Clubs, Flag States wanting to understand how a systematic risk tool like RightShip could work for them.

In 2009 we introduced the Greenhouse Gas Emissions Rating to enter the emission debate, and it provided many a feisty conference as people opposed any focus on shipping emissions. Within 8 years it has grown to be used as a vessel selection tool for one in every 5 vessels chartered. More the 6,000 subscribers on the free-to-air platform: shippingefficiency.org, have used it to view almost 310,000 sustainability ratings on vessels. 85 customers use our system not just for safety, but for selection based on environmental sustainability (2.4 billion DWT per annum, 30,000 vessel movements per annum). And again it is being used to provide incentives for better performing ships. What the success of RightShip tells us is that the industry has changed!

In modern days, vetting is more than a service and now smaller players can have access. It is viewed as an essential service to industry using scalable tools & platforms which are customizable to fit individual needs. We’re not just vetting for safety. Vetting platforms have evolved featuring complex predictive analytics but providing with increased granularity on individual vessels and a deeper, more complex understanding of what risk factors affect a vessel’s safety performance and how they interact.

Industry is doing lot of work into the human factors and I believe this will be one of the next area for vetting reviews and a focus for the future. But not before we achieve a much higher level of incident investigation to better analyse marine incidents and the part the human factor played in them.