Upstream Marine, The Quintuplex Conundrum and Big Data

Those of us in the maritime industry know well that the life-cycle of a ship is measured in discrete chunks of five year periods. "Class renewal", "special survey", these are the points at which regulators determine the seaworthiness of the vessel and her fitness for continued service. Of course that process runs effectively continuously in reality due to annual surveys plus port and flag state inspections so what's so special about the 'special' survey point?

Let's forget about the technical aspects and the wonders of objective survey against international standards and cut straight to the chase. It is all about cost. It is a high cost and in the present market presents as a 'go, no go' decision point for many owners. The costs in many cases can run into 7 figures and at the least into the high 6 figure area due to technical complexity of the vessels and their position point in the survey cycle. 1st special through 2nd, 3rd, 4th and more represent ever increasing cost levels as simple functions of age deterioration and ever more complex and demanding standards.

Whether 6 or 7 figures, there are few owners in this market who can absorb this cost. Their cash flows headed in the wrong direction a long time ago with profitability following. Their backlog of secured work has shrunk to scarily low levels. Their pipeline of possible work is in many cases more visionary than tangible.

Some owners will traditionally capitalise class renewal costs. Try doing that in today's market, especially for a vessel laid up, warm or cold with questionable prospects of utilisation or one that is working but losing money every day. Others treat it as a cash item traditionally fed from income accrued and or amortised. Same issues.

Cutting to the chase again, these are costs that cannot be avoided if a vessel is to be maintained ready and fit for service. The standards are there for a very good reason. IMO through flag states, classification societies, insurers, underwriters and ultimately clients form a chain that cannot be easily broken. Remove one link of the chain and pain results.

Not having ready access to so called 'big data' is a handicap to an individual like me trying to objectively assess the market with a view to making bold statements about the impact of all of the above on local, regional and international markets, but some parties do have that access.

May we please see some verifiably sound analysis? We need it and we need it now. Whether owner, charterer or financier, we need it.

This article is aimed at getting the attention of the holders of big data covering the upstream marine arena. Come on folks, run the numbers, provide the analysis and give us an objective appraisal on this key aspect of upstream life cycle health.