Section 19.4 Vetting Inspections (RightShip, etc.) and Commercial Implications

Section 19.4 Vetting Inspections (RightShip, etc.) and Commercial Implications

Beyond statutory and Class surveys, bulk carriers are frequently subject to vetting inspections conducted on behalf of commercial entities such as charterers, cargo owners, terminal operators, and P&I Clubs. These inspections aim to assess the operational risks associated with a particular vessel and determine its suitability for a specific charter or trade. For bulk carriers, RightShip is a prominent vetting organization, but other entities also conduct similar assessments.

1. Purpose of Vetting Inspections:

Risk Assessment: To provide an independent assessment of a ship’s condition, operational practices, and management quality from a commercial risk perspective.

Commercial Acceptance: To determine if a vessel meets the safety and quality standards required by a charterer or terminal. A poor vetting outcome can render a vessel commercially unemployable for certain trades or with specific clients.

Due Diligence: For charterers and cargo owners, vetting is a form of due diligence to protect their interests, cargo, and reputation by ensuring they use safe and well-managed ships.

Loss Prevention: For P&I Clubs and insurers, vetting can help identify high-risk vessels and reduce the likelihood of claims.

2. Key Vetting Schemes for Bulk Carriers:

RightShip:

Overview: RightShip is a widely recognized maritime risk management and environmental assessment organization. Its vetting service is used by many major charterers, particularly in the dry bulk sector.

Risk Rating: RightShip uses a sophisticated algorithm (the “RightShip GHG Rating” for environmental performance and a predictive “Safety Score”) to assess vessels. They also conduct physical inspections.

Vetting Process: Charterers can request a RightShip vetting for a nominated vessel. RightShip reviews various data points (PSC history, Class records, incident data, company performance, age, Flag, etc.) and may require a physical inspection by an accredited inspector.

Outcome: A vessel may be deemed “acceptable” or “unacceptable” for a particular charterer based on RightShip’s assessment. The Safety Score (1 to 5 stars, with 5 being best) provides an indication of the vessel’s risk.

Focus Areas: RightShip inspections are comprehensive, covering ISM implementation, operational practices, structural condition, machinery reliability, crew competency, and specific bulk carrier concerns like hatch covers and cargo hold condition.

Other Vetting Processes:

Charterer-Specific Vetting: Some large chartering companies have their own in-house vetting departments and inspection programs.

Terminal Vetting: Certain terminals, especially those handling sensitive or high-value cargoes, may have their own inspection requirements before allowing a vessel to berth.

P&I Club Condition Surveys: P&I Clubs may require condition surveys, especially for older vessels or those with a poor claims record, to assess risk before providing or renewing cover.

3. The Vetting Inspection Process:

Nomination: A vessel is typically nominated for a vetting inspection by a charterer who intends to use the ship.

Inspector Appointment: An independent inspector, accredited by the vetting organization (e.g., RightShip) or employed by the charterer, is appointed.

Scope: The scope is usually based on a standardized checklist or questionnaire (e.g., RightShip’s Ship Inspection Report Programme – SIRP, or a charterer’s specific questionnaire). It covers a wide range of safety, operational, and management aspects.

Onboard Inspection:

Opening Meeting: The inspector will meet with the Master to explain the purpose and scope of the inspection.

Documentation Review: Extensive review of certificates, logbooks, maintenance records, ISM documentation, crew qualifications, training records, and previous inspection reports.

Physical Inspection: A thorough inspection of the entire vessel, similar in depth to a detailed PSC or Class survey, but with a strong emphasis on operational practices and the effectiveness of the SMS.

Operational Tests: Testing of critical equipment.

Crew Interviews: To assess knowledge, familiarization, and safety culture.

Focus on Management Systems: How well the company’s SMS is implemented onboard.

Closing Meeting: The inspector will discuss their findings, observations, and any identified deficiencies or areas of concern with the Master.

Report: The inspector submits a detailed report to the vetting entity, which then makes an assessment of the vessel’s suitability.

4. Common Focus Areas and Potential Issues in Vetting Inspections: Vetting inspectors often focus on:

Effectiveness of the SMS: Not just the paperwork, but how it’s actually working in practice.

Maintenance Standards: Evidence of a proactive maintenance culture.

Crew Competency and Familiarization: Particularly with emergency procedures and critical equipment.

Bridge and Engine Room Procedures: Watchkeeping standards, passage planning, machinery operation and maintenance logs.

Structural Condition: Hatch covers, coamings, cargo hold structures, ballast tanks (especially for bulk carriers).

Cargo Worthiness: Suitability for the intended cargo, cleanliness of holds.

Safety Culture: Overall attitude towards safety onboard.

Past Performance: PSC detentions, previous vetting observations, and incident history.

Specific Charterer Requirements: Any particular standards or concerns of the charterer requesting the vetting.

5. Commercial Implications of Vetting Outcomes:

Acceptance/Rejection: A “pass” or “fail” from a vetting inspection directly impacts the vessel’s ability to secure a particular charter.

Trading Restrictions: A poor vetting record can limit a vessel’s trading opportunities, as many major charterers will not accept ships that do not meet their vetting criteria or have a low RightShip rating.

Hire Rates: Vessels with consistently good vetting records may command better hire rates.

Insurance: P&I Clubs and H&M insurers may consider vetting results when assessing risk and determining premiums.

Company Reputation: A company’s overall vetting performance affects its reputation in the industry.

Pressure for Improvement: Negative vetting outcomes put significant pressure on owners and operators to improve standards.

6. Preparing for Vetting Inspections:

Continuous Readiness: The best preparation is to maintain the vessel to high standards at all times, in full compliance with statutory requirements, Class rules, and industry best practices.

Understand Vetting Criteria: Be familiar with the requirements of major vetting organizations like RightShip and any specific charterer’s standards.

Proactive SMS Implementation: Ensure the SMS is robust and effectively implemented.

Thorough Record Keeping: Maintain comprehensive and accurate records.

Pre-Vetting Self-Assessment: Conduct internal audits or self-assessments using vetting questionnaires to identify and address potential issues.

Crew Training and Briefing: Ensure the crew is well-trained, familiar with their duties, and prepared to answer questions confidently and accurately. Brief them on the importance and process of vetting inspections.

Transparency and Cooperation: Be open, honest, and cooperative with the inspector.

Address Previous Observations: Ensure any observations or deficiencies from previous vetting, PSC, or Class surveys have been properly addressed and closed out with documented evidence.

Vetting inspections are a critical commercial reality for bulk carriers. A positive outcome is essential for maximizing a vessel’s employment opportunities and profitability. The Master plays a key role in preparing the vessel and crew, managing the inspection process professionally, and ensuring that the ship always presents itself in the best possible light.