Tanker Shipping & Trade

November 19, 2015

London

Fritz Heidenreich

Founder & President

Q88 LLC

Anticipating & Mitigating the Risk

of Failing Vetting Inspections

2

Leading Maritime Solutions Provider with 1,100+ Clients

• Maritime experts

• 190 years of industry knowledge

• 24/7 global support

• > 96% retention rate

About Us

Tanker Operators

Q88.com

Dry Bulk Operators

Q88Dry.com

Commercial Management

Q88VMS.com

Cargo Handling

Milbros.com

3

Events in Our Industry

4

Reducing Accidents

Up to 80%

of oil spills

are caused by

human error

El Faro

Hans Hedtoft (1959)

5

OPA

COFR

OCIMF

PSC

MARPOL

SOLAS

STCW BWM

CLC

CAP

CAS

CSR

EIAPP

ECA

IEEC

IAPPC

AISGMDSS

IOPPC

ISSC

LRIT

eNOA

ITOPF

MLC

SOPEP

COC

VGP

What Has Followed

TMSA

DHSIRE

Officer Matrix

CDI

6

Seaborne Oil Trade vs. Spills

Source: ITOPF

7

Vetting Requirements

8

Vetting Under the Hood

Vessel Acceptable?

9

Vetting Criteria

10

OPERATOR

Vetting in Detail

SIRE/CDI

PORT STATE

FLAG STATE

CLASS

CHANGE

OWNER

CAP

CASTMSA

AGE

HULL

P&I

OFFICER

MATRIX

CASUALTIES

TERMINAL

FEEDBACK

CERTIFICATES

CONDITIONS

OF CLASS

DRY DOCK

NEW BUILD

D&A

POLICY

CARGO

SPOT-COA-T/C

CLASS

SURVEY

DETENTIONS

HVPQ

Q88ITF BLUE

CARD

UKC

IGS

SMS

PIRACY

ENVIRONMENTAL

11

Port State Control Resources

Sources: cgmix.uscg.mil and parismou.org

12

Oil Company Age Restrictions

0

5

10

15

20

25

30

35

40

BP

LN

G

INE

OS

LN

G

CO

P

P66

Gas

AD

NO

C

Bore

alis

BP

LP

G

Ch

evro

n C

PP

-FO

B

Gazp

rom

INE

OS

LP

G

Lu

koil

OM

V G

as

Petr

onas

TO

TA

L

TU

RP

AS

Chevro

n C

PP

Repso

l

CE

PS

A >

30

k

CIT

GO

EN

OC

Fort

un

P66

PR

EE

M

SA

RA

S

Sta

toil

TO

TA

L >

30k

YA

RA

Ma

rath

on O

il

OM

V

TO

TA

L D

PP

13

Oil Company CAP Requirements

14

SIRE Stats & Costs

SIRE Stats:

• Inspections: 19,814

• Vessels: 8,124

• Inspections/Vessel: 2.44

• Report Downloads: 6.2

• Vessel Downloads: 15.2

Inspection Costs:

• Inspection: $5,000

• Vessel: $12,200 per year

• Industry: ~$100 million per year

Sources: OCIMF SIRE Factsheet 2014

$800

$60

Ship Owner OCIMF Member

15

SIRE Inspection Analysis

4

5

6

7

8

9

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Avera

ge #

Ob

serv

ati

on

s

Vessels Age

Average # Observations vs. Vessel Age

85% Correlation

16

Observations Pre/Post Dry Dock

0

1

2

3

4

5

6

Pre-Dry Dock Post-Dry Dock

5.90

4.58

Ave

rage

# O

bse

rvat

ion

s

22.3% reduction

17

Officer Matrix Compliance Analysis

88%

78%

72%

57%

43%

11%

1.8%

Overall

18

Compliance Analysis: Oil Majors88%

80%75%

72%

59% 58%

49%

36%

19

Vetting Performance

Source: The Boston Consulting Group

20

Excel is Not a Management System

• Excel reports are static & out of date

• Not auditing capabilities

• Searching is limited

• No version control

• Security concerns

• Prone to Errors

• Input > Output

• No alerting

21

Vetting Analytics

• Oil companies have been using them for years

• Spent millions

• Data on 10,000 tankers

• Ship owners need similar systems

• Cost of failing vetting inspection is great

• Lost cargo opportunities

• Longer ballast legs

• More waiting time

• Solutions exists to help manage this

22

Vetting Analytics

23

Vetting Analytics

24

Vetting Analytics

25

Conclusions

• Your vessel is only as good as its last inspection.

• Your vessel might be fine but not if your data is incorrect/missing.

• Throwing more money at maintaining the vessel does not

correlate to a more acceptable vessel.

• A proper management system and culture is one of the biggest

factors in having your vessels accepted for business.

Tanker Sh ipp ing & Trade Presen ta t ion

Questions?