President, Lloyd's Register North America, Inc.
The growth in consultancy is a significant evolution. We are seeing an increased focus on operational performance as well as our core safety role. There’s no doubt that we had been providing this additional support to owners for a long time but now we are seeing the packaging of these services across the board – by class and by other consultants.
Now encompassing myriad roles, what is next for “class?”
LR’s intention is to keep offering technical excellence, to continually improve our service delivery and support innovation.
Are there any game changers looking large in the center porthole?
Stricter emission regulations and higher fuel prices are driving change – change that is a real challenge for our clients as they seek the efficiencies and solutions that will keep them competitive as well as compliant with regulatory requirements. Our challenge is to help them through that decision making process and then throughout their operations to help ensure their ships are as safe and efficient (commercially as well as technically) as possible. This is what we are focused on and we have been making great efforts to ensure that our technical leadership is available to the industry. LNG as a marine fuel is a great example. LR is the leading classification society in the gas ship sector with the largest share of LNG and LPG ships in class. As well as continuing to support safe LNG carriage we are applying our capabilities to the growth in demand for information and expertise to make gas fuelled shipping possible – whether that’s in helping shipbuilders and shipowners manage risk or helping lead the way in supporting major bunkering ports like Singapore and Stockholm - where the LR classed ground-breaking 2,800 passenger LNG fuelled Viking Grace calls everyday – to be prepare for safe LNG bunkering operations. We also don’t want to see any accidents that set back the development of LNG and other alternative marine fuels.
Technology on board vessels is rapidly catching up with that ashore and the slowly declining price of bandwidth is making it more attractive and affordable for operators to use SATCOM to harness that technology. Where does class fit into all of that?
Class has to make sure that it understands technology and its implications. The increasing connectivity is very likely to lead to a wide range of implications for shipmanagement. Conversations about the potential for remotely controlled, unmanned ships are being held – is that really possible? Let’s find out. We think class, as ever, has an important role in helping ensure that regulators, owners, designers and managers understand the risks involved with any innovation.
Staying on the technology theme, as the industry has been faced with simultaneous regulatory and market pressures over the past five years, what do you consider to be the most influential changes to the vessel (technology and/or design) and why?
The simple fact of uncertainty or multiple options in fuel and propulsion choices is driving change where previously, for most, there was little choice. But perspective is important – for most, change will be gradual. Efficiencies are being captured but most important is a change in attitude – within a short space of time fuel has become the big OPEX factor and, combined, with emissions regulation, the industry is changing the way it behaves. Our role is to help the industry make the best possible commercial decisions based on the technical insight and expertise we offer.
LNG as Fuel continues to pick up support. Looking at the looming emission and fuel regulations to and through 2020, please comment on how you see “LNG as Fuel” evolving in the coming six years?
We see an increasingly important future for LNG as a marine fuel and particularly in North America. Right now LNG is being taken up mainly by smaller ferries, by short-haul Jones Act containership operators, and OSVs. Lakes operators are likely to be next. Gas is relatively cheap and abundant in North America – we classed the first LNG carriers and with the largest share of LNG carrier classification we are well placed to offer the gas technology support and risk management that shipping needs as gas—as-fuel evolves. Today we are involved in LNG-as-fuel projects in North America and around the world. Our work with the Port of Singapore is helping set a template for the development of LNG bunkering in major ports.
Slowly – but surely – and certainly here in the United States, the lines of demarcation between ‘Class’ and the regulatory community that they help serve, are becoming blurred. Classification Societies now routinely perform many tasks heretofore the exclusive domain of the flag state and the Coast Guard. As this practice widens, how do you maintain your objectivity and more importantly, who is checking now to make sure the job is being done correctly? Are there checks and balances still in place? If so, how? Are there checks and balances still in place? If so, how?
LR prides itself on 254 years of Independent Third Party status. LR is ISO Certified (by BSI). We’ve been performing as RO for about 100 Countries around the globe—doing Statutory work for many decades (despite USCG initiatives, this is nothing new for us).
USCG delegation to Class is a positive for industry safety due to our expertise and flexibility. LR adapts our Rules and Regulations with regularity throughout the year to keep pace with industry technological advances. On the other hand, the USCG admits that a Rulemaking takes at least two years. With delegation to Class, the agency can husband its resources’ on higher priority issues.
*RO Code (in 2015) has an oversight audit role. We are subject to regional audits, e.g. EMSA. LR was vetted by the USCG for more than two years before they delegated ACP authorization. ACP authorization is associated with an active/continuous USCG oversight program (roughly 10% of the work we perform on USCG behalf). USCG provides feedback reports and face-to-face meetings as part of oversight. Reputation/Technical Competency and Experience/Independence are everything to us (By policy letter in June 2013, the USCG allows alternate design for FOIs and FPSOs which meet a variety of industry standards vs Code of Federal Regulations. USCG is currently looking to accept FOIs in Class as equivalent to CFR inspection (LR is providing input to USCG on this).
Are there roles that Class should NOT take on? If not, why not? Give us some examples.
Class is class and needs to be seen as such. Classification should not be confused with consultancy services offered by organizations that also offer classification services.
The regulatory schemes are many and rapidly evolving. The U.S. Coast Guard, for example, had as many as 68 active regulatory projects on their docket at the end of 2013. Looking globally, what do you consider to be the top two or three regulatory issues that will have the deepest impact on the maritime world, and why?
Foremost by far is environmental agenda—ECA’s, BWM, etc. (many others can be considered here).
Deep impact of environment is due to:
1) technological challenges: e.g. equipment meeting performance criteria/siting equipment on ships (space/systems integration/stability/process change/crew training/record keeping); other issues such as dual fuel storage and separation;
2) disparate regional requirements/enforcement profiles vary/uncertainty due to unclear policies (e.g. does USCG/EPA allow coastwise trading ships to exchange ballast outside 50nm as per the US Regulation or 200nm as per their published enforcement policy?)
3) Each ship expected to add on elaborate systems (versus making shoreside facilities available for all ships); this is inefficient and would be better to seek holistic solutions