Rise of the third umpire in shipping

Eniram’s Captain Melvin Matthews questions the role of classification societies in the 21st century.

To understand the significance of a third umpire in the shipping industry one must first understand what brought about the advent of the third umpire in games such as cricket. In cricket, in the midst of a World Cup campaign at the moment, there usually were two umpires on the field who make decisions on the game. Whatever decision the two umpires made was final even if they were considered controversial. This changed with advanced technology: a third umpire now sitting outside the field with access to television monitors could easily review the game and give a much more accurate decision

Classification societies have played a major role in shaping the shipping industry and they have for decades played an incredible role of setting and maintaining the standards at the highest level. Classification societies are so deeply ingrained in the DNA of the industry that for every ship they set technical rules, confirm that designs and calculations meet these rules, survey ships and structures during the process of construction and commissioning, and periodically survey vessels to ensure that they continue to meet the rules until the end of their life. Without class certification the vessel cannot be deployed for business.

Classification societies have enjoyed the unchallenged respect of shipowners. The reason for this is – for solutions to problems, answers to questions, advice and for almost everything else, the first place the shipowner turned to, is class. As a result the classification societies developed not only excellent classification and certification services but also in many cases extensive consultancy expertise. They developed a reputation of being the undisputed ‘guardians of the industry’.

Of late however classification societies have realised that it is increasingly lucrative to have other revenue streams besides their core area of ship classification and certification. This has meant subtly promoting their consultancy business and developing advisory business streams in areas such as energy efficiency, fuel saving, operational optimisation, new ship design, etc.

With classification societies appearing to be chasing other business streams for revenue, shipowners no longer seem to have the confidence and devotion they once had. They are now looking at alternate sources to find solutions to their problems. The latest technology has given much smaller companies the capability to offer these services in their own specialist areas. These companies have developed tools specifically to help ship owners who are either sceptical of the advice offered by classification societies or find their extended services controversial. There is now an increasing trend and in fact several cases of ship owners opting for such boutique companies over well-established classification societies for the services and assistance they seek.

For instance, companies that specialise in performance management are increasingly approached by ship owners as first choice to measure or monitor performance which in the past would have fallen into the lap of classification societies. Niche companies with their more accurate tools and capabilities are now called upon to play the role of the third umpire in the industry. Such companies are now frequently contracted for projects such as measuring the impact of energy saving devices retrofitted, paints applied or modifications made. In most instances they partake as independent entities between a ship owner and supplier with their findings being accepted as accurate and impartial. What is quite striking is shipowners have not limited themselves there, they now have also started engaging white shoe consultancy firms from outside the shipping industry, virtually unheard of earlier.

Are classification societies, after enjoying nearly a century of reverence and loyalty, slowly being relegated to play second fiddle? In their core area of classification and certification, their reputation for being technically objective and logical will probably continue, however no matter how deep we bury our heads in the sand, to the ship owner what clearly appears to be fading is the earlier unquestioned aura of being fair, unbiased and impartial.

Back to top button