Scrubber retrofit delays see huge swathe of the merchant fleet out of service

Delays are mounting for scrubber retrofits. Broking house Braemar ACM is reporting less than half of the planned scrubber retrofits on large tankers have been completed so far. At the current run-rate scrubber retrofits are likely to carry on well into the second half of next year.

Braemar ACM data suggests 32% of the VLCCs, 23% of the suezmaxes and 15% of the aframax /LR2 fleet are likely to be scrubber fitted by the end of 2020.

“Retrofitting so far has been plagued by delays,” Braemar ACM stated in a tanker report. More than 90% of ships have taken longer than four weeks to retrofit a scrubber. This duration includes the time spent waiting, at repair and lay berths as well as in the dry-dock.

These delays were also discussed during an earnings call on Friday with top management at Wartsila, a Finnish scrubber manufacturer.

Earlier in the year, most owners anticipated four weeks as an outside estimate to retrofit a scrubber. Pre-entry congestion and in-yard delays have made it a far more time-consuming effort, Braemar ACM stated.

Commenting on the delays from a legal perspective, Conor Warde, a partner at Mayer Brown, told Splash: “Delays in scrubber retrofits are of course a concern for everyone involved with the vessel. In terms of remedies or recourse for scrubber retrofit delays, this would depend on the terms of the relevant contracts for the most part. From a time charterer’s perspective, this period of delay would likely continue to fall under the off-hire period which would have begun when the vessel went into the yard for the scrubber installation. However, the owner and shipyard would likely agree on liquidated damages provisions to compensate the owner for shipyard or supplier-related delays. These liquidated damages provisions should be included in the installation contract between the yard and the shipowner and would serve as the primary means of recourse for the shipowner.”