Perspectives and Issues in the Marine Salvage Industry

Marine salvage is the process of recovering a ship after a shipwreck or other types of maritime accidents. Salvage may involve towing, re-floating, recovering cargo, or effecting repairs to a marine vessel. Professional salvors are the people who help to salvage a ship or its cargo. They range from large international companies with considerable capital investment to smaller businesses operating in restricted geographical areas.

In 2020, the revenue of the marine salvage services industry increased by 2.9 percent despite the impact of the COVID-19 pandemic, mainly because the sector is a necessary service. Revenue was expected to increase by 6.8 percent in 2021 as marine trade activity picked up. As the US economy recovers from the pandemic and the destructive impact of hurricanes continues, industry revenue is projected to continue rising to the year 2026 and beyond

Marine salvage is undertaken by a select few companies and professionals. Partly, this is explained by the fact that salvage operations are often tricky and involve highly complex technical and legal issues. The clauses governing the industry, which are intended to keep the maritime salvage field problem-free and fair, are often confusing. The legal implications make it extremely necessary for salvors to deeply understand the concepts, terms, and consequences involved in this unique domain.

In addition, salvage operations are costly not just to the ship owner but to the salvor too, as it requires highly trained staffing, expensive equipment, and a considerable investment of time. To compound matters further, a fixed time frame for the operation is necessary, as that sets a realistic expectation of the salvage duration. The goal of this clause is to protect the ship owner in case a salvage company attempts to delay the operations but still wants to claim the reward. If the salvage work is completed beyond the pre-agreed period, a fine or penalty may be levied on the salvor.

To ensure that both parties, the ship owner and salvor, are adequately covered, commercial salvage operations must be covered by a contract. This ensures the ship owner is covered against exploitation, such as unduly extending the duration of the operation and that the salvor receives adequate rewards for their service.

The open form “no cure, no pay” contract has been the most commonly used for international salvage operations. An example of this type of contract is Lloyd’s Open Form (LOF), also known as Lloyd’s Standard Salvage Agreement.

Although maritime law governing salvage has been operating for several centuries and general maritime law governs operations, for those considering venturing into the marine salvage business, it’s essential to research salvage laws applicable in the proposed area of operation. If salvage activities take place on international waters, they fall under the jurisdiction of the International Maritime Organization (IMO).

Each state has adopted or modified vessel salvage laws in the US to suit local needs. Salvage companies should be thoroughly familiar with them before undertaking salvage operations within the state’s waters or forming a salvage company. The Department of Motor Vehicles or respective state Department of Natural Resources are good sources of salvage law information.

With growing concerns for environmental conservation, the marine salvage industry has shifted from simply saving vessels and their cargo to preventing marine casualties from damaging the local or broader marine environment.

from WordPress https://ift.tt/w6eo18x
via IFTTT