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Keith Wallis - Monday 17 December 2007

Hongkong Salvage & Towage, the territory’s largest towage company, is mulling plans to expand its fleet to match the growth in oceangoing ship movements at ports in southern China’s Pearl River estuary.

The firm, which is controlled by HUD, a 50:50 joint venture between Swire Pacific and Hutchison Whampoa, said its existing harbour tug fleet averages up to 100 tug movements per day.

HUD Group managing director Francis Cheung told Lloyd’s List that he expected to see continued significant growth in the greater Pearl River Delta ports and thought Hong Kong would continue to play a major role. “I anticipate a fleet expansion and replacement programme to match these trends,” he says. “We expect to maintain our status as the leading tug company in Hong Kong, and will continue to operate one of the youngest fleets in the world.”

Hongkong Salvage & Towage operates 13 tugs which have an average age of about seven years. The vessels include one tug which is on standby for emergency services outside the port.

Most of the company’s focus is serving containership traffic entering and leaving the Kwai Chung container terminals, although the tugs also serve a myriad of smaller, mainly bulk cargo, facilities. The tugs cover an area from Tap Shek Kok to Tolo Harbour and encompasses Victoria Harbour, Tsing Yi and Lamma Island.

The increasing size of oceangoing vessels, especially boxships, has led to the development of larger, more powerful tugs. Seven tugs in the Hongkong Salvage & Towage fleet provide 4,000 BHP and have a bollard pull of more than 50 tons.

Mr Cheung believed the trend towards more powerful tugs would continue. “Some 20 years ago we were building tugs of 2,400 BHP and these were the most powerful in the area,” he says. “Now the most common tugs deliver 4,000 BHP, but with the advent of larger container vessels I have no doubt we need to respond with more powerful and versatile tugs.”

The firm has a small but important international operation with Hong Kong-based tugs recently deployed to China and Russia. Hongkong Salvage & Towage also has contracts in the Middle East, where two salvage tugs, the 1994-built vessels Mai Po and Shek O, have been operating for several years.

Over the past two years, the company has become a more environmentally-aware and responsible concern, embarking on a campaign to measure and reduce its carbon footprint.

Mr Cheung says: “It is our ambition to become the world’s first carbon-neutral tug company.”

He adds: “We have published an annual environmental report for the past three years and we are one of the few groups in our industry to do so. We have changed to energy-efficient lighting and constantly strive to reduce carbon emissions and we try to offset the emissions which we cannot avoid.”

source: Lloyd’s List

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Shipowners have contested the new European Commission policy stating that towage can in certain cases be shielded from the full force of competition law because it is a service of “general economic interest”.

The assertion, contained in the latest Brussels port policy communication, is wrong because towage is purely a commercial service, the European Community Shipowners’ Association claims.

“Towage is not a service of general economic interest,” said Ecsa secretary general Alfons Guinier.

“For pilotage we think there is more evidence than for towage. In practical terms towage is a commercial service.”

The commission definition groups pilotage and towage together as services with a strong link to maritime safety. Mooring, on the other hand, is considered to have only a weak link.

“Technical-nautical services are pilotage, towage and mooring,” the policy document said. “Often those services are also linked to port safety. This link is much stronger in the case of pilotage and towage than with regard to mooring. Such activities may either be provided by the public administration or constitute services of general economic interest.”

The commission goes on to state that while EU laws on freedom of establishment apply to all technical-nautical services, monopolies may be justified “to the extent that they are necessary and proportionate for the provision of the service in question”.

For shipowners keen to inject as much competition as possible into the towage market, this phrase could be misused in order to set worrying precedents.

“Defining towage as a service of general economic interest could lead to abuse,” said Mr Guinier.

Tugowners’ representatives say the link established by the commission is self-evident. “Towage does provide a service which is one of general public interest,” said Andrew Dalrymple, honorary chairman of the European Tugowners’ Association.

“It has a high level of safety provision and is very much in the interests of shipowners.”

Compulsory towage is rare and is imposed at the discretion of the port authority, usually when hazardous cargo is being shipped, he pointed out.

“The commission is only basing its statement on [European Court of Justice] case law,” said Hugo Callens, tug association secretary-general. “I don’t think this will make much difference in the way we operate now.”

When is competition among towage providers desirable? This is the key question, and here there has also been some movement within the commission.

Mr Dalrymple points out that the Brussels authorities no longer use a one-size-fits-all definition of the towage market based on tonnage and passenger throughout.

Previously, EU officials believed competition was desirable when certain thresholds had been breached, whereas now they admit ports vary significantly and must be judged on their individual merits.

“A UK port handling nuclear waste will have very few ships but the cargo is very dangerous, [therefore requiring towage] whereas a major port such as Dover has thousands of ship visits from vessels which are highly manoeuvrable,” Mr Dalrymple said.

If the need for competition among towage providers is contested, the courts and ultimately the European Court of Justice will be required to decide. The commission’s new policy document will however be used as guidance when judges make up their minds.

source: Lloyd’s List

The Queensland Court of Appeal has upheld a decision in favour of a Malaysian shipowner whose vessel was badly damaged when one of the two tug boats helping to berth it collided with it following a steering control failure on the tug.

The incident occurred in February 1995 while the dry bulk coal carrier Pernas Arang was entering the Dalrymple Bay Coal Terminal under pilotage. As the tug was taking up position, it lost steering control and collided with the Pernas Arang, causing substantial damage to the bulk carrier.

The shipowner claimed damages from the tug operator under the ‘due care and skill’ requirements in the Trade Practices Act, which applies to contracts under A$40,000 (S$xx) for the supply of services. The towage contract was worth A$12,500.

The tug operators argued that they were exempted from liability under the UK Standard Conditions (which was incorporated into the towage contract) as the damage was caused ‘while towing’.

A tug is considered to be ‘towing’ when it is ‘in a position to receive orders to commence pushing, holding, moving, escorting, or guiding the vessel or to pick up ropes or lines’.

However, under the Trade Practices Act, any clause in a contract for the supply of services that purported to exclude, restrict, or modify the due care and skill warranty in the Act is void.

But the phrase ‘contract for the supply of services’ in the Act does not apply to a contract that was ‘for or in relation to the transportation of goods’. The word ‘goods’ is defined in the Act to include ’ships’ and ‘minerals’.

The tug operators therefore argued that the Trade Practices Act did not void the exclusion clause as the towage contract was not for the supply of services but was in relation to the transportation of either the ship or its cargo.

At first instance, the Supreme Court of Queensland found that the tug was negligent for failing to take timely action to stop the tug or manoeuvre it away from Pernas Arang once steering control was lost. (See Admiralty Casebook, May 18, 2007)

The court ruled that the tug did not cause the damage ‘while towing’ because it was about 150 metres away from the vessel when its steering controls failed and once that happened it was not in a position to receive any direct order from the ship or pick up ropes or lines.

Even if the tug was considered to have been towing the vessel, the Trade Practices Act would void the exclusion clause, said the Supreme Court, which rejected the argument that the towage contract was to either transport the vessel or its cargo.

The tug operators appealed but lost. On the question of whether the exclusion clause applied because the collision occurred ‘while towing’, the Court of Appeal ruled categorically that the tug boat never reached a position to commence pushing or moving the bulk carrier or to pick up ropes or lines.

The court pointed out that past decisions have consistently held that to be in a position to receive orders or pick up lines or ropes, a tug not only had to be close enough to a ship at ‘hailing distance’, but must also be ‘ready and able’ to do so.

The tug in this case was proceeding to a point to where it would have been close enough to accept orders directly from the bulk carrier but it never reached that point. Instead, its steering gear failed about 150 metres from the vessel and from that point it was never in a position to accept any direct order, said the Court of Appeal.

As the tug was not ‘towing’ the vessel when the collision occurred, the exclusion clause in the UK Standard Conditions did not apply, which meant that there was no need to consider if the Trade Practices Act voided the exclusion clause.

However, the Court of Appeal went on to rule that the Supreme Court was not wrong when it decided that the Trade Practices Act voided the exclusion clause.

The appellate court flatly rejected the argument that the Trade Practices Act did not apply because the towage contract was not one for services but was in relation to the transportation of the vessel itself or the goods that it was going to load.

To consider a towage contract to be in relation to the transportation of a ship or the goods it was going to carry is as absurd as saying that a contract to refuel or repair a ship is a contract in relation to the transportation of the ship or its goods, said the Court of Appeal.

PNSL Berhad v Dalrymple Marine Services P/L; PNSL Berhad v the Owners of the Ship ‘Koumala’ (2007) QCA 429, Nov 30, 2007 (www.austlii.edu.au)

The writer, a law graduate, contributes law reports to the media

Author: Selva Kumar
Source: LawNet

• Sri Lanka Shipping tugs to tow oil rigs.

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These movies really put things in perspective. Höegh Autoliners‘ car carrier ‘Höegh Transporter’ being towed in the Bay of Santander.

The Indonesian naval ship that ran around near Queensland’s Fraser Island a week ago will be towed to Brisbane later this evening.

The Australian Navy says a tug boat is en route to Inskip Point to tow the Arung Samudera south where it will be berthed at Bulimba.

They say the Indonesian Government’s negotiations with possible repair contractors are continuing, but the ship will not be fixed in time for it to participate in APEC activities in Sydney.

Commander Forbes Peters says good conditions are predicted for a smooth salvage operation.

“The ship is expected to be completely afloat on the high tide we have this evening,” he said.

“The Indonesians have planned to conduct the salvage tonight because it’s full moon, high tide and a very gentle breeze.”

Commander Peters says they expect a high-tide pull off at around 7:00pm AEST this evening.

source: ABC News

Tags : salvage, schooner, Rainbow Beach, KRI Arung Samudera, towage

Following the news that Fairmount Heavy Transport’s heavy lift vessel Fairmount Fjord, currently under conversion at Malta Shipyard, has been hit by a series of delays, and the consequent termination of a transportation contract for the jack-up rig ENSCO 100 from West Africa to Rotterdam, ENSCO has awarded the towage contract for the rig to Fairmount Marine BV.

Fairmount Alpine, one of the Fairmount’s 200 tonne bollard pull ocean-going has been despatched from her location in Cape Town for rendez-vous with the rig in Port Gentil area.

As soon as final preparations to the rig have been completed, the convoy will set sail for Rotterdam to arrive around early October.

source: Offshore Shipping Online

Tags : towage, Fairmount, ENSCO

Dutch dredging company Royal Boskalis Westminster has awarded towage company Fairmount a contract to tow the trailing suction hopper dredger WD Fairway from China to Thailand, where the vessel will be repaired.

The dredger, which was holed amidships in a collision with the container vessel MSC Joanna in China, will be the maiden tow for Fairmount Expedition.

The vessels are currently en route and due to arrive in Thailand on or about August 13th.

source: Dredging News Online

Tags : Boskalis, Fairmount, towage, WD Fairway, Fairmount Expedition