DISPATCHES

SPECIAL REPORT

hurdle or opportunity?
he impact vetting has on out-charter business is not always recognised in the strategic operational and commercial management of tankers. Some fleet managers take the view that the vetting process is outside their control and when a tanker is rejected, often throw their hands up and 'blame' the unfathomable 'whims' of the vetting organisation concerned. This is a mistake stemming from a lack of understanding of the objectives of the vetting function; the processes being used and the actions that can be taken to positively influence a vetting review. While it may be understandable that fleet operators dislike or feel threatened by vetting 'assessments' (or in their view 'criticisms'), they can, with management understanding and action, use the vetting data to improve their business. The days when tanker 'vetting' consisted of an ex-seafarer reviewing a ship inspection report and making a vetting decision are fast disappearing. Charterers vetting departments use a wide range of data and, in some cases, use sophisticated computerised data analysis systems to evaluate potential third party risk to their business. While a fleet man-

By Tim Knowles

assessments will start by looking at the total fleet management and may not, in general, be broken down by individual owners, under the rationale that the ship manager's safety management system should be consistently applied on all of the ships, regardless of who the principal is. To understand how fleet managers can use vetting to their advantage, they must first understand the importance of vetting to the charterer and, secondly, perceive vetting as a potential business improvement opportunity and not simply as a hurdle to be jumped. Oil Majors carry out vetting primarily to protect their people and assets; exercise and demonstrate due diligence in their business dealings; and to provide necessary paper trails in the event of an accident or serious casualty. By directing their business to quality operators, they can also minimise their transportation risk. Investment by the charterers in terms of manpower, expertise, computer systems and management of the vetting process is considerable. Apart from utilising OCIMF's Tanker Management and Self Assessment (TMSA) system as well as port state control detention records and ship inspection reports, they increasingly use sophisticated

The primary objective of the charterers vetting function is to accurately assess, through their vetting process, the quality of the operator and the vessel being offered or, put another way, the risk to their own business of using a third party ship
ager has an opportunity to improve the interface with the charterers vetting department, this raises a number of questions such as: have tanker fleet managers kept pace with the vetting changes; are they managing the process to achieve a good vetting outcome or are they paying insufficient attention and suffering the business consequences? The answer is that not all fleet managers have kept pace with vetting requirements so consequently some are failing to adequately manage their part in the vetting process. The outcome may be an adverse impact on their out-charter business because their tanker may not be accepted by the charterer or terminal operator. The primary objective of the charterers vetting function is to accurately assess, through their vetting process, the quality of the operator and the vessel being offered or, put another way, the risk to their own business of using a third party ship. Historically, individual ships were vetted and were either accepted or rejected. It is increasingly the case that where a fleet operation falls short of a predetermined standard, the entire tanker fleet will not be eligible for longer-term charter business. In the case of shipmanagement companies, there is the possibility that the assessment of the managed fleet can be adversely impacted if the ships of one owner perform to a lower standard than the rest of the fleet. This is because some vetting

scientific data analysis systems to handle the myriad of data gathered. These systems do not dispense with the need to use marine expertise but can achieve rapid and consistent analysis by breaking down the vetting process into discreet components, including the quality of the operator; quality of the ship; and the nature of the voyage. Analysis of these components provides an overall voyage risk assessment that leads to a vetting decision. A major driver is to enable consistent analysis of every evaluation (oil majors may carry 80,000 plus such evaluations a year), to record every detail and enable its retrieval in the event of an incident. The vetting activity put in place by the tanker fleet operators should respond to, and dovetail with, the vetting activity of the charterers. But does it? It would be unreasonable to expect fleet operators and managers, especially the smaller companies, to employ the numbers of people or have the sophisticated systems used in oil major vetting departments. However, the actions taken should be commensurate with their business needs.

20

SHIP MANAGEMENT INTERNATIONAL

ISSUE 8 JULY/AUGUST 2007

SPECIAL REPORT

DISPATCHES

In my experience, fleet managers sometimes fail to recognise the growing importance to their business of effectively managing the vetting interface. Many operators do not put in place the investment (in terms of manpower, training, equipment and computer data analyses of vetting key performance indictors) to meet their business needs. As a consequence misunderstanding and confusion arises. For example, many tanker operators employ a technically competent 'vetting superintendent' to manage the vetting interface with the charterers vetting departments. This may be a standalone role or part of the role of the DPA or Safety Officer. The task typically includes arranging tanker inspections (often the major part of their work), meetings with oil major vetting departments, taking the lead in vetting audits and providing post-incident information to the charterer. Their reporting line and interdepartmental communications should ideally ensure good working relationships with the fleet operations group and also the chartering department. These usually hard working and technically-competent people often suffer from a lack of management support, lack of understanding of the vetting process and see the task as mainly responding to oil major post ship inspection deficiency questions. They are ill-prepared or trained to manage their interface role with the vetting organisations, especially when it comes to representing their company at difficult meetings with charterers vetting managers. It is not unusual for them to approach the charterers vetting people as 'fellow mariners' rather than customers representatives and as a result are not adequately prepared for the management systems related questions that are often raised. Tanker fleet managers should therefore ensure that the management structure needed to interface with the charters' vetting organisations is consistent with the business objectives of the company and that the vet-

ting process is reviewed and understood by fleet management. The vetting interface role should also have a clear and comprehensive job description that takes account of all the activities involved in the process including the 'customer interface' activity. And the person responsible for the vetting interface should focus on activities for which they are qualified and not be over burdened with administration work such as arranging inspections. It is essential that those involved in vetting are trained accordingly. This should involve process and system training as well as training for meetings and interpersonal skills. The vetting interface function should be supported with data, system access and equipment so evaluation of the fleet performance is at least equal to that carried out by the charterers' vetting department. Meetings with charterers' vetting people should only be carried out when necessary, with properly prepared personnel armed with the data pertinent to the meeting objectives and data that accurately represents the performance of the fleet. Data should not consist of information that the charterer has from other sources such as the fleet list, unless requested. Also, international databases that contain information on the fleet and feed into the charterers computerised systems should contain accurate data and it is important that post incident interface communications and data are heavily managed. And last but not least, the charterer's vetting department should be treated as a customer and be supplied with the service and data they demand.
Tim Knowles was Manager of third Party Tanker Q/A in the Marine Services division of International Marine Transportation and was responsible for managing the global processes of third Party Tanker Screening for those tankers considered for ExxonMobil affiliate use. He now advises tanker owners, managers and operators on vetting issues. timknowles82@btinternet.com