Main Engine Damage Study - Swedish Club · Fire or explosion Grounding Heavy weather Machinery or equipment Other ... Main Engine Damage Study. Findings f Since 2004, the average

Main Engine Damage Study

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Check the findings at page 14

Read about cause of damage at page 13

2012

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C on t e n t s

Executive summary 4

Definitions 4

Introduction 5

Hull & Machinery claims 5

Machinery claims 7

Main engine claims 8

Observations on specific makes 9

Damaged parts 11

Cause of damage 13

Risks 13

Recurring issues 13

Limited experience 13

Prevention 14

Findings 14

Future analysis 14

Loss Prevention contact details 15

www.swedishclub.com 4


Findings f Since 2004, the average cost of a main engine damage

has risen by 52%, from USD 358,000 to USD 545,000.

f Medium speed engines still represent a disproportionately large share of main engine damage costs. Vessels with medium speed engines accounted for 17.5% of Club entry yet generated 30.2% of total main engine damage cost.

f Turbocharger damage remains the most common and expensive damage category across all engine types, accounting for 145 of the 370 main engine claims, at a cost of USD 49,800,000 or at an average cost of USD 344,000.

f Crankshaft failure is the most expensive damage to medium speed engines, with 12 failures at an average cost of USD 1,130,000.

f Inferior maintenance and/or repairs caused 52 casualties at an average cost of USD 576,000.

Cause of damage f Contaminated lubrication oil

f Not having experts attending major overhauls

f Using untested bunkers

f Separators not operated as per manufacturers’ instructions

f Engine components not overhauled as per manufacturers’ instructions

f Crew with insufficient experience/training

f Turbocharger damaged by foreign object

Recurring issues f Insufficient planning

f Insufficient experience/training

f Non-compliance with company procedures

f Unclear procedures, not comprehensive enough or have not been implemented


Executive summary Definitions f Vessels insured for Hull & Machinery (H&M)

2005-2011

f Total number of vessel/years: 10,749

f All vessel types and sizes

f Claims equal to, or more than, USD 10,000 on 100% basis considered

f Deductibles included

f All costs in US dollars adjusted to 2011 level

f Total number of H&M claims: 1,941

f Whereof number of Machinery claims: 982

f Whereof number of Main Engine claims: 370



In 2005, The Swedish Club presented the findings from a 6-year study of main engine damage (1998-2004). This report sets out the results of a follow-up study, spanning the 7-year period 2005-2011.

The objectives of this survey are to update the analysis published in 2005, identify new claims trends, review and reinforce the Club’s Main Engine Damage Loss Prevention Programme. The fundamental aim is to reduce the frequency/severity of main engine damage.

Introduction

Graph 1. H&M claims by number, 1998-2004

13%

12%

2%

12%

3%

51%

8%Collision

Contact

Fire or explosion

Grounding

Heavy weather

Machinery or equipment

Other

Graph 2. H&M claims by number, 2005-2011

The Club’s H&M claims in the 1998-2004 and 2005-2011 periods are shown in Graphs 1 and 2, respectively.

Seven claims categories are represented. It can be seen that in proportion the machinery claims have risen since 2004. Machinery claims accounted for 45% of H&M claims in the earlier study, increasing to 51% in this period.

Hull & Machinery claims

11%

14%

2%

11%

7%

45%

11%Collision

Contact

Fire or explosion

Grounding

Heavy weather


Other

For the purposes of comparison, the new investigation followed the same methodology adopted for the earlier survey. Only claims exceeding USD 10,000 or more (deductible included) were considered. It should be borne in mind, however, that the costs cited understate the true scale of the problem, as claims falling below the deductible tend not to be brought to the Club’s attention.

In cost terms the proportion of Machinery claims have also risen. In the 2004 analysis the cost of Machinery claims accounted for 32% of the total H&M claims costs. In the most recent analysis this proportion has risen to 36%.

The Swedish Club has always had a proactive policy, directed at raising awareness of main engine damage and encouraging manufacturers to respond with new and more effective measures for reducing the frequency of engine damage.

The Swedish Club provides members with a range of cover, including Protection and Indemnity (P&I), Freight Demurrage and Defence (FD&D), Marine & Energy and Ancillary covers and as of 1 September 2012, the Club had 1,041 vessels entered for P&I, 744 for FD&D and 1,484 for Hull and Machinery (H&M).

Overview



Across the seven H&M claims categories, The Swedish Club recorded 1,941 claims (0.18 claims per vessel and year) in the 2005-2011 period (Table 2), as opposed to 1,238 claims (0.21

20%

7%

4%

25%2%

36%

8%Collision

Contact

Fire or explosion

Grounding

Heavy weather


Other

Graph 3. H&M claims by cost, 1998-2004 Graph 4. H&M claims by cost, 2005-2011

Claims type Number Total cost (USD)

Avg. Cost (USD)

Collision 130 154,598,885 1,189,222

Contact 172 48,866,587 284,108

Fire/Explosion

24 43,978,136 1,832,422

Grounding 133 69,099,640 519,546

Heavy Weather

83 29,818,203 359,255

Machinery 558 179,968,394 322,524

Other* 138 48,811,676 353,708

Total 1,238 575,141,521 464,573

Table 1. H&M claims, 1998-2004, costs adjusted to 2011’s level


Avg. Cost (USD)

Collision 244 284,356,299 1,165,395

Contact 228 99,375,663 435,858

Fire/Explosion

34 55,100,398 1,620,600

Grounding 228 354,266,149 1,553,799

Heavy Weather

63 24,426,137 387,716

Machinery 982 509,265,911 519,363

Other* 162 107,800,102 665,433

Total 1941 1,434,590,659 739,099

Table 2. H&M claims, 2005-2011

*claims such as damage to hull, loss of anchor *claims such as damage to hull, loss of anchor

27%

8%

8%

12%5%

32%

8%Collision

Contact

Fire or explosion

Grounding

Heavy weather


Other

claims per vessel and year) in the 1998-2004 period. The average H&M claim cost is USD 739,000, as opposed to USD 464,000 for the years 1998-2004.



The average cost per machinery claim has risen from USD 323,000 to USD 519,000 over the past seven years. As in the previous survey, machinery claims are grouped into six categories (Tables 3 and 4). There were 982 machinery claims in the 2005-2011 period, costing USD 509,266,000.


Avg. Cost (USD)

Main engine 232 83,050,714 357,977

Steering gear

66 18,619,761 282,118

Aux. engine 120 32,457,705 270,481

Boilers 65 21,598,508 332,285

Propulsion 63 21,194,140 336,415

Other* 12 3,047,566 253,964

Total 558 179,968,394 322,524

Table 3. Machinery claims, 1998-2004, costs adjusted to 2011’s level


Avg. Cost (USD)

Main engine 370 201,536,086 544,692

Steering gear

55 36,319,922 660,362

Aux. engine 185 72,167,047 390,092

Boilers 59 21,028,882 356,422

Propulsion 174 132,587,850 761,999

Other* 139 45,626,125 328,246

Total 982 509,265,911 518,601

*machinery such as electrical equipment, cranes, cargo gear, deck equipment

*machinery such as electrical equipment, cranes, cargo gear, deck equipment

Graph 5. Hull & Machinery claims and trends, 1988-2011

Table 4. Machinery claims, 2005-2011

Club entry (No.)

H&M Claims (No.)

Frequency

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Club entry (No.)

H&M Claims (No.)

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Machinery claimsMain engine damage remains by far the most expensive category, contributing 39.6 % of total machinery claims cost (46.0 % in the earlier study) and 14.0 % (14.4 %) of total H&M claims cost. During the relevant period the Club's deductible level has increased by 3% per year.

Graph 5 shows that the frequency of Hull & Machinery claims (claims number/Club entry) is approximately 0,2 claims per vessel and year over the past 10 years.



Graph 6 is an overview of the main engine claims trend over a 23-year period. The trend line has broad similarities to that shown in Graph 5 (for all H&M claims) and shows the trend has stabilized to almost 0.04 claims per vessel and year.

Graph 6. Main engine claims and trends, 1988-2011

As mentioned above, this trend is reflected in the main engine damage statistics, with the average cost rising 52%, to USD 545,000 from USD 358,000 (1998-2004).

Main engine damage claims involved, on average, 3.4% of all vessels entered for Hull & Machinery with The Swedish Club for the period 2005-2011. The total cost of main engine damage between 1988-2004 was almost USD 180,000,000, adjusted to 2011’s level. The latest survey records 370 main engine claims costing USD 201,500,000.

The fact remains that medium speed engines continue to be over-represented in the claims statistics. Graph 7 shows that, while 17.5% of entered vessels had medium speed engines, these vessels accounted for 30.2% of engine damage costs. The corresponding statistics for the earlier study are 19.5% and 48.1%, respectively.

Graph 7 shows that the proportion of entered vessels with The Swedish Club with low speed engines has increased somewhat, whilst repair costs have risen significantly. This rise in costs can possibly be attributed to the boom years in shipping, when repair capacity and spare parts availability were scarce.

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Club entry (No.)

ME Claims (No.)

Frequency

Club entry (No.)

ME Claims (No.)

Frequency

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Main engine claims



Graph 7. Percentage of Club entry and damage cost by engine type

y

Low speed’98−’04

Mediumspeed ’98−’04

Low Speed’05−’11

MediumSpeed ’05−’11

0%

10%

20%

30%

40%

50%

60%

70%

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90%

Club entry

Claims cost

Graphs 8 and 9 show claim distribution by cost and entry for specific main engine manufactures. The identity of the eight specific makes surveyed is protected by the codes LS1-LS4 and MS1-MS4. The abbreviation LS is low speed and MS medium speed engines. The identity of these makes is available to Club members upon request.

LS1 LS2 LS3 LS4 MS1 MS2 MS3 MS4

0%

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Club entry (%) Claims cost (%)

LS1 LS2 LS3 MS1 MS2 MS3 MS4

0%

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Club entry (%) Claims cost (%)

Graph 8. Percentage of Club entry and damage cost by engine make, 1998-2004

Graph 9. Percentage of Club entry and damage cost by engine make, 2005-2011

The surveys for 1998-2004 and 2005-2011 show a similar picture, with the important exceptions of LS1 and LS3. These experienced an increase in claims cost.

Observations on specific makes



Graph 10 shows that claims costs (year/vessel) for vessels with medium speed engines are twice as high as for ships with low speed engines.

Graph 10. Average cost for main engine related damages per year and vessel by engine type (USD)

Low speed Medium speed

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1998−2004

2005−2011

Graph 11. Average cost per claim for medium speed main engines with Inline or V configuration

Graph 11 shows the average damage costs of medium speed engines of Inline or V configurations. The V configuration engines have approximately twice the average cost. The claim frequency of these engine configurations remains approximately the same.

Inline V

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000



Tables 5 and 6 focus on the eight most common damaged parts in the main engine claims category. In terms of numbers and total cost, turbocharger damage remains the most common and costly engine component, accounting for 145 of the 370 claims and almost USD 50,000,000 of the USD 201,500,000 total cost. 114 of the 145 turbocharger claims involved low speed engines.

In terms of average cost, crankshaft failures produced the most expensive claims, USD 1,447,000 per damage. This is a significant increase to the USD 722,000 average cost in the period 1998-2004.

Table 5. The eight most common types of claims (all engines) 1998-2004Damaged parts

Number Total cost (USD)

Avg. Cost (USD)

Turbocharger 84(36.1%)

20,223,640(24.4%)

240,758

Crankshaft 23(9.9%)

16,611,275(20.0%)

722,229

Cylinder liner 17(7.3%)

5,082,020(6.1%)

298,942

Entablature 17(7.3%)

4,174,652(5.0%)

245,568

Bearing 15(6.5%)

7,922,643(9.5%)

528,176

Fuel pump 12(5.2%)

3,765,173(4.5%)

313,764

Camshaft 10(4.3%)

4,530,190(5.5%)

453,019

Piston 9(3.9%)

3,217,997(3.9%)

357,555

Table 6. The eight most common types of claims (all engines) 2005-2011

Damaged parts

Number Total cost(USD)

Avg. Cost(USD)

Turbocharger 145 (39.1%)

49,821,354 (24.7%)

343,596

Multiple parts 65 (17.6%)

44,517,518 (22.1%)

684,885

Cylinder liner 35 (10.3%)

19,389,949 (9.6%)

553,998

Bearing 17 (4.6%)

13,508,476 (6.7%)

794,616

Crank shaft 16 (4.3%)

23,154,607 (11.5%)

1,447,163

Piston 11 (3.0%)

4,823,366 (2.4%)

438,488

Entablature 8 (2.2%)

7,242,901 (3.6%)

905,363

Crosshead 7 (1.9%)

5,931,974 (2.9%)

847,425

Damaged partsTables 7 and 8 show the five most common claims for low speed and tables 9 and 10 show the five most common for medium speed engines. Turbocharger damage remains the most common and expensive damage for low speed engines. Crankshaft damage is the most expensive medium speed engine damage category. There were 12 such claims in 2005-2011, with an average cost of USD 1,130,000.

Our definition of multiple parts is damage where various engine parts are involved. For example a claim involving off-spec bunkers causing damage to fuel system components, cylinder liners, pistons and turbochargers.



Table 7. The five most common types of claims (low speed engines), 1998-2004

Damaged parts


Avg. Cost (USD)


16,738,911 (40.7%)

265,697

Entablature 17 (11.5%)

4,174,652 (10.2%)

245,568


4,537,317 (11.0%)

302,488

Bearing 9 (6.1%)

3,472,564 (8.4%)

385,840

Piston 7 (4.7%)

1,916,671 (4.7%)

273,810

Table 8. The five most common types of claims (low speed engines), 2005-2011

Damaged parts


Avg. cost (USD)

Turbocharger 114(42.9%)

43,224,263(30.7%)

379,160

Multiple parts 40(15.0%)

28,928,107(20.6%)

723,203

Cylinder liner 28(10.5%)

11,660,199(8.3%)

416,436

Bearing 14(5.3%)

13,188,984(9.4%)

942,070

Camshaft 12(4.5%)

7,866,634(5.6%)

655,553

Table 9. The five most common types of claims (medium speed engines), 1998-2004

Damaged parts


Avg. cost (USD)


3,484,729 (8.9%)

165,939

Crankshaft 21 (25.6%)

16,187,464 (41.5%)

770,832

Camshaft 8 (9.8%)

4,110,406 (10.5%)

513,801

Bearing 6 (7.3%)

4,450,079 (11.4%)

741,680

Fuel pump 5 (6.1%)

911,469 (2.3%)

182,294

Table 10. The five most common types of claims (medium speed engines), 2005-2011

Damaged parts


Avg. cost (USD)


6,597,091 (10.9%)

212,809

Multiple parts 25 (24.0%)

15,589,411 (25.7%)

623,576

Crankshaft 12 (11.5%)

13,557,133 (22.3%)

1,129,761


7,729,750 (12.7%)

1,104.250

Piston 5 (4.8%)

2,109,023 (3.5%)

421,805



Cause of damage f Contaminated lubrication oil


f Using untested bunkers

f Separators not operated as per manufacturers’ instructions

f Engine components not overhauled as per manufacturers’ instructions

f Crew with insufficient experience/training

f Turbocharger damaged by foreign object

Table 11. Top 5 causes of damage, by number

Cause No ofclaims

Avg. cost (USD)

Inferior maintenance and/or repairs

52 575,879

Lubrication failure 33 977,331

Foreign object 28 349,949

Off spec bunker 27 364,529

Latent defect 25 494,646

Inferior maintenance and/or repair are by far the most frequent cause of damage. We have noticed numerous cases where damage occurs shortly after the engines have been overhauled by ship or shore staff. This emphasises the importance of having experts in attendance during major overhauls.

RisksBefore a critical job is started the risks have to be identified. If they are not identified it could lead to very expensive machinery failures or even loss of life.

In numerous cases there were risk assessments in place but a failure in fully assessing the areas of concern. The reason for this might be that the crew did not recognise the benefit of following correct procedures. This means that the company has not been able to establish a safety culture onboard and explaining the importance and benefits of approved procedures.

Recurring issues f Insufficient planning

f Insufficient experience/training

f Non-compliance with company procedures

f Unclear procedures, not comprehensive enough or have not been implemented


Limited experienceIt is a well-known fact that there will be a shortage of experienced seafarers in the near future. This has been highlighted before in our publications but it is worth repeating again. There is a risk that officers are being promoted before they have acquired the necessary experience for senior command.

To ensure that seafarers have the required knowledge it is essential that they receive proper training. This should be clearly defined in the SMS (Safety Management System) of what is required of them.

It is further imperative that the maintenance of all engine components is included in the PMS (Planned maintenance system).



Prevention f Implement Onboard Fuel Management and fuel system

audits. During these audits, the various parts (including separators) of the fuel treatment plant should be checked for proper function.

f It is imperative to monitor the quality of the lubrication oil. Samples of lubrication oils should be sent ashore for analysis at least every three months.

f During major overhauls it is highly recommended to have an expert in attendance.

f To ensure a long service life for the boiler it is important to implement a correct boiler water treatment.

f To prolong the service life of the economiser it is very important to keep the economisers clean. This will increase the service life and minimise the risk of soot fires.

f Invest in employee training.

f Carry out comprehensive audits and inspections.

Fuel managementAn in-depth investigation of multiple machinery claims shows that a lot of engine damage is caused by off-spec bunker. It is likely that this was avoidable or could have been minimised if proper Onboard Fuel Management had been implemented and followed at all times.

Effective Onboard Fuel Management will significantly reduce the risk of engine break-down and lengthy/costly repairs. The components included in the fuel oil system are: bunker tanks, settling tanks, service tanks, various pumps, heaters, filters and separators.

Unfortunately there are still some owners/operators who do introduce untested fuel into their machinery to see how it works, which can lead to catastrophic consequences.

During normal operation and over time, sediment including cat fines will accumulate at the bottom of the settling and service tanks. In heavy weather, the accumulated sediment could dislodge and clog filters, heaters and separators. In addition, dislodged cat fines could very quickly cause abnormal abrasive wear to various engine components. Over the years we have seen numerous “cat fine-related” damage to main engines resulting in towage and very costly and lengthy repairs.

It is therefore essential that settling and service tanks are drained completely and manually cleaned at regular intervals.

FindingsThe primary finding is that medium speed engines still account for a disproportionate number of machinery damage claims. Furthermore, the average cost of main engine claims (on a per year/vessel basis) is twice as high for medium speed engines, compared to low speed engines.

f Since 2004, the average cost of a main engine damage has risen by 52%, from USD 358,000 to USD 545,000.

f Medium speed engines still represent a disproportionately large share of main engine damage costs. Vessels with medium speed engines accounted for 17.5% of Club entry yet generated 30.2% of total main engine damage cost. In comparison with a low speed engine, a medium speed engine has more moving parts and operates at a much higher rpm. As a consequence, the medium speed engine is more susceptible to breakdowns.

f Turbocharger damage remains the most common and expensive damage category across all engine types, accounting for 145 of the 370 main engine claims, at a cost of USD 49,800,000 or at an average cost of USD 344,000.

f Crankshaft failure is the most expensive damage to medium speed engines, with 12 failures at an average cost of USD 1,130,000.

f Inferior maintenance and/or repairs caused 52 casualties at an average cost of USD 576,000.

Future analysisThe Club will closely monitor and compare the performance of conventional two stroke engines with electronically controlled engines. When sufficient statistical data is available, the Club will release an update to this report.

Furthermore we will monitor the effects/claims of slow steaming practices, which are adopted in the shipping industry today.

The Club will continue to share engine damage information with members and draw the attention of manufacturers to the survey results. Upon request, Club members will have full and exclusive access to the comprehensive data relating to leading engine makes and models.

www.swedishclub.com


Loss Prevention

Anders HultmanLoss Prevention, Project Co-ordinator

Tel +46 31 638 426E-mail [email protected]

Joakim EnströmLoss Prevention Officer


The Loss Prevention unit is placed within Risk & Operations and provides active loss prevention support, analysis, reports as well as advice to members.

Lars A. MalmDirector, Risk & Operations


www.swedishclub.com

Head Office GothenburgVisiting address: Gullbergs Strandgata 6, 411 04 GothenburgPostal address: P.O. Box 171, SE-401 22 Gothenburg, SwedenTel: +46 31 638 400, Fax: +46 31 156 711E-mail: [email protected]

Emergency: +46 31 151 328

Piraeus5th Floor, 87 Akti Miaouli, GR-185 38 Piraeus, GreeceTel: +30 211 120 8400, Fax: +30 210 452 5957E-mail: [email protected]

Emergency: +30 6944 530 856

Hong KongSuite 6306, Central Plaza, 18 Harbour Road, Wanchai, Hong KongTel: +852 2598 6238, Fax: +852 2845 9203E-mail: [email protected]

Emergency: +852 2598 6464

Tokyo2-14, 3 Chome, Oshima, Kawasaki-Ku, Kawasaki, Kanagawa 210-0834, JapanTel: +81 44 222 0082, Fax: +81 44 222 0145E-mail: [email protected]

Emergency: +81 44 222 0082

OsloTjuvholmen Allé 3, House of Business, 6th Floor, N-0252 Oslo, NorwayTel: +47 9828 1822/9828 0514E-mail: [email protected]

Emergency: +46 31 151 328

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Main Engine Damage Study - Swedish Club · Fire or explosion Grounding Heavy weather Machinery or equipment Other ... Main Engine Damage Study. Findings f Since 2004, the average