INTERTANKO

1 INTERTANKO
7
The International Association of Independent Tanker Owners
INTERTANKO - Global forum for chemical tanker owners
June 2003
For safe transport, cleaner seas and free competition
2 INTERTANKO
Chemical tankers increasing market share
In addition to representing 70% of the world’s independent oil tanker fleet, INTERTANKO also represents
over 576 chemical tankers. Chemical tankers account for close to 30% of the tankers registered in
INTERTANKO. This makes INTERTANKO the world’s largest association representing independent oil and
chemical tanker owners.
According to Drewry, the world tanker chemical fleet is estimated to have grown by 1.2% in 2002, not as
strongly as in previous years due to increased levels of recycling. The chemical tanker fleet has shown net
growth every year since 1994. During 2002, 78 chemical tankers of 1.6 million dwt were ordered, which was
significantly higher than in previous years. The total orderbook stands at 155 tankers of 3.3 million dwt
representing close to 14% of the fleet. 66% of these orders are expected to be delivered in 2003.
Traditionally there have been low levels of recycling of chemical tankers, but lately recycling has been
increasing due to the advancing age profile of the fleet. 17 chemical tankers of 0.35 million dwt were sold for
recycling during 2002.
Chemicals are involved in everything from agriculture to complex manufacturing - providing the world with
such things as pharmaceuticals, detergents, insecticides and fertilizers, synthetic fibres and rubbers, and
packaging materials. The increasing demand for these chemical products throughout the world has led to
the development of sophisticated ships capable of carrying a wide range of specialty cargoes in bulk, often
in smaller quantities or ‘parcels’. While some chemical tankers are specifically constructed to carry less
sophisticated chemicals, such as methanol, the term parcel tankers usually refers to the more complex
parcel/chemical tankers.
Chemical tankers primarily transport organic and inorganic chemicals as well as vegetable oils and fats. The
total global volume of chemicals is estimated at approximately 60 million metric tonnes per year. In addition,
the transportation of vegetable oils, alcohols, molasses and lubricating oils amounts to 40 - 45 million tonnes
per year.
Chemical tanker fleet by segment
Number of tankers.
477, 41%
309, 26%
113, 10%
276, 23%
5,000-9,999 dwt
10,000-19,999 dwt
20,000-29,999 dwt
30,000 dwt +
Source: INTERTANKO / LR/Fairplay
3 INTERTANKO
Chemical tankers are complex and technologically advanced
The transportation of chemicals is technically and logistically different from the transportation of oil and oil
products. Chemical tankers are more advanced in many ways. The cargoes may be hazardous and noxious
chemicals or such products as edible oils and fats. A common characteristic of these cargoes is that they
tend to be high value and require sophisticated handling for safety, health and loss prevention reasons. The
ships are complex and technologically advanced due to the degree of subdivision created by 50+ cargo
tanks. They are inherently more robust vessels compared to bulk tankers. This large number of cargo tanks,
sophisticated cargo operating systems and supply of deck services enable them to carry a broad range of
chemicals, in accordance with the requirements of the International Code for the Construction and
Equipment of Ships Carrying Dangerous Cargoes in Bulk (IBC/BCH Code), and in strict accordance with
anti-pollution regulations under MARPOL Annex II.
Every chemical cargo carried requires careful consideration during the planning process and loading. Some
are temperature sensitive some are semi-gases, some need to be inhibited, and some are sensitive to water.
Checks also need to be made regarding the chemical ship type, (for instance category I, lI or III), tank coating
compatibility, cross compatibility with other cargoes carried, environmental controls if required (inerting). In
addition, tank construction type for containment, venting requirements, gauging equipment, vapour detection,
compatible fire protection medium, heating requirements, inhibition requirements, density limitations of the
product in relation to the cargo tank, and pumping requirements are important considerations. Most of this
information is set out in the IBC or BCH Code. In addition, the vessels also need to take into account the
information contained in safety data sheets, applicable load-line zones encountered during the voyage,
changes in sea/harbour water densities, bunker quantities and disposition, the loading sequence of each
grade, final quantities/ullages, charterers’ options on cargo lift requirements, segregation requirements,
valve line-up and the line-up and sequence of concurrent ballast operations.
Chemical tanker fleet by hull type
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
5,000-9,999
dwt
10,000-
19,999 dwt
20,000-
29,999 dwt
30,000 dwt
+
N/A
Single hull
Double side
Double bottom
Double hull
Source:
INTERTANKO
LR/Fairplay
ARINE & Chemical Graph
4 INTERTANKO
INTERTANKO Chemical Tanker Committees
Historically INTERTANKO has represented its members’ chemical tanker interests through an open forum
within INTERTANKO called the Chemical Tanker Owners’ Advisory Group (CTOAG).
Over the last few years the number of chemical tankers within INTERTANKO’s membership has been
steadily increasing. To ensure that INTERTANKO provides optimal support and representation for its
chemical tanker owners, it was decided to reconsider the current methods of work within INTERTANKO.
Accordingly, the CTOAG reviewed its terms of reference. As a result the CTOAG was elevated from an open
forum to the full status of a committee within INTERTANKO. This new committee is called the Chemical
Tanker Committee (CTC) and meets twice a year rotating between Europe and the Far East.
To ensure that the Americas are fully represented, INTERTANKO inaugurated the Chemical Tanker
Sub-Committee – Americas (CTSCA) in April 2003. This Sub-committee of the CTC aims to support the
work of the CTC whilst handling specific regional issues that arise from both North and South America.
Both the CTC and CTSCA provide a forum for INTERTANKO to promote the activities and priorities
nationally, regionally and internationally, and report to the INTERTANKO Council.
The appointment of Captain Howard Snaith as Marine and Chemical Director and the recent appointment of
Margaret Doyle as Chemical Manager have strengthened our presence in this area.
How does INTERTANKO represent members’ interests?
INTERTANKO through its Chemical Tanker Committee (CTC) and Chemical Tanker Subcommittee –
Americas (CTSCA) monitors the regulatory issues affecting this sector. The aim is to further the interests of
independent chemical tanker owners and ensure that chemical tanker owner' interests are best reflected in
the chemical industry’s day-to-day trading activities and market developments.
INTERTANKO also has NGO status at IMO and participates in all the IMO meetings, including Bulk Liquid
Gases Subcommittee (BLG), Marine Environmental Pollution Committee (MEPC), Evaluation of Safety
Pollution Hazards Working Group (ESPH), the Marine Safety Committee (MSC), and associated
sub-committees. INTERTANKO logged 3,500 man-hours representing its members at IMO during 2002.
INTERTANKO is also represented in Washington and Europe, and maintains close contacts with the US
Coast Guard Chemical Tanker Advisory Committee. In addition we have a close working relationship with
FOSFA (The Federation of Oil Seeds and Fats Association).
5 INTERTANKO
How does INTERTANKO support that function?
Through an effective team of experts in the relevant fields ranging from marine biologists, master mariners,
maritime lawyers, naval architects, brokers, statisticians, political scientists, and charterparty experts and
administrative support. These are supplemented by a team of political consultants in Brussels and
legislative representation in Washington DC. INTERTANKO has two principal offices in Oslo and London as
well as regional offices in Singapore and Washington DC.
What are the main chemical issues?
INTERTANKO is active on a number of fronts and the principal issues are summarised in the following
pages.
MARPOL Annex II Revisions
This is currently the main issue under consideration, which relates to the re-categorisation of the existing
pollution categories within MARPOL Annex II. Currently there exist 5 categories A, B, C, D and an Appendix
III. (Appendix III lists products to which the IBC Code does not apply). However, due to the re-evaluation
process of the existing MARPOL Annex II products by GESAMP/GHS, existing products will be
re-categorised into a new 5-category system also called A, B, C, D and Appendix III, based upon their
re-evaluation. It is easy to see that confusion could arise between the old 5-category system and the new
5-category system.
INTERTANKO believes that a new 3-category system will be a lot simpler for industry, and also a lot simpler
to implement by Port State Control. It is therefore prudent to reduce the number of categories from 5 to 3. It is
proposed that such a new 3-category system would be called X, Y, Z. Importantly, under this new system
there would be no Appendix III. INTERTANKO strongly believes that all MARPOL Annex II products should
be regulated with regard to tank washing procedures and slop disposal. The chemical tanker industry,
strongly supported and represented by INTERTANKO (who is lobbying flag states, PSC and the vegetable
oil producing nations on the issue), supports this concept for a new 3-tier pollution categorisation system, as
this will assist in protecting the environment. Such regulations would include stricter controls regarding
vegetable oil tank washings. Some would consider it therefore surprising that the chemical tanker industry is
experiencing a degree of opposition to this concept from some flag states. INTERTANKO strongly supports
the view that all products within MARPOL Annex II should be regulated and controlled in order to better
protect the marine environment.
New stripping limitations for new buildings
INTERTANKO has also carried out a stripping capability survey of its member’s chemical tankers. Based
6 INTERTANKO
upon this study INTERTANKO made recommendations to IMO that under the current revisions of MARPOL
Annex II, stripping requirements should be reduced by 50% for new chemical tankers from 150 litres to 75
litres. INTERTANKO continues to promote this proposal at IMO as an important environmental measure.
Chemical tanker vetting
Both oil and chemical tankers alike are subject to vetting inspections. The oil companies operate through the
OCIMF SIRE system, and the chemical tankers through the Chemical Distribution Institute (CDI).
INTERTANKO actively supports the use of both these recognised industry inspection systems in order to
reduce the number of multiple inspections.
Chemical Distribution Institute (CDI)
INTERTANKO is fortunate that its technical expertise meets strict criteria by CDI, such that INTERTANKO is
represented at the CDI Technical Committee, CDI Executive Board Meetings, CDI Inspection Accreditation
Committee, and the CDI Quality Audit Committee.
Howard
Use of CDI reports by Port State Control
INTERTANKO supports the CDI concept as a positive step towards reducing the number of commercial
vetting inspections and promotes recognition of the CDI scheme by PSC authorities to assist in reducing
inspections and better targeting sub-standard vessels.
High Interest Vessel Boarding
Following 11 September 2001, the US Coast Guard was tasked with ensuring the safety and security of the
US Marine Transportation System. Immediately after the attacks INTERTANKO staff worked closely with the
US Coast Guard and Captain of the Port representatives in the development of a risk assessment system to
efficiently control movement of ‘high interest’ traffic in the ports and waterways. The focus on high risk
vessels such as tankers carrying gas, oil and chemicals resulted in the US Coast Guard High Interest
Vessels Boarding Program currently in use. The High Interest Vessels Boarding Program and the current
matrix being used was developed using industry information provided by INTERTANKO
US Coast Guard Chemical Transportation Advisory Committee (CTAC)
INTERTANKO continues to participate in the CTAC meetings at present dealing with:
• Correlation between the ISPS and all three NVICs (port facility and vessel)
• Discussion of the training needs relative to the US PREP programme
• Development of a training competency matrix for CSO and SSO
• A discussion of communication and security publications
• A discussion of scenarios involving ‘worst case’ and hazardous cargoes
7 INTERTANKO
Chemical tankers trading routes
The major chemical trade routes end in Asia, India, the Middle East and South America from the US and
Europe. There is a considerable bilateral trade between the US and Europe. Seagoing transport from the
Arabian Gulf to destinations both in the east and in the west is increasing as new production capacity is being
developed in this area. The industry has also seen a large production increase in the Far East with a
considerable share of this volume going to overseas markets.
Chemical Trade Patterns - Deep Sea
(Courtesy of Odfjell Tankers)
According to the Drewry, chemical tanker supply is set for rapid growth in 2003 with 109 ships of 1.9 million
dwt expecting to be delivered. As the clean products market is strong at the moment this has led to increased
earnings in the chemical markets. The change in the rates for the chemical
tankers has not been of the same magnitude as for the CPP market. Drewry considers that this is related to
the so-called "swing" ships (chemical/oil tankers) not having a significant impact on the freight market.
Demand for chemical tanker tonnage should continue to grow this year as the positive indicators from the
recovering chemicals industry help boost trade.
Organic chemical seaborne trade rose 6.5% in 2002. This increase was underpinned by a 19% increase in
Chinese organic imports. Drewry estimates the Chinese organic imports for 2002 at 9.9 million tons, with
China replacing the US as the leading importer for the first time. Strengthening exports for the US (+20% -
8 INTERTANKO
emerging from a prolonged downturn) as well as Japan (+12%) also contributed to the expansion and helped
offset decreased imports for the US (-11%) and Japan (-5%).
Revised forecasts for the inorganic seaborne movements point to a 2% increase in 2002. Again China is
estimated to be the leading importer with almost 2 million tons imported, replacing the US. Contributing to the
increase in seaborne trade were exports from the US (+20%) and Japan (+12%). Both countries saw
decreased imports with the US (-26%) and Japan (-6%).
Chemical seaborne trade
Source: Drewry
0
10
20
30
40
50
60
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Million tonnes
Organics
Inorganics
Veg/Animal Oil & Fats
9 INTERTANKO
INTERTANKO in summary
INTERTANKO has been the voice of independent tanker owners since 1970, ensuring that the oil, products
and chemicals keep the world economy turning is shipped safely, responsibly and competitively.
Membership is open to independent tanker owners and operators of oil and chemical tankers, i.e. non-oil
companies and non-state controlled tanker owners, who fulfil the Association's membership
criteria. Independent owners operate some 80% of the world's tanker fleet and the vast majority are
INTERTANKO members. As of June 2003, the organisation has 242 members, whose combined fleet
comprises more than 2,160 tankers totalling 160 million dwt, which is 70% of the world's independent tanker
fleet above 10,000 dwt. INTERTANKO's associate membership stands at 273 companies with an interest in
shipping of oil and chemicals.
INTERTANKO is a forum where the industry meets, policies are discussed and statements are created. It is
a valuable source of first-hand information, opinions and guidance. INTERTANKO has a vision of a
professional, efficient and respected industry, that is dedicated to achieving safe transport, cleaner seas and
free competition.
Marine and Chemical Department INTERTANKO contacts:
London Office
Captain Howard Snaith – Marine and Chemical Director
Tel: +44 20 7623 9685 howard.snaith@intertanko.com
Washington Office
Margaret Doyle – Chemical Manager
Tel: +1 508 460-6143 : margaret.doyle@intertanko.com
London Office
Adele Garnett – Assistant
Tel: +44 20 7623 4311 adele.garnett@intertanko.com
10 INTERTANKO
and non-state controlled tanker owners, who
fulfil the Association's membership
criteria. Independent owners operate some
80% of the world's tanker fleet and the vast
majority are INTERTANKO members. As of
May 2003, the organisation has 242 members,
whose combined fleet comprises more than
2,160 tankers totalling 160 million