Sea2Cradle: A balanced act

The maritime industry is seriously closing the gap. The effect on newly built ships is obvious; a trend towards design optimization for service speed instead of maximum speed, bigger box ships, more advanced waste heat recovery systems, ballast water treatment systems etc.

Topics that have long stood in the shadow of the glamorous new build ships are also the for the greater part solutions for existing ships. However for end-oflife vessels many ships owners have for economic reasons, chosen the easy way out. The vessel is sold to a cash buyer and ends up on one of the once pristine beaches in the Indian sub-continent. Nowadays there is an alternative with a better balance between Corporate Social Responsibility and financial considerations.

In the past 10 years the team behind the newly founded company Sea2Cradle, based in Rotterdam, has recycled over 60 ships in China. As pioneers their practices had to be developed from scratch and so they started with a search for a reliable partner who can supply the infrastructure and financial backing necessary to develop a systematic approach which can handle ships from as little as 50 to over 400 meters LOA. This partner was found in the ChangJiang Shipbreaking yard in JiangYin, China, 130 kilometres upstream the Yangtze River. And so it was in 2001 that the Nedlloyd Texas was the first ship to be sent to China to find out what the possibilities were to minimize environmental impact and maximize efficiency and safety, while still maintaining a fair profit for the ship owner. Under the wings of P&O Nedlloyd and later Maersk Line the Ship Recycling team became a full-grown, profitable business unit positioning themselves as a service provider that can recycle any ship for any owner.

Early 2011 it was decided after careful evaluation, that Maersk would go back to their core business and that the Ship Recycling team would be better off as a separate company. That was the reason why Sea2Cradle was established. So far the new company is of to a flying start, winning the bid to recycle 4 LNG carriers, 2 car carriers and several container vessels. Nevertheless it is too early to declare the independence a total success. The coming years will be very interesting as lots of challenges loom ahead. Yet I am confident his company has what it takes to overcome these challenges.

The future start here, even though it might take years for IMO’s Hong Kong Convention to come into force it has put ship recycling as a prominent item on the agenda’s of shipping companies. Some ship owners do not want to wait until they are forced to comply with the Convention and show a willingness to get ahead of the future regulations. It is these companies that are proud to take a slightly lower profit for a more responsible disposal of old tonnage that are finding a reliable partner in Sea2Cradle. The ship owners can still give the entire process out of hands, but they receive extensive documentation afterwards covering the entire process in order to proof that the recycling process was environmentally sound and safe.

One of the challenges that are inherent to ship recycling is that the industry is built on custom solutions. This means that no matter how experienced the team is, every vessel that comes in will need an extensive survey and a ship specific Ship Recycling Plan. For instance, on the LNG carriers currently being dismantled, 7000 cubic meters of balsa wood was used as insulation. The wood needs to be removed and stored out of reach of blowtorches to prevent one of the largest bonfires in history. It is this kind of challenges, among others, that keep things interesting because no matter how well you prepare the work there will always be small surprises. The small issues found on site make the work all the more challenging. It requires a lot of ‘thinking on your feet’ as for obvious economic reasons work cannot be stopped every time something out of the ordinary shows up. There is a very delicate balance to be maintained to make sure the ship is dealt with fast, yet without cutting any corners.

On the longer run it will be interesting what the growth of this so far niche market will bring. Today Sea2Cradle already sees some small time competition from shipping management companies. Nevertheless Sea2Cradle argues that they are years ahead of everybody else, based on their extensive experience. The years of pioneering and cooperation with the yard have built a certain momentum and a good relationship which is a solid basis for growth and further improvements.

But in no way Sea2Cradle has the opportunity to sit back and enjoy their head start. As the demand for responsible ship recycling is rising, the capacity has to grow as well and adding some geographical flexibility is welcome too. Therefore Sea2Cradle has launched a program to become acquainted with more ship breaking yards, assessing them and giving HSEtrainings for all personnel, from top management to yard workers. The interest is certainly there with several yards eager to invest in their equipment and adapting their working procedures to modern standards.

Another way forward currently under negotiation is to do research projects in conjunction with universities. Delft University of Technology for instance has a department specialized in Ship Production. As Ship Recycling is more or less the same process in reverse it would be interesting to see what new ideas they can bring to the table to further refine the process.

With all infrastructure and procedures in place, the service provider is still dependent on factors that are largely out of their hands. The price difference between China and the Indian subcontinent is based for a large part on the steel price, however far more factors play a role e.g. Investments in the facilities and the environment. An interesting contradiction is that the price difference is also influenced by activity on the beaches of teh India sub-continent. When the trading market collapsed in 2008 the beaches reached their maximum capacity and that pulled the prices for old tonnage down. This in turn minimized the premium for ship owners to divert to China to have their ships dismantled in a safe and environmentally sound manner. This is of course not the preferred way to meet new clients, but hopefully these clients will consider Sea2Cradle next time they are selling a vessel for recycling, regardless of availability.

With the situation on the bulker market in 2011 and the phasing out of single-hull tankers, based on IMO regulations, there is a huge potential for Sea2Cradle to attract new clients.

“We are eager to assist many Tanker owners and operators in their recycling activities” says Wouter Rozenveld, Operations Director at Sea2Cradle, as one of the major difficulties with any ship is to remove the fluids still aboard when approaching the recycling facility. Rozenveld recons that oils and other fluids are actually much more difficult to remove properly compared to obvious hazardous materials like Asbestos, although this is not recognized by the future legislation. By pumping all fluids into dedicated barges and subsequently doing a rigorous cleaning of all tanks Sea2Cradle can guarantee no fluids are released into the aquatic environment, which reduces environmental impact considerably.

Despite all best effort it all comes down to voluntarily implementation of the IMO Convention. Ship owners need to be willing to accept that slightly smaller fee for their old vessels. Sea2Cradle is established to assist and add value to the maritime green environmental policy.