Insurance deal makes tug-barge option attractive

Company News - August 25, 2000

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Like most sectors of the heavy lift market, the tug-barge sector has enjoyed mixed fortunes of late, although there is reason to expect that things will improve in the medium terms say operators such as Fairmount, Anchor Marine and ITC.

Albert De Heere, General Manager at Fairmount says tug-barge transportation has always been a very flexible and cost effective way of transporting a diverse range of cargo.

De Heere says that although the sector has been handicapped by a somewhat undeserved reputation for being a more hazardous option than self propelled heavy lift, the best companies, those that have a good safety record, can now find brokers who understand the market and are willing to provide insurance at realistic rates.

Fairmount's safety record is a very good one, says De Heere, and dry transport by tug-barge enjoys a very good safety record.

Cargo damage is very rare, says Fairmount's General Manager, in spite of what Fairmount says is an on-going campaign in the self-propelled sector of the market to make underwriters nervous about the idea of insuring tug-barge transports.

Fairmount now has preferential access to Cargo and Liability Insurance Programmes for tug-barge transportation under the BIMCO standard HeavyCon contract at a highly competitive rate, with First Class security. The insurance provides coverage up to a limit of $50 million on an 'all risks' worldwide basis.

De Heere says the cargo premium under the programme is just 0.14 per cent of the sum insured, inclusive of London basic Wars and Strikes. The liability premium is just $3,850 per vessel voyage for a maximum limit of $50 million, subject to terms and conditions. With this kind of insurance available, says De Heere, the idea that cargo insurance for self-propelled is cheaper is no longer true.

In fact, says Fairmount, the premium is lower than most offered for self-propelled heavy lift vessels, and, as the typical cost for a tug-barge transport is 30 per cent lower than self propelled, considerable savings can accrue from using tug-barge transportation.

Although the oil and gas market remains fairly slow, transports for cargoes such as dredging equipment for the booming international dredging industry are providing much needed turnover.

Fairmount markets the Fukada barges Ocean Orc and Ocean Seal, and says they are fully booked during 2000 on charter to offshore operator Heerema and Dutch dredging contractor Van Oord ACZ. The Chinese barges Fairmount markets are also in demand, says deHeere.

Alastair Mack of Anchor Marine says that although the depressed oil price had an adverse affect on drilling activity and the number of oil and gas developments worldwide, barges have continued to perform a large number of transports.

Mack agrees that in the past the cost of insuring cargo has acted against the tug-barge combination, but the excellent record of a number of recognised operators has resulted in a significant reappraisal of risks by underwriters and insurance rates whichare competitive with those of heavy lift ships.

Mack says that, increasingly, offshore equipment is being fabricated in areas that are some distance from their final location, and claims the use of cargo barges designed for long haul transportation provides and effective and economic means of delivering cargo expeditiously and safely.

Anchor Marine has a close working relationship with ITC in the Netherlands, a relationship which Mack and ITC's Managing Director Hans de Nieuwe agree has been beneficial to both.

Mack and De Nieuwe emphasise the versatility and flexibility of the tug-barge combination for the movement of larger, heavier items, cargoes for which they feel the tub-barge remains competitive with the dedicated heavy lift ship, and say the in-built flexibility of barges enable them to reach loading and discharging points that may be off limits to heavy lift ships.

Anchor Marine and ITC combine resources on a regular basis to provide a turnkey transportation service, a relationship, which has seen increased utilisation of the fleets of both companies. Together, utilising Anchor Marine's large submersible barges AMTTrader, AMT Transporter, and AMT Carrier, the two companies have carried out a number of long haul transports.

Last year, Anchor Marine and ITC undertook a series of transports of drill barges, lift boats and materials barges from Port Arthur, Texas, to Lake Maracaibo in Venezuela on behalf of subsidiary of Schlumberger.

The large deck area of the AMT Trader gave Schlumberger the flexibility to change the delivery schedule at short notice in order to meet changing requirements on Lake Maracaibo.

Having completed three transports to Lake Maracaibo, the AMT Trader then proceeded to Baltimore to float on a full load of dredging equipment for Port Said, Egypt. After Port Said, the barge returned to the North Sea to prepare for the loading of the Thebaud topsides for the Sable Island Energy Project off the east coast of Canada, a development being undertaken by the Sable Alliance.

The Thebaud module weighed 6,500t and was loaded at Kvaerner's Port Clarence yard on Teeside. Two of ITC's tugs, the Solano and Simoon, were used for the tow to Canada, and speeds of in excess of 10kt were easily achieved says Mack and De Nieuwe.

After completing the trans-Atlantic transportation job, the AMT Trader in tow of the Suhaili loaded four LPG tanks in Rotterdam for delivery to Mombassa in Kenya. Currently, Anchor Marine has the AMT Trade in tow of the Solano on passage to the CantarellField offshore Mexico, transporting two accommodation modules fabricated on Teeside.

Anchor Marine's smaller barges continue to be involved in transporting a wide range of cargoes, one recent example being the Tenacious, the Jubilee Sailing Trust's new barque. After transporting the 65m square rigged sailing vessel to Southampton, UK, the AMT Wayfarer proceeded to Appledore to load sections of new piers being installed in the River Thames.

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