INTRODUCTION
1.1
Background of the Study
In the maritime industry, the acquisition of
a vessel represents a significant investment, requiring careful consideration
of multiple factors to ensure the vessel’s operational efficiency and safety.
One of the most critical assessments in the decision-making process is the
evaluation of the vessel’s seaworthiness, which is vital for its safe and
economic operation. This evaluation is often conducted through a condition
survey, a thorough inspection that provides potential buyers with a detailed
understanding of the vessel’s physical state and operational capabilities.
According to Wikipedia (2024),
condition surveys are essential tools used to assess the overall state of a
vessel before its purchase. These surveys covers a wide range of areas, from
structural integrity to mechanical systems to safety equipment and compliance
with international regulations. By examining the various aspects of the ship’s
condition, surveyors are able to identify existing or potential defects that
could compromise the vessel’s performance or lead to future financial burdens.
The findings from a condition survey are crucial in determining whether a
vessel is fit for continued service or requires repairs, and ultimately,
whether it is worth the investment.
In a highly regulated industry where
safety is paramount, the importance of condition surveys extends beyond just
financial considerations. The seaworthiness of a vessel is not only measure of
its ability to safety navigate and perform its intended functions but also a
perquisite for regulatory compliance. A vessel found lacking in its
seaworthiness due to poor condition or mechanical failure may face significant
penalties, operational restrictions, or even grounding. Thus, condition surveys
provides both a technical and legal basis for ensuring that vessels meet the
rigorous demands of maritime operation and remain compliant with international
standards (Nabil 2005)
This research explores the role of
condition surveys in determining the seaworthiness of vessels before purchase.
It examines how these surveys contribute to informed decision making, mitigate
financial risks, and ensure that vessels are both operationally sound and legally
compliant. This seminar draws on case analyses and expert interviews to
highlight the practical significance of condition surveys in maritime commerce,
particularly in the context of ship acquisitions. By understanding the impact
of these surveys, stakeholders can make better-informed decisions, ensuring the
safety and longevity of their investments in the global industry.
As
a matter of facts, development of rules and regulations in the shipping field
was and is driven by lessons learned from accidents and events. Several marine
casualties occurred in the last decades and a few of them may be partially
attributed to aging effects. Moreover, the Goal Based Standards (GBS) recently
developed by IMO and still under discussion (IMO, 2006), call for more and more
stringent and accurate inspection and maintenance procedures, carried out
according to well detailed instructions in order to provide reliable
information for the subsequent steps of condition assessments. The recently
issued IACS Common Structural Rules (CSR), both the ones for tankers and the
ones for bulk carriers, even if focused on shipbuilding rather than ships in
service, dedicate a whole chapter and several other sections to ship in
operation, to inspection practice, to repair and renewal criteria, etc., thus acknowledging
that inspection practices need to be accounted for in the design phases when
establishing limit states and acceptance criteria (Rizzo 2007).
Then,
it seemed interesting to analyze marine casualties aiming to understand if the
actual inspection regime of ships may be improved and if it is effective for
the intended goals. The current inspection practice is the result of decades of
experience and efforts of a number of stakeholders such as ship owners, class
societies, shipyards, insurers, flag states, ports & terminals, cargo
owners and charterers. Actual schedules and scope of surveys have been defined
over the years as a compromise among safety requirements, operational demands and
maintenance issues. Nowadays, a systematic risk-based approach has not yet been
adopted for defining surveys schedules, scope, extent and relevant acceptance
criteria for ships, like in the offshore field. Past experience well addressed this
matter: for instance the 5 years’ time window between special surveys has been
proved a cost-effective compromise between inspection and maintenance purposes
and commercial ones by some reliability analyses (Garbatov
and Guedes 2001), (Ivanov
2004), (Paik et al., 2003) however, it is worth noting that such type of
estimates for ongoing ship need to be handled with care because of the large
uncertainties involved in the calculations and in the definition of input variables
(Rizzo & Angelo, 2008).
A
ship is a complex instrument with potentially hidden defects, some of which are
undiscoverable by reasonable care. The maintenance, repair and inspection of the
ship are delegated to experts and registered surveyors and are largely carried
out while the ship is in port or dry-dock. Yet in the modern world the
ship-owner is blamed if his ship is found to be unseaworthy, whether in fact or
law. Since bills of lading, charter parties or marine insurance policies refer
to seaworthiness and do not particularise further, this perpetually creates a
tug-of-war between the ship-owner and the shipper. All this leads us to the
question of what constitutes seaworthiness at the present day and how both the
shipper and the ship-owner can be protected in a complex commercial world.
Ship
as marine transportation has life time on the hull, construction and equipment
which is equipped in the ship caused by vessel operations, environmental
impacts and accidents. Therefore, to optimize the condition of the ship
periodical or regular checking process called ship condition survey is
required. The survey is conducted to determine the actual condition of the
ship, the cost to meet the standards, future planned maintenance costs during
the selected period, as well as relevant recommendations. Once the data is
obtained, the owner will conduct a feasibility study in the decision to do
repairs or maintenance.
This
survey process conducted by Owner Surveyor or related institutions. The survey
process needs experienced Owner Surveyor and have adequate knowledge. This
condition survey results will be reported in the form of a report that will
take a longer time.
1.2 Aim/ Objectives of the Study
The aim of the study is to determine the
impact of condition surveys in determining the seaworthiness of vessel before
purchase. The specific objectives of the study includes;
1.
To investigate how condition surveys are used
in determining a vessel’s seaworthiness.
2.
To examine the relationship between condition
survey results and the post-purchase performance of vessels
1.3
Research Questions
The specific objectives of the study includes
the following
1.
How do condition surveys helps in determining
the seaworthiness of a vessel before purchase?
2.
How do the results of condition surveys
influence the operational performance, safety, and maintenance requirements of
vessels post-purchase?
1.4
Research Hypothesis
Based on the objectives and research
questions above, the following research hypothesis were formulated:
H1:
Condition surveys significantly influence the determination of a vessel’s
seaworthiness by identifying key structural, mechanical, and operational
deficiencies that affects its ability to operate safely.
H2: There is
a positive correlation between favourable condition survey results and improved
post-purchase performance of vessels in terms of operational efficiency,
safety, and reduced maintenance cost.
1.5
Significance of the Study
The significance of this study lies in the
contribution of maritime industry’s understanding of the critical role
condition surveys play in vessel acquisition and operational safety. By exploring
the impact of these surveys on assessing seaworthiness, this research provides
valuable insight for ship owners, operators, investors, and maritime
regulators. The findings of the study can enhance decision-making processes,
enabling professionals to make informed choices regarding vessel purchase, thus
minimizing the financial risk and ensuring compliance with international safety
standards.
Additionally, the study underscores
the importance of comprehensive condition assessments in maintaining fleet
reliability and operational efficiency. For maritime insurers, this research
offers a basis for understanding the risks associated with insuring the vessels
of varying conditions, allowing for more accurate premium calculations.
Overall, this research will strengthen the industry’s capacity for risk
management, safety assurance, and long-term asset value preservation through
the effective use of condition surveys.
2.0 REVIEW
OF RELATED LITERATURES
Rizzo and
Angelo (2008) carried out a study titled “A Review of Ship Surveys Practices and of Marine Casualties Partly Due to
Aging Effects” the study focused on the present international regulatory
regime and the future expected developments of ship surveys, from the viewpoint
of methods and criteria, identifying different degradation phenomena mainly related
to aging of structures and hull equipment. The current onboard practice is recalled,
both of mandatory surveys (including class surveys and particularly the new
requirements introduced by the IACS Common Structural Rules) and of non-mandatory
industry-driven inspections. Then, reviews of few databases of marine casualties,
available to authors, are presented aiming at assessing the role of aging effects
in the marine accidents. Even if it should be admitted that available
statistical samples are not always complete and accurate, the intent is to
identify trends in the pattern of structural failures and to develop
recommendations for improving the inspection regimes and procedures for
condition assessment analyses by which to reduce the number and severity of
such occurrences.
The
work of Wang et al., (2009) “Condition
Assessment of Aged Ships and Offshore Structures” pointed out the Design
and operational measures that have been in place to mitigate the impact of age
related degradations. The focus of the design and shipbuilding stage is placed
on reducing the likelihood of aging effects while considering production cost
(Lee et al 2004). These measures include: explicitly implementing
corrosion additions to structural design, improving fatigue detail designs,
applying coatings and installing anodes to corrosion-prone areas (Hansen et
al 2004), and using wear-resistant steel or anti-corrosion steel in some
cases (Satoshi et al 2005). Once the ship is delivered, the focus is
switched towards the following: inspection and maintenance, timely and adequate
repairs, crew training, imposing limits to cargo loading/unloading procedures
with an aim to minimize unfavorable impacts on structures (e.g., Brooking et
al 2004). Options for mitigating the mechanical damages to bulk carriers
include using less invasive cargo-handling grabs and proper operation of cargo handling
equipment.
According
to Christopher in a report titled “Seaworthiness-Condition
Surveys” Condition surveys also have an interesting impact upon
underwriters' defence of unseaworthiness under section 39(5) Marine Insurance
Act which provides that there is no implied warranty that the ship shall be
seaworthy, but where, with the privity of the assured,
the ship is sent to sea in an unseaworthy state, the insurer is not liable for
any loss attributable to unseaworthiness. It is essential that a casualty be
attributable to the unseaworthiness of the vessel, which must have arisen with
the privity of the assured. Will insurers be able to
run such a defence if, as a result of the condition survey, they are taken to
know as much about the unseaworthy condition of the ship as the owner? Although
the defence strictly speaking only requires privity
on the part of the owner irrespective of the insurers' knowledge, it is
difficult to envisage circumstances where insurers will have sufficient
specific knowledge of a vessel's unseaworthiness prior to a particular casualty
such that they in effect waive a defence (rather than a breach of warranty) in
advance. The defence should therefore remain in theory. However, in practice,
the insurers' knowledge derived from the condition survey will be in evidence
and will inevitably have an impact and will be a yardstick in assessing the
precise state of the owners' knowledge.
The
proliferation of condition surveys, resulting in lists of defects and reports
being handed to masters, reports being forwarded to owners, and conditions or recommendations
being imposed by the Salvage Association and P & I Clubs, all of which are
documented, will provide a fertile body of evidence into which insurers can dig
to prove the owners' knowledge of a vessel's unseaworthiness.
In
an article by Mustafa (2021) on legal
assessment of seaworthiness in autonomous cargo ships postulated that nowadays,
the exponential growth in technological advances in the shipping industry
appears to justify the proposition of that autonomous merchant ships and
traditional ones are on the eve of an era in which they will start sailing
together in the seas. Since it is expected that the autonomous ships shall
enhance economic, ecological and social sustainability, so that they ensure
safe and environmentally friendly operations, whether or not the existing international
conventions could pose a hurdle to the autonomous ships in the sense of
seaworthiness is becoming more and more the focal point of the discussions. In his
paper, a comprehensive illustration of the concept of seaworthiness
particularly in the light of case law was first submitted, and following that,
the concept of autonomous ship will be enunciated as well as a discussion of whether
it could be considered as a ship. Considering these, his paper seek an answer
to the question of whether, or how, the autonomous ships could fulfil the
requirement of properly manning laid down in Article III (1-b) of the
Hague/Hague-Visby Rules. It is followed by a comparative analysis of how the
carrier’s duty to provide a seaworthy ship could be aligned with autonomous
shipping in the scope of the Hague/Hague-Visby Rules, the Hamburg Rules and the
Rotterdam Rules.
He
went further to discuss the concept of seaworthiness. The concept of
seaworthiness contains several aspects and is not rigid at all (Eder 2015). As
mentioned above, the term of seaworthiness has a broad and comprehensive
meaning and thus cannot be limited to only physical condition of the ship with
regards to hull, machinery, stores and equipment. It is also related to crew in
the sense of competency and sufficiency, and the essential documents for the
voyage as well as cargo worthiness. It can therefore be submitted that the
standard of seaworthiness contains a twofold aspect; on the one hand the ship
must be properly equipped, manned and supplied with vital documents (known as
vessel seaworthiness), on the other hand the ship must be cargo worthy as
meaning that she is provided to be in a vigorous condition to receive the
contractual cargo (known as cargo worthiness (Eder 2015).
Nabil (2005) Seaworthiness in the context of the ISPS Code
and the relevant Amendments to SOLAS Convention, 1974. The dissertation
considers the impact of the emerging security regime enshrined in the ISPS Code
and the relevant amendments to SOLAS Convention, 1974 on the doctrine of
seaworthiness. The momentary aspect of seaworthiness is reflected in case law,
through the position taken by the courts when dealing with claims involving
allegations of unseaworthiness and lack of due diligence. While relevance of the ISM Code to the
assessment of seaworthiness of a ship is demonstrated, the undertaking of
seaworthiness upon the company as defined in the ISPS Code is analyzed with
respect to security requirements. As there has yet to be any ISPS Code related
cases, the absolute obligation of seaworthiness according to the English law,
is dealt with through a hypothetical scenario.
The concept of due diligence within the security regime is
discussed with reference to the development of the Ship Security Plan (SSP).
The relevance of the port facility to the equation of seaworthiness is also
considered. Other issues considered are the limitation of liability and the
relevance of soft law to seaworthiness.
As the breach of the undertaking of seaworthiness may lead to loss
of cover, the implications of the security regime are discussed. Pending
harmonization of the law in marine insurance law, reference is made
respectively to Marine Insurance Act 1906 and to the continental Norwegian
Marine Insurance Plan 1996. A few recommendations are made to assist companies
in fulfilling their undertaking of seaworthiness.
According
to Federico (2017), “The seaworthiness: an old warranty for a new
duty” the seaworthiness of the vessel is a crucial pivot through which
the activity of shipping runs and covering the different fields and areas of
maritime law. The purpose of this paper is to trace a logical path in order to
examine the content that the term seaworthiness of the vessel carries with it,
developing an analysis of those areas in which this concept exerts its effects.
In particular, the article regards the effects of seaworthiness duty on charter-party,
marine insurance as well as the implications that pertain to marine pollution.
Finally, the paper deals with a “new issue”. Technological progress is
affecting shipping, involving seaworthiness and it’s inextricably links to the
vessel’s exercise. To this end, cyber risk is an aspect that sea transport is
compelled to keep in high regard by virtue of the almost total informatization of communications and maritime operations
in which the role of the crew seems more and more limited to supervisory tasks.
The connection between seaworthiness and cyber risk needs to interpret in a
broader sense the concept of seaworthiness itself because a fault of this duty
may arise within shipping company and then move about vessel causing delays,
business disruption, and contractual claims. These considerations may then
provide an approach that makes an old warranty for new duty.
Numerous
empirical studies including that of Rizzo and Angelo (2008), Wang et al.,
(2009), Christopher, Mustafa (2021), Nabil (2005), Federico (2017), have explored the concepts
of seaworthiness from various perspectives, particularly focusing on the
factors that influences a vessel’s ability to operate safely and efficiently.
This studies have identified critical elements and sub-elements, such as
structural integrity, mechanical reliability, and compliance with regulatory
standards, all of which play a role in determining seaworthiness. While these
works provide valuable insights, there is a notable gap in literature when it
comes to the specific relationship between condition surveys and seaworthiness,
particularly in the context of vessel purchase decisions.
Most
significantly, no existing research has clearly established the direct link
between condition surveys and the determination of seaworthiness prior to the
acquisition of vessels within Nigeria. This gap is especially given the
challenges and regulatory environment in the Nigerian maritime sector. The lack
of focused research on how condition surveys contribute to assessing a vessel’s
fitness for purpose in this region leaves critical questions unanswered,
particularly as the Nigerian maritime industry continues to expand and evolve.
In
the light of the increasing demands of the global maritime industry and the
specific operational conditions in Nigeria, understanding the role of condition
surveys in determining seaworthiness before purchase becomes even more crucial.
These surveys not only inform purchase decisions but also contribute to broader
safety, operational efficiency, and regulatory compliance in an industry that
requires rigorous adherence to international standards. Addressing this gap
would provide essential knowledge to maritime stakeholders in Nigeria, offering
them a clearer framework for evaluating vessels and ensuring the sustainability
and competitiveness of their operations in both local and international markets
3.0 RESEARCH METHODOLOGY
3.1 Research Design
The
research will adopt a mixed-method approach, combining both qualitative and
quantitative methods to achieve a comprehensive understanding of the impact of
condition surveys on vessel seaworthiness. The research will utilize a
Descriptive-Correlational Research Design. The descriptive aspect of the study
will focus on understanding the process of condition surveys, their scope, and
the types of inspections conducted (e.g., hull, machinery, safety equipment).
It will describe how these surveys are conducted, the components they assess,
and the standards benchmarks for seaworthiness, while the correlational aspect
will examine the relationship between the findings from condition surveys and
the actual outcomes of vessel purchases.
3.2 Population of the Study
The
population of the study consists of the about 86 persons from the different
categories, ranging from the Marine surveyors from NIMASA, NPA, and NIWA, Ship
buyers and owners in Onne seaport and other ports,
Maritime regulatory officials overseeing vessel certifications.
3.3 Sample and Sampling Techniques
For the
purpose of conducting the survey, the study adopted a purposive random sampling
technique in which the respondents were purposively sampled randomly. The
reason for the purposive random sampling was because NIMASA, NPA, and NIWA,
Ship buyers and owners in Onne seaport and other
ports, Maritime regulatory officials overseeing vessel certifications, were the
ones that are most often directly involved in conducting conditional survey
before purchase.
n = 
-----------------------------------------------------------------------------------------------------1
Where ：
n= sample size required
N = number of people in the population
e = allowable error (%) = 0.05
n = 70 Respondents
The sample size consists of 70 respondents in the different
respective fields, which comprises of 30 marine surveyors (from regulatory
agencies and private firms), 20 vessel owners or buyers who purchased ships in
the sales and purchase market following condition surveys, 10 regulatory
personnel or industry experts.
3.4
Method of Data Analysis
The study
was designed to assess Impact of Condition Surveys in determining the
Seaworthiness of Vessel before purchase. The study used a mixed design method
comprised of the use of primary data from survey and secondary data (Archival
data) obtained from past condition survey will be used to analyze the
correlation between survey’s outcomes and post-purchase vessel performance. A
questionnaire was used as survey instruments to gather primary data from marine surveyors (from regulatory agencies and private
firms), vessel owners or buyers who purchased ships in the sales and purchase
market following condition surveys, regulatory personnel or industry experts.
Descriptive Statistics (Mean, Standard Deviation) will be used to summarize
survey findings, also a correlational analysis will be employed to test the
relationship between survey outcomes and vessel performance, and T-test was
used to identify significant association between different variables such as
vessel age, survey results, and purchase decisions.
Correlation
Analytical Tool
In statistics, dependence refers to
statistical relationships between two random variables or a set of data,
correlation therefore refers to any of the broad class of statistical
relationships involving dependence. Correlation is a statistical technique used
to measure the strength or degree of relationship existing between two
variables. When only two variables are involved, we speak of simple
correlation. The researcher therefore employed correlations in this study to
examine the impact of each of the independent variables on each other as well
as on the dependent variable. There are several types of correlation
coefficients. These are Pearson Product Moment Correlation Coefficient, Rank
Correlation Coefficient and Kendall Correlation Coefficient.
Pearson Product Moment Correlation
Coefficient denoted by ‘r’ was used. The ‘r’ is computed as
- ------------- 2
Where rxy
= Product moment coefficient
Y = Dependent variable
X = Independent variable
N = No of response (5)
The ‘r’ assumes any value on the scale from
-1 to 1 inclusive. If r =
1, there
is a perfect relationship between the two variables and if r = 0, there is
absolutely no relationship between the two variables.
Supposing there is a strong positive
linear relationship between the variables, the value of r will be close to +1.
On the other hand, if there is a strong negative linear relationship between
the variables, the value of r will be close to -1. In the case where there is
no linear relationship between the variables or only a weak relationship exists
between the variables, the value of r will be close to 0.
4.0
RESULT AND DISCUSSION OF FINDINGS
Table
4.0: Influence of Condition Survey on Seaworthiness
|
Condition Survey (X)
|
Post-Purchase Performance (Y)
|
|
35
|
5
|
|
15
|
4
|
|
10
|
3
|
|
5
|
2
|
|
5
|
1
|
Testing of Hypotheses
Hypothesis testing enable the researcher to
draw up objective and definite inferences based on the result of the tests
carried out. For the sake of this research, the Pearson correlation analytical
tool will be judiciously used to determine the variety of the formulated
hypotheses. The response of the respondent are based on strongly agreed,
agreed, undecided, disagree and strongly disagree and the will be represented
as 5, 4, 3, 2, and 1 respectively. This will enable the researcher analyze the
data collected.
Ø r is the correlation coefficient
(0.889001 in this case).
Ø n is the number of data points (5
in this case).
Ø The degrees of freedom (df) is n-2
Testing
for the Hypothesis 1
Therefore, T calculated = 20
Decision
rule: Accept
H1: If T Calculated > T Table
Reject H0: If T
Calculated < T Table
Conclusion: Since calculated T > T tabulated,
that is 20 > 1.156, the null hypothesis H0 is rejected and the alternative
hypothesis H1 is accepted. This implies that condition surveys significantly
influence the determination of a vessel’s seaworthiness by identifying key
structural, mechanical, and operational deficiencies that affects its ability
to operate safely.
Testing
Hypothesis 2.
Therefore, T calculated = 22
Decision
rule: Accept
H1: If T Calculated > T Table
Reject H0: If T
Calculated < T Table
Conclusion: Since calculated T > T tabulated,
that is 22 > 1.476, the null hypothesis H0 is rejected and the alternative
hypothesis H1 is accepted. This implies that there is a positive correlation
between favourable condition survey results and improved post-purchase
performance of vessels in terms of operational efficiency, safety, and reduced
maintenance cost.
5.1 SUMMARY
OF FINDING/ CONCLUSION
This study investigated the impact of the condition survey on determining the sea-worthiness of
a vessel before purchase, a critical factor in
maritime operations. The analysis revealed a strong and positive correlation,
with correlation coefficients ranging between 0.88 and
0.90. These values
indicate that a vessel’s condition survey is a highly reliable predictor of its
sea-worthiness. The strength of this relationship suggests that the more
favorable a vessel's condition survey score, the greater its likelihood of
being sea-worthy, a crucial consideration for stakeholders in making informed
purchasing decisions.
The t-test
further confirmed the significance of this correlation, with the computed
t-statistic exceeding the critical value, leading to the rejection of the null
hypothesis. This statistical validation affirms that the condition survey plays
an essential role in accurately assessing sea-worthiness, minimizing the risk
of acquiring vessels that may not meet operational standards.
In
conclusion, the condition survey emerges as a vital tool in the decision-making
process for vessel purchases. The strong correlation between condition survey
results and sea-worthiness highlights its importance not only as a diagnostic
measure but also as a financial safeguard, ensuring that purchasers invest in
vessels that are structurally sound and fit for service. These findings
underscore the necessity of thorough condition assessments to enhance safety,
operational efficiency, and economic outcomes in the maritime industry.
5.2 Recommendations
Based on
the findings from this study, the following recommendations are proposed to
enhance the use of condition surveys in determining the sea-worthiness of
vessels before purchase:
Ø Given the
strong correlation between condition surveys and sea-worthiness, it is
recommended that condition surveys be made a mandatory requirement before any
vessel purchase. This would help buyers make more informed decisions and
mitigate the risk of acquiring vessels that do not meet operational standards.
Ø To ensure
consistency and reliability across the maritime industry, there should be a push
towards the standardization of condition survey protocols. This would reduce
variability in assessment criteria and ensure that the results are uniformly
applicable in evaluating sea-worthiness.
Ø Modern
technology such as hull scanning, ultrasonic testing, and digital inspection
tools should be integrated into condition surveys to provide more accurate and
detailed insights into a vessel’s structural integrity and operational
capabilities, enhancing the precision of sea-worthiness assessments.
Ø
Vessels should undergo periodic
follow-up condition surveys after purchase to ensure sustained sea-worthiness
throughout their operational lifespan. This would help identify potential wear
and tear or issues that may not have been apparent during the initial survey,
thereby enhancing long-term operational safety.
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