In today’s economic climate, many shipping companies, including ship chartering companies, are having to re-evaluate their business strategies. For some, this means selling their ships entirely, but many others choose to lay-up their vessels until the time comes when they’re economical to use again.
A ship lay-up might sound simple, but it’s actually a somewhat complex process, plus the work needed to take a ship out of lay-up can be equally as confusing. So, how exactly do you go about a ship lay-up? And what do you need to do to get a laid-up ship back into service again? You’ll find out the answers to these questions, as well as much more, when you read what we’ve got to say below.
What is a Ship Lay-Up?
Let’s first look at the ship lay-up meaning. A ship lay-up is when a vessel is temporarily placed out of service, usually moored or anchored in a location, although dry-docking can also be used when looking to lay-up ships for a considerable period of time.
More important than what ship lay-ups are is why they happen in the first place, and as with most things in business, it all comes down to money. Running a ship is a costly enterprise, and in certain financial circumstances, it doesn’t make business sense to keep a ship running. In this situation, a ship lay-up is often the best solution.
A hot lay-up will remove around a quarter of the cost of running a ship, while a cold lay-up can save the owners up to 60% in costs. This can be the difference between the ship being viable or needing to be sold.
Types of Ship Lay-Up
As already touched on, there are two main types of ship lay-ups – hot and cold. These both see the vessel taken out of service for a while, but differ in how comprehensively the ship is taken out of service.
Hot lay-up of ships is when ships are laid up for a shorter period – typically they’ll be out of action for 1-12 months. During this time, the crew level will be drastically reduced, but there will be some crew members onboard to carry out necessary maintenance. The aim with a hot lay-up is to take the ship out of service, but also ensure that the ship can be activated again quickly.
Cold lay-ups of ships happen when a ship is almost entirely deactivated, usually for a period of longer than a year. Almost all systems are turned off and any electricity required comes from shore or from a generator. A bare minimum crew stays onboard to deal with things such as flooding and fire, although some companies choose to hire a specialist lay-up crew to man their ship while it’s in cold lay-up. Ships in cold lay-up generally take a considerable amount of time to be reactivated.
A warm lay-up is something between a hot and a cold lay-up. It sees crewing reduced and maintenance also reduced, but not to the same level as a cold lay-up.
How to Lay-Up a Vessel
Laying up a vessel isn’t simply a case of turning up in a port and dropping anchor. Instead, there’s a huge amount of work needed before a ship can be laid-up. We’ve gone through some of the main considerations to keep in mind when laying-up a vessel below.
Location is vital when choosing where to lay-up a vessel. The ideal lay-up location will have a number of features, with the first being that it should be away from high levels of traffic. You should also look for a location that is well sheltered, as well as one away from strong swells and currents.
It’s also incredibly important to consider the weather when looking for a ship lay-up, as it’s vital to ensure the vessel is laid-up away from any seriously inclement weather, such as tropical storms. The area should also be safe from human threats, such as piracy, and away from areas at risk of armed conflict.
You should also consider the sea itself, and more specifically its depth – water levels need to be high enough to ensure the ship is clear of the seabed at low tide, while not being deeper than the length of the anchor chain. Along with the anchor, the vessel should also be tethered to suitable bollards, which have sufficient strength and the kind of spacing needed to ensure the lines each have even tension.
Finally, you need to evaluate how well-prepared the location is to deal with emergencies. What will the response be like if a fire is reported onboard? Can crew be accessed easily in the event of a medical emergency? Is there help nearby, such as tugboats for hire, if you need ocean towage services to move the vessel suddenly? You should do a full risk assessment on every potential location, considering every conceivable scenario.
Lay-up costs are exceptionally important to consider – after all, the whole reason to lay-up ships is so that the company can save money. The cost of laying-up a vessel isn’t something that can be generalised, as there are so many factors that affect the cost, from the size of the ship to the crewing requirements, and everything in between.
As already mentioned, cold lay-ups can save around 60% of costs, while hot lay-ups can save around 25%. It is possible to reduce this amount further by laying up two or more ships in the same location, as the same crew can often be used to man each vessel, plus lay-up locations might offer discounts for additional vessels.
Formal Lay-Up Notification
Before a ship is laid-up, the owners must inform the flag administration and classification society, plus the local authority covering the ship’s proposed lay-up location should also be told of plans. All these organisations might impose specific requirements to make sure the entire lay-up is conducted in a safe and proper manner.
It is also exceptionally important to ensure that the ship remains in class during the entire lay-up, as this will make sure the P&I insurance is valid. Insurance will also be invalid if any statutory requirements are breached.
One of the primary ways in which shipping companies save money during a ship lay-up is by reducing the number of crew. In order to decide how many crew members are required during a lay-up, a thorough risk assessment should be conducted.
Skilled personnel will usually be required to remain on the vessel, to ensure the vessel remains well-maintained and operational. However, ships that are moored in groups can often use the same crew, saving on money considerably.
Before making a final decision on how many crew members to leave on a laid-up ship, you should consult both the ship’s flag state and local authorities, to see if they have any requirements.
As you might imagine, there are several factors that need to be considered and protected against when laying-up a ship. Here are just a few of the precautions that must be taken.
- Safe access must always be maintained, meaning that there must be a safe way for crew members and other personnel to get on and off the ship. This access should be always well-lit.
- All accommodation should have measures in place to ensure suitable humidity and temperature, to protect staff. Areas containing critical equipment should also remain at the correct humidity and temperature.
- It’s vital that all fire alarms remain operational throughout the lay-up period. If there’s no permanent crew, there should be a remote notification system in place to warn of fire. All firefighting equipment should also remain in perfect working order.
- Some local authorities will require certain vessels to be certified as gas free, plus the vessels in question must remain gas free throughout the time the ship is laid-up.
- There should be measures put in place to make sure the hull is protected against corrosion and biofouling. There are many anti-fouling coatings available – a ship owner can contact their coating provider to determine the best option for their specific vessel.
- The working environment should remain safe throughout the ship’s lay-up. If an outside crew is hired to man the ship, they should be fully aware of all safety standards and requirements.
- Logs should be kept throughout a ship lay-up, which record all measures taken during the time. This will be needed during the reactivation phase.
- All sea overboard valves should be closed if they are not in use. Any coolers and condensers left open should have their seawater connections blanked off. Water levels should be checked often, and bilge alarm systems should be operational. Remote alarm systems should be installed if the ship is not manned.
Of course, there are also many other things to consider with a ship lay-up. This is why preparing for a ship lay-up is an exceptionally important job, as well as a particularly time-consuming one.
How to Reactivate a Ship After a Lay-Up Period
At some point, a ship will need to be reactivated, and this isn’t a simple process either. However, if the ship lay-up has been conducted in the proper way, the reactivation will be that much simpler and faster.
Lay-up logs are absolutely vital and must be maintained throughout the time the ship is laid-up. Without proper logs of all significant activity, there will be no way to prove certain actions and precautions have been taken. All actions concerning preservation and maintenance aboard the vessel should be recorded scrupulously.
Planning of Reactivation
Ideally, the same core team that was present for the start of the ship lay-up will also be present during reactivation. If this isn’t possible, it’s prudent to ensure the most experienced and knowledgeable officers are present. Those in attendance should include the chief officer, electrician, electronics technician, and second engineer.
Prior to the lay-up, a list of spares should have been composed, and this list should now be reviewed and equipment used during the lay-up considered.
It’s also important to ensure that all gas detectors are properly calibrated and that they’re in date and serviced. Speaking of gas, tankers will usually need to have a new gas free certificate issued when the reactivation team joins.
Crewing logistics should also be planned in detail before reactivation begins. Not only should the appropriate crew be arranged, but their accommodation should also be confirmed before they arrive. All items that will be required by the crew, including potable water, should also be organised prior to the reactivation commencing.
It’s also exceptionally important to consult the Classification Society to determine the work required to get the vessel back into trade without any unnecessary Class Recommendations or Conditions of Class. New regulations should also be checked carefully to determine whether new equipment or other features are required. The Class surveyor should attend as early in the reactivation stage as possible, so there’s ample time to address any issues they highlight.
Fuel and Lubricating Oil Systems
Issues with fuel and lubricating oil systems during the reactivation can lead to significant delays. Therefore, regular checks on the fuel and lubricating oil systems should be carried out throughout the ship lay-up period. It’s also exceptionally important to start the fuel oil and lubricating oil purifiers early in the reactivation period.
Spare Gear and Equipment Lead Times
It must be remembered that some equipment can take a significant amount of time to be sourced. What’s more, locations for cold lay-ups can often be remote, meaning deliveries might take longer. Therefore, an inspection of equipment should be carried out as early as possible in the reactivation stage, so that orders can be placed to ensure timely delivery of spare parts.
What is a lay-up in shipping?
A ship lay-up is when a ship is taken out of service, often in times of economic hardship, and temporarily moored with a reduced crew.
What does warm lay-up mean?
A warm lay-up is when a ship is laid up but with an eye on reactivating the ship quickly when needed. A reduced crew will be maintained, but the crew won’t be as small as during a cold lay-up.
Why is lay-up of ships important in the international shipping business?
Lay-ups are vital as they’re an option for shipping companies during times of economic hardship. They allow a company to retain their assets while also making significant savings on outgoings such as crew and fuel.
What is lay-up management?
Many companies offer ship lay-up management and will manage the entire lay-up period of a vessel, from the initial lay-up to the vessel’s reactivation. They can also often supply crew for the duration of the ship lay-up.
How to reactivate a ship after a period of lay-up?
Reactivation is often a long process, assisted by the keeping of thorough logs throughout the lay-up period. To determine the scope of work required to reactivate a vessel, the Classification Society should be consulted. All spares should also be stocked during the reactivation period, plus any appropriate certificates should be obtained.
As can be seen, a ship lay-up is not a simple endeavour and huge amounts of planning are needed to decide where and how a ship will be laid-up. The work is also significant when it comes to reactivating a laid-up ship, but will be made easier if proper logs are kept throughout the lay-up period.
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