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Salvage Industry Saw Revenue Plummet in 2022 Amid COVID-19 Challenges

A 45-foot Response Boat-Medium boatcrew from Coast Guard Station Curtis Bay, in Baltimore, enforces a safety zone Sunday, April 10, 2022, around container removal operations for the grounded container ship Ever Forward in the Chesapeake Bay. U.S. Coast Guard Photo

Salvage Industry Saw Revenue Plummet in 2022 Amid COVID-19 Challenges

Mike Schuler
Total Views: 838
July 17, 2023

The International Salvage Union (ISU) has reported a sharp decline in revenue for international salvage companies in 2022, as the full impact of the COVID-19 pandemic presented significant challenges for the sector.

According to the ISU’s 2022 annual statistics, its members experienced a staggering 38 percent decrease in income compared to the previous year. Emergency response services generated a total of $166 million, comprising $66 million from Lloyd’s Open Form (LOF) cases and $100 million from non-LOF cases. Wreck removal income had nearly halved, plummeting to $55 million in 2022 from $108 million in the preceding year.

“Economic conditions are challenging and activity and income for our industry is volatile year-on-year,” said Captain Nick Sloane, ISU President. “The general trend towards a smaller number of larger and more complex cases enhances that annual variability.”

The ISU’s 2022 statistics revealed a historic low level of LOF cases, with only 26 reported among its members, generating a revenue of $66 million. This revenue accounted for 40 percent of all emergency response income and 21 percent of emergency response cases for the year. Additionally, SCOPIC (Special Compensation P&I Club Clause) revenue also saw a decline to $21 million in 2022, down from $42 million in the previous year.

“The numbers in this survey reflect the period when the world was still fully contending with the Covid pandemic which made operations and logistics more challenging,” said Sloane. “Throughout those difficult times ISU members showed time and again their problem solving and willingness to overcome obstacles to provide services to their clients, the shipowners, and their insurers. And, taken alongside the ISU’s pollution prevention statistics, these numbers demonstrate a dynamic industry which, in most years, performs some 200 salvage services.”

Revenues generated from operations conducted under contracts other than LOF amounted to $100 million in 2022, averaging $813,000 per non-LOF contract.

For the ISU members, wreck removal represents an essential source of income; however, it saw a dramatic decline in 2022, amounting to $55 million from 32 operations, compared to 2021’s $108 million from 56 operations, constituting 28 percent of the total income.

“Professional salvors protect the environment, reduce risk and mitigate loss. They also keep trade moving – which is demonstrated so clearly when there are large containership cases. We continue to work closely with key stakeholders to ensure that there is continued global provision of professional salvage services,” added Sloane.

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