The Unwanted Ships: How to Lay-Up a Vessel

Credit: DigiArt Kay-Åge Fugledal – www.digiart.no

It is always a big financial decision to lay-up a vessel, and with market conditions these days it has become a more frequent occurrence, but how does it actually work and what does one need to take care of?

To lay-up a vessel means to stop using it for a certain period. It will simply be anchored in appropriate waters. The reasons for lay-up might be to wait for a better scrap price or to deactivate the vessel due to over-capacities with the intention of activating it again later. Lay-up periods can be as short as a few weeks and as long as five years and more.

The Norwegian Shipowners’ Association says that in February, 101 of its members’ offshore vessels were in lay-up, as reported on 31st March 2016 – a statistic which is expected to rise. The same is true of container ships. By December 2015 the numbers rose to a new high with 331 reported as idle vessels or 1,36 million TEU (source: Alphaliner.com).

This example makes it clear that the treatment of vessels differs according to the lay-up period and the reason for the lay-up. As the treatment differs so do the obligations and requirements assigned by class, flag state and port authorities. They all have their influence.

Of course there are more parties involved, for example some insurance companies may accept a payment hiatus if the vessel is in lay-up for more than 30 days. In general, all responsible parties should be informed about the lay-up period and its reasons (e.g. scrapping) as their requirements depend on it.

Hot or Cold?

The operator must first decide on either a hot lay-up or a cold lay-up. In a hot lay-up condition the ship engines and machinery keep running so that the re-commissioning of the vessel can be carried out very quickly, and the vessel’s preservation is much easier and cheaper compared to a cold lay-up. The operational costs are higher, more crew is required and machinery in operation has the increased cost of consumables.

In a cold lay-up vessels are only supplied with emergency energy for lights, windlass / mooring winches and fire extinguishing – often by portable generators installed on deck. Depending on the length of lay-up, three weeks or more should be expected for re-commissioning. Should the lay-up be five years or longer then the re-commissioning time is unpredictable and can last months.

The main concern here is preservation against humidity, leakage of chemicals and condition of the hull (sea chest / sea water lines).

To allow dehumidification of engine rooms (depending on DP level) a dehumidification machine has to be installed and connected to the engine / FRAMO room. Other items to keep in mind are:

• Sea water tanks
• Cargo rooms
• Ballast tanks
• Bow thruster rooms

Classes, Flag States and Port Authorities

Minimum manning during cold lay-up is expected by many classes and port authorities to cover at least fire, leakage, mooring and security watch. However, the Safe Manning Certificate applies only to vessels in operation, while vessels are safely at anchor, within port limits or alongside. Instead, requirements of flag states and port authorities apply to laid-up vessels. Flag states in general require notification of vessels laid-up for longer periods – the requirements vary from short notification to a detailed lay-up plan.

Example of hot lay-up plan:

• Lay-up procedures
• Proposed manning
• Emergency response (fire, collisions, hurricanes, etc)
• Navigation watches (if at anchor)
• Security plan
• Class surveys / audits
• Procedures for re-commissioning

Example of minimum manning requirements (hot lay-up):

• One master, one officer, three deck crew
• One CE , two engineering crew
• Sufficient crew to maintain safety functions

In addition, class surveys take place – for example the DNV carries out an annual lay-up survey (covers watertight integrity, bilge system, fire hazards and equipment in use).

Where to put it?

Ideal places for lay-up have good grounds for anchoring or mooring, and almost no current or heavy winds (e.g. should be outside of the typhoon belt). Furthermore it should be legal and authorized by the local port authority.

Another possibility is a cheap lay-up berth. This choice avoids supply problems for the watch keepers and grants easy access to the vessel for surveyors and crew, however, it comes at the cost of renting the berth.

Reactivating the Idle Vessel

Depending on the length of the idle time a number of surveys have to be carried out before the vessel can continue with its service. For example some class authorities require a sea trial when the vessel has been laid up for 12 months or longer. Furthermore, expired certificates need to be renewed before the vessel can be re-commissioned.

Other certificates like the SMC (Safety Management Certificate) become invalid after six months of lay-up (Flag states can override this) and an interim audit has to be carried out for reactivation. The same applies to the ISSC.