GT Discussion Paper on GT Measurement

8/18/2019 GT Discussion Paper on GT Measurement

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Policy Research Corporation

Consequences of the

Gross Tonnage Measurement

A discussion document


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© Policy Research Corporation

Copyright 2005

Office Belgium: Office The Netherlands:

Jan Moorkensstraat 68 Parklaan 40

2600 Antwerp 3016 BC Rotterdam


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Table of contents

TABLE OF CONTENTS

I. BACKGROUND ........................................................................................................................... 1

II. THE TONNAGE MEASUREMENT CONVENTION: MAIN FEATURES ANDCONSEQUENCES........................................................................................................................5

III. IMPACT OF GROSS TONNAGE ON SHIP DESIGN...........................................................11

IV. COST CONSEQUENCES OF THE GROSS TONNAGE MEASUREMENT ..................... 15

IV.1. SHIPBUILDING COSTS ......................................................... ........................................................... ..... 15

IV.2. CREW COSTS .................................................. ........................................................... ......................... 16

IV.3. VOYAGE COSTS........................................................ ........................................................... ............... 16 IV.3.1. Port, canal and light dues..... ........................................................... ................................... 16 IV.3.2. Insurance costs ................................................... ........................................................... ..... 18

IV.4. OPERATIONAL COSTS......................................................... ........................................................... ..... 18

V. ALTERNATIVES SOLUTIONS TO THE USE OF GROSS TONNAGEMEASUREMENT.......................................................................................................................19

VI. CONCLUSIONS AND RECOMMENDATIONS ....................................................................23

ANNEX 1: PRESENTATION HELD AT THE 48TH

IMO SLF MEETING


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Discussion document on the impact of the GT criterion

LIST OF FIGURES AND TABLES

Figure I.1 : Line of reasoning........................................................................................................... 2

Figure V.1 : Alternatives for remedying the present situation ........................................................20

Table II.1 : Selected rules and regulations with GT thresholds .......................................................6


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I.

BACKGROUND

With the adoption of the ‘International Convention on Tonnage

Measurement of Ships, 1969 (TM Convention), the Contracting

Governments aimed to establish a truly international and uniform

measurement system of ships, that would do away with the bad

influence of tonnage measurement from ship design and would lead

to safer ship.

Since the coming into force in 1982 of the TM Convention, however,

serious questions have been raised with respect to its negative

influence on the safety of certain types of ships. In particular the issue

of the suitability of Gross Tonnage (GT), as defined in the TM

Convention, for measuring open top container vessels, small and

feeder vessels, bulk carriers and fishing vessels, has in recent years

resulted in various initiatives and proposals submitted by member

states of IMO to the ‘Sub-Committee on Stability and Load Lines and

of Fishing Vessels Safety’ concerning the long-term effect of tonnagemeasurement with regard to safety.

Open top containerships, because they provide adequate

freeboard, pitch angle and bow height, offer greater

The 1969 International Conven-tion on Tonnage Measurementof Ships, aimed to establish a

truly international and uniformmeasurement system of ships,that would do away with the badinfluence of tonnage measure-ment from ship design andwould lead to safer ship.

However, serious questions havebeen raised on the issue of the

suitability of Gross Tonnage(GT), as defined in the Tonnage Measurement Convention withrespect to its negative influenceon the safety of certain types ofships.


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worldwide rather than on restricted coastal services, has

also lead to calls for the re-assessment of the safety of

small ships.

The reduced freeboard for bulk carriers, resulting in a

significantly lower GT compared to vessels with the

same dwt and the simultaneous elimination of the

requirement of a forecastle, without any additional

requirement for hatch cover strengths, although

economically satisfactory for the ship owners, has been

identified as one of the main causes for the loss of an

inordinate number of bulk carriers in the last 30 years1.

Figure I.1. graphically presents the main line of reasoning of the

foregoing discussion.

Figure I.1 : Line of reasoning

Impact on capital, running

and voyage costs

Impact on capital, running

and voyage costs

International Convention

on Tonnage Measurementof ships, 1969

Rules and regulations(SOLAS, STCW, ILO, MARPOL)

Dues and tariffs(Port, canal, insurance, …)

GT as

standardmeasurement

Liability

conventions

Impact on


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A further examination of the reported and or investigated deficiencies

of the GT measurement reveals two different but superimposed

problems. The critics of the 1969 TM Convention point first and

foremost at the fact that the vessel measurement system exerts

pressure on the safety margins of the ship. Rather than to reward the

prudent naval architect, shipbuilder and ship owner, GT penalizes

them. As the GT measurement is the basis of several rates and tariffs

and represents thresholds or limitations for determining minimum

requirements for various mandatory or customary prerequisites or

provisions, an increased GT without a comparable increase in earning

capacity only leads to higher costs for the vessel’s operator. Moreover

the application of GT for setting port dues or other tariffs inevitably

leads to arbitrary tariff setting and discrimination between shipsdepending on types and sizes. The second problem, which has

attracted less attention up to now, concerns the lack of a rational link

between the various GT thresholds and the expected results from the

limitations that are being imposed.

This discussion document hasbeen prepared on request of the Directorate General for Civil Aviation and Freight Transportof the Dutch Ministry ofTransport, Public Works andWater Management and aims to provide a substantiated answerwith respect the adequacy of theGT measurement in today’sshipping environment.

This discussion document, which has been prepared on request of the

Directorate General for Civil Aviation and Freight Transport of theDutch Ministry of Transport, Public Works and Water Management,

aims to provide a substantiated answer with respect the adequacy of

the GT measurement in today’s shipping environment and review the

main problem areas that have been defined in connection with the GT

rules. Ultimately, it will present a number of possible alternative

solutions that have been proposed by various industry experts in order

to amend the noted defects and failings.

The first part of the discussion document will consider the main

features of the TM Convention and then present a comprehensive

review of the various international conventions and regulations that


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II. THE TONNAGE MEASUREMENT CONVENTION:

MAIN FEATURES AND CONSEQUENCES

The Tonnage Measurement Convention of 1969 establishes

regulations for determining the Gross and Net Tonnages of ships and

provides for the issuance of an International Tonnage Certificate to

every ship by the Government of the State whose flag the ship is

flying. Included in the Gross and Net Tonnages are all the enclosed

spaces which are bounded by the ship’s hull, by fixed or portable

partitions or bulkheads, by decks or coverings other than permanent

or movable awnings

2

. The Convention stipulates that all enclosedspaces are included in the GT, and in order to further explain and

clarify what is considered as being an enclosed space, lists in detail, a

number of excluded spaces. But, the Convention doesn’t distinguish

between the enclosed spaces that are provided to carry paying cargoes

and those that serve to improve the seaworthiness of the ship. As a

result, vessels incorporating good design features to enhance its safety

will have a higher GT because the additional enclosed spaces, that are provided to ensure such safety, are fully included in the final tonnage

measurement result.

In several international conventions the application of their

The Tonnage Measurement

Convention of 1969 establishesregulations for determining theGross and Net Tonnages ofships and provides for theissuance of an InternationalTonnage Certificate to everyship by the Government of theState whose flag the ship is flying.

Included in the Gross and Net

Tonnages are all the enclosedspaces which are bounded bythe ship’s hull.

International conventions suchf l SOLAS STCW


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Table II.1 : Selected rules and regulations with GT thresholds

Regulation Area of impact Subject GT Thresholds

SOLAS chapter IV Equipment Radiocommunications 300 GT

SOLAS chapter V Equipment and administrative Automatic ship identification system 300 GT, 500 GT, 3 000 GT

10 000 GT, 50 000 GT

Daily reporting 500 GT

(Simplified) voyage data recorders 3 000 GT, 20 000 GT

SOLAS chapter IX Administrative ISM Code 500 GTSOLAS chapter XI-1 Administrative Identification number 300 GT

SOLAS chapter XI-2 Equipment and administrative ISPS Code 500 GT

SOLAS chapter XII Equipment (Simplified) voyage data recorders 3 000 GT, 20 000 GT

MARPOL Equipment and administrative Threshold for certification 400 GT

STCW Convention Manning Madatory level of requirements for

certification of masters and ship mates

500 GT

3 000 GT

ILO C178: art. 1 Administrative Labour Inspection Seafarers Convention 500 GTILO C164: art. 11 and 9 Manning Health protection and Medical Care Seafarers

Convention

500 GT (and 15 seafarers)

1 600 GT

ILO C133: art. 5 Accommodation Minimum floor area 1 000 - 3 000 GT

3 000 - 10 000 GT

3 000 GT

10 000 GT

ILO C133: art. 7 Accommodation Recreation area 8 000 GT

ILO C133: art. 8 Accommodation Bathroom facilities 5 000 GT

5 000 - 15 000 GT

15 000 - 25 000 GT

25 000 GT

ILO C133: art. 9 Accommodation Water closet and facilities for changing clothes 1 600 GT

Convention on Limitation of Liability

for Maritime Claims 1976

Liability Limitation in respect of loss of life or personal

injury property claims

< 500 GT

501 - 3 000 GT

3 001 - 30 000 GT

30 001 - 70 000 GT

70 001 GT

* International Convention on

Liability and Compensation for

Damage in Connection with the

Carriage of Hazardous and Noxious

Substances by Sea 1996

Liability Compensation for accidents involving

hazardous and noxious substances; make it

possible for up to 250 million SDR to be paid

out to victims of disasters involving HNS

< 2 000 GT

2 000 - 50 000 GT

50 000 GT

* Not yet into force

Source : Policy Research Corporation


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Conventions deals with accommodation of crews, health protection

and medical care. The thresholds for additional requirements

regarding the accommodation of crews are respectively 1 600, 5 000,

8 000, 10 000, 15 000 and 25 000 Gross Tonnes. But for health

protection and medical care the imposed thresholds are 500 Gross

Tonnes for ships carrying more than 15 seafarers and engaged in a

voyage of more than three days and 1 600 Gross Tonnes. Manning

requirements in terms of size of the crew and individual qualifications

are subject to national regulations of the Flag State of the vessel. In

most cases the minimum crew levels and qualifications of officers

and ratings are decided on the GT of the ship.

Other, recommended but non-mandatory thresholds, that may have a

decisive impact on the ship owner’s decisions, are often based on GT.

They concern, for example, the calculation of premiums for

Protection and Indemnity insurance and the various levels of liability.

Although the P&I premium is expressed per Gross Ton, the decisive

factors determining the premium level are the claims record, the

profile and history of the fleet or ships to be insured (type of vessel,

age, number of ships, type of engines, classification society), the riskscovered and the perceived exposure and deductibles. Although P&I

Clubs offer unlimited cover, they impose limitations of liability which

are based on the GT of the ship.

Where all of the Conventions referred to above base their regulations

on GT, the MARPOL 73/78 Convention (International Convention

for the Prevention of Pollution from Ships, 1973, as modified by the

Protocol of 1978 relating thereto) generally imposes requirements

(e.g. for segregated ballast tanks, double hulls, construction

requirements) on the vessel’s deadweight. The MARPOL certification

system has as a general threshold 400 GT In several Annexes and


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The Oil Pollution Act of 1990 enacted by the Congress of the United

States sets thresholds for the total liability of a responsible party on

the basis of GT (including for the removal costs, damages and

liability of third parties). The thresholds are 3 000 GT for tankers and

a limitation either per Gross Ton or a defined amount whichever is

greater for other vessels.

The International Convention on Liability and Compensation for

Damage in Connection with the Carriage of Hazardous and Noxious

Substances by Sea (HNS 1996) provides for limits of liability based

on GT (ships not exceeding 2 000 Gross Tons can limit their liability

to SDR 3 10 million, whereas ships above that limit but not exceeding

50 000 Gross Tons can limit their liability to SDR 10 million plus

1 500 SDR for each additional Gross Ton. Ships in excess of 50 000

Gross Tons can limit their liability to the liability limit of the ships

between 2 000 and 50 000 Gross Tons, but with an extra of 360 SDR

for every additional Gross Ton. The total possible amount the ship

owner is liable for is anyway limited to 100 million SDR.

In August 2003 the European Union introduced new regulations forfishing vessels regarding entry and exit and the limitation of the

fishing fleet’s total catching capacity (Directive 1438/2003). These

regulations use the GT in combination with engine power as a

threshold measure to determine reference levels of the fishing fleet.

Lack of causal link

In several instances thereference to the GT measure israther irrational because of thelack of causal link between thespecific aim that is pursued insetting the threshold and the GTmeasure itself.

Apart from the argument whether GT has implications on the safety

and the stability of a vessel, it is obvious that in several instances the

reference to the GT measure is rather irrational because of the lack of

causal link between the specific aim that is pursued in setting the

threshold and the GT measure itself:


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III. IMPACT OF GROSS TONNAGE ON SHIP DESIGN

It is stated that the GT measurement system, through its application in

international rules and regulations or because it is used as a yardstick

for levying duties, has an effect on ship design. In this Chapter, theadverse effects of the current GT measurement regime will be

illustrated for specific ship types.

The GT measurement system,through its application ininternational rules and regula-

tions or because it is used as a yardstick for levying duties, hasan effect on ship design.

a/ Container vessels

Several groups of container carrying ships can be distinguished, for

which the GT measurement presents specific challenges:

− Small containerships (of around 3 000 GT or below): for theseships the load line convention rules and the ship stability

prescriptions allow for designs with minimal freeboard and reserve buoyancy resulting in limited tolerance levels in case of humanerror (mistakes in navigation or cargo handling) or exceptionalweather conditions. The application of the GT measurementinduces naval architects and shipbuilders to build ships with ‘odd’

shapes (relatively short and narrow ships with no forecastle butwith cut-off stern, small engine room and tight crew accom-modation spaces);

− Medium and large cellular container ships (over 6 000/ 8 000TEU): freeboard on larger container ships is less of a problem, but


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A solution for the safety and lashing problems could be thedeployment of open top (hatch coverless) ships, with very highfreeboard. But their higher GT has worked as a disincentive andshipping lines seem now reluctant to order them. The GTmeasurement not only increases the basis on which these vesselsoften are billed, but a deficiency in the formula itself, foresees thatopen top container ships can’t be larger than 30 000 GT. A

question that is raised by ship designers is whether the IMOguidelines for open-top ships are not excessive.

An additional benefit for the ship owner of operating an open shipis the lesser risk that parametric rolling or heavy weatherconditions would result in a number of containers being thrownoverboard or severely damaged on deck. Jettison of containers onsuch ships is, however, not an option. With the size of containerships exceeding the 10 000 TEU barrier, the design limits of the

traditional container vessel have been stretched to the maximum.Open-top container ships may offer a solution to overcome thesedesign limitations and ensure safer vessel operation and containerhandling.

b/ Bulk carriers

These are typically wide vessels with reduced freeboard, no forecastle

and non-re-enforced hatch covers on the forward holds. They are

prone to general and localised stresses of the structure and hatches

and to collapsing bulkheads.

The loss record of bulk carriers in the 70’s and 80’s confirmed that

these vessels were accident-prone. Hence, the recommendation made

in 1991 by the IMO for adopting hull stress monitoring systems and by the Classification Societies for a revision of the rules for structural

and survey requirements. Since 01/01/2005 as per regulation 39 of the

Load Lines Convention (ICLL), a forecastle has become compulsory

on bulk carriers.


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d/ RoRo and Car carriers

They typify vessels with a high freeboard needed for the safety of the

ship and the cargo but resulting in high GTs. A number of Port

Authorities have acknowledged this fact and have adapted their port

dues accordingly.

e/ Livestock carriers

Freeboard of these vessels may not be higher but they are penalised

by the GT measure because the extensive above deck livestock

houses, providing better protection of the cargo, are included in the

total enclosed volume. As on traditional container ships the deck

capacity is exempt from tonnage measurement this is a good example

of discrimination resulting from GT measurement.

f/ Passenger vessels

For these, space critical vessels, the GT is the appropriate measure

because it is without detriment to the safety of the ship and it

approximates well their earning potential.

g/ Fishing vessels

GT thresholds set the minimum values for safety levels on basis of

worldwide mean conditions. For the fishing sector (specifically ocean

going trawlers), operating in harsh environments, such minimum

safety standards are insufficient. Specifically for new buildings and

conversions, GT thresholds become a factor that lead to a reduction in

crew accommodation spaces and covered working areas. Providing an

increased forecastle height to improve safety adds to the GT but not

to the catching capacity. New designs for trawlers may incorporate a

new type of RSW tank with cylindrical shape an improved fish


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IV. COST CONSEQUENCES OF THE GROSS TONNAGE

MEASUREMENT

IV.1. SHIPBUILDING COSTS

Ship owners demand from their naval architects and shipbuilders that

they provide ships that will allow them to maximize earnings and

minimize costs. This only proves they have good commercial sense.

To achieve this challenge, the designer of the ship must at the same

me strive to optimize the cargo space on board (i.e. the ship’searning capacity) and reduce steel usage to a minimum. This might

result in vessels with minimal freeboard offering a GT that just

marginally remains below the various threshold values that

International Conventions impose. Hence, ships may be built against

set limits (explaining, for example, the number of ships around 499

and 2 999 GT in the fleet).

ti

In essence, Ship are designed tomaximize earnings and minimizecosts. This might, however,result in vessels with minimal freeboard offering a GT that justmarginally remains below thevarious threshold values that

International Conventionsimpose.

Especially designs for smaller vessels offer very reduced or no safety

margins. The safety norms that are being used satisfy the ‘average’

ship but leave little or no reserve to compensate for human error,

incorrect stowage or exceptional weather conditions. Under pressure


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territories and the Polish ports which use as their tariff base the

volume of the vessel as defined by length, breadth and summer draft5.

Canal dues are traditionally set on the GT but in 2005 the Panama

Canal Authority changed its charging unit for containerships from GT

to the vessel’s TEU capacity. Where light dues are separately

charged, the basis is normally GT.

Thus, if the GT of a vessel because of an improved safety design

increases, say by 10%, the result for the ship owner will be an

additional 10% increase in his port, canal and light dues. The

significance of port dues in the total port disbursement note of a ship

owner varies greatly from port to port call. Also, their coverage is far

from uniform and overall Port Authorities related dues may oscillate

wildly (between for example € 1 000 and € 30 000 per call of a

10 000 DWT/ 7 000 GT general cargo ship). As a general rule it can

be taken that port dues are significant costs for a ship operator,

especially because of the number of repeated port calls in a year. For

a 10 000 GT container vessel the annual port costs amount to approx.

€ 650 000 and between € 1 and € 1.5 million for a 40 000 GT

container vessel.

When considering the impact of a GT on the amounts ship operators

have to disburse to ports, one should not overlook two important

facts:

− Firstly, most ports offer considerable rebates on the base level oftheir port dues (depending on type and size of vessel, type of trade,

number of calls per year, etc.);

− Secondly, published tariffs are rarely applied as indicated in thetariff book and many shipping lines carry enough clout tonegotiate with the Port Authority a more advantageousarrangement.


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IV.3.2. I NSURANCE COSTS

Two major components make up the insurance costs for a vessel: the

hull and machinery insurance costs and the P&I and related ship

costs. Hull and machinery insurance premiums are almost always set

on the basis of the declared value of the vessel and rarely or never on

GT. But as already pointed out, many other factors play indetermining the premium levels, such as the reputation and

experience of the owner or manager, the claims record (a lot of

emphasis is placed by underwriters when calculating their rates), the

size of the fleet to be insured, the trade and the vessel (type, value,

flag, classification society, IMO compliances, crew and the split of

the RDC (collision cover) between Hull and Machinery and P&I

insurance. Annual totals for Hull and Machinery typically vary

depending on the mix of parameters mentioned, between US$ 50 000

and US$ 200 000 (passenger vessels not included).

The P&I underwriters are adamant that they do not rate fleets or

vessels on a tariff basis. A huge variation in premium is to be

expected as they are essentially set as a result of the perception of theunderwriter, the claims record and the bargaining power of the

insured. The underwriting factors for P&I are basically the same as

for the Hull and Machinery insurance except such items as hull value,

increased values and disbursements6 which are not relevant to P&I.

As an indicative example, the annual P&I contribution for say a

25 000 GT ship is between € 45 000 and € 70 000, although for

certain ships much higher or much lower contributions will apply.

Hull and machinery insurance premiums are almost always seton the basis of the declaredvalue of the vessel and rarely ornever on GT.

The annual P&I premium,

however, is based on the GT ofthe vessels.

IV.4. OPERATIONAL COSTS


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V. ALTERNATIVE SOLUTIONS TO THE USE OF

GROSS TONNAGE MEASUREMENT

The preceding overview reveals or confirms the irrelevance of GT for

determining the size of a vessel or for establishing thresholds for theapplication of rules and regulations. The GT measurement doesn’t

succeed in realizing the objectives that were the basis for setting

thresholds. It obviously leads to less safe ships whilst hampering the

application of constructive new ideas and design innovation. It is

therefore urgent to consider alternatives for remedying the present

situation. An overview is presented in Figure V.1.

A first step, which wouldn’t need amendments of the 1969 Tonnage

Measurement Convention, would be for the maritime transport

stakeholders (Governments, international maritime authorities, ship

owners, ship designers, shipbuilders, classification societies, port

authorities, maritime lawyers) to investigate the genuine link between

the thresholds stated in the various Convention rules and tariffs in GTand the aims and objectives of these conventions and tariffs.

For example the minimum requirements regarding life boats should

be decided on the basis of the maximum number of persons on board,

Chapter V gives a number ofalternatives for remedying the present situation with respect tothe negative impact of the use ofthe GT measurement.

STEP 1: investigate the genuinelink between the thresholdsstated in the various Conventionrules and tariffs in GT and theaims and objectives of theseconventions and tariffs.


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Figure V.1 : Alternatives for remedying the present situation

Investigate the

genuine link

between the

thresholds stated

in the various

Convention rules

and tariffs in GT

and the aims and

objectives of

these conven-

tions and tariffs

Support, as

a transitory

measure,

proposals to

introduce a

reduced GT

formula for

open top

container ships

Take the reduced

GT forward as a

correction and

enter this in lieu

of the previously

calculated GT on

the first page of

the tonnage

certificate

Introduce for all

ships a new GT

measurement, in

which thecovered spaces

specifically

provided for

safety, would be

deducted from

the GT as

defined under

present rules

Modernise the 1969 Tonnage Measurement Convention, so that future adaptations of the

convention only need implicit and not explicit ratification by the member states

1 2 3 4

Source : Policy Research Corporation

The re-consideration of the logical link between GT and what the

thresholds aim to achieve would, to a not insignificant extent, reduce

the use of GT. It would therefore make the whole issue less charged

and this would substantially improve the chances that vessels,

offering a higher GT to be safer, become more attractive to owners

and operators from a costs and earnings point of view. Apart from theinevitability of getting the full co-operation of all stakeholders, this

step implies the acceptance of the shipping community to revise a

host of existing conventions and to reconsider traditional pricing

strategies, tariff structures and rate levels.


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−

a ‘register tonnage’ based on the length, the breadth and thesummer draught of the vessel;

− or to accept for these ships a reduced GT for the calculation ofGT-based fees based on the provisional formula:

Reduced GT = GT {1 – [(30 000 – GT) / (1 000)] x 0.07]}

−

or to offer a flat reduction rate of 10% of the GT;

In the transitional phase, before final adoption and inclusion in the

1969 Tonnage Measurement Convention, the reduced GT formula

shown above, should be subject to continuous review and adjustment,

as the coefficients used may have to be improved and refined.

STEP 3: take the reduction inGT forward and enter this inlieu of the previously calculatedGT on the first page of thetonnage certificate.

As a next step, an amendment to the 1969 Tonnage Measurement

Convention has been proposed by Germany. It is to take the reduction

in GT forward as a correction for the number representing the

enclosed volumes of the ship hull and to enter this in lieu of the

previously calculated GT on the first page of the tonnage certificate.

The proposals specifically targeted to adjust or reduce the GT of

open-top container ships, find their origin in the fact that although

being safer ships, the GT measurement penalizes these ships and

discriminate against their owners or operators.

In this respect, the application of Regulation 1(3) of the TM

Convention could also be considered. This regulation concerns craftsof novel designs and states that ‘’the gross and the net tonnage of

novel types of craft whose constructional features are such to render

the application of the provision of these Regulations unreasonable or

impracticable shall be as determined by the Administration’. What


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GT would thus be calculated as follows: GT as determined under

present tonnage rules minus the covered spaces that are provided for

safety purposes within the present freeboard and those extra spaces

that result from providing a higher freeboard in a revised design. The

tonnage value thereby obtained would be used to calculate the various

fees and charges due to the vessel. For the crew accommodation a

similar calculation could be carried out to determine the extra coveredspace that would not be included in the GT for charging purposes. A

major disadvantage of following this step is that it may again lead to

creative thinking solely aimed at artificially reducing the GT. It would

mean a return to the pre-1969 Convention days.

An even more radical step than

the proposal to introduce a newGT measurement system, wouldbe to establish the size of thevessel on the ‘indisputable’ physical dimensions of the ves-sel, i.e. length overall, breadthoverall and summer draught andcalculate the fees on theobtained volume basis.

An even more radical step than the proposal to introduce a new GT

measurement system, would be to establish the size of the vessel on

the ‘indisputable’ physical dimensions of the vessel, i.e. length

overall, breadth overall and summer draught and calculate the fees on

the obtained volume basis. Some ports have introduced a charging

system based on length overall (e.g. the Port of New Orleans for

dockage). Changing the charging base doesn’t imply a loss of revenue

for Port Authorities, as they will be able to adjust the basis of thetariffs. Hence, port dues in French ports are generating much higher

revenues than in competing European ports although they have been

set on volume, calculated as the product of length, breath and draft.

A constructive idea to allow faster adaptation of amendments could

be to modernise the ratification process of the 1969 TM Convention

towards implicit rather than explicit ratification, in line with more

recent Conventions such as MARPOL and SOLAS.

Irrespective of a revision of the tonnage measurement system, it is

necessary to critically re examine and impartially scrutinize the


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VI. CONCLUSIONS AND RECOMMENDATIONS

The GT is a universal and uniform measure that was introduced to

determine unequivocally the size of a vessel and use it for charging

purposes. Since the adoption in 1969 of the Tonnage MeasurementConvention, there has been an escalation of rules in maritime

transport that set thresholds for enforcing minimum standards or

limiting liabilities. For most of these thresholds the GT offers no

rational basis and could and should therefore be discarded in favour

of thresholds that ensure a strong link between the threshold values

and the stated target or objective.

Based on experience and factual data, maritime industry experts

including naval architects, shipbuilders and classification societies

have come to the conclusion that the 1969 Tonnage Measurement

rules as presently applied, tied to the many, often unrealistic

thresholds imposed by a host of conventions, have as major

detrimental effect that although ships are being built, within all thestated rules, they are less safe than they could and should be. Because

virtually all safety margins have been used up and vessels have to

operate in circumstances that are considerably more taxing than the

average operating conditions on which most rules are based, the

Based on experience and factualdata, maritime industry expertsincluding naval architects, ship-builders and classification so-cieties have come to the conclu-sion that the 1969 Tonnage Measurement rules as presentlyapplied, has as major detri-mental effect that although shipsare being built, within all thestated rules, they are less safethan they could and should be.


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container ships and container ships with a traditional design) and the

deterioration of working conditions on board ships.

The case to address the negative consequences of the GT

measurement system has been clearly made, as testified by the many

submissions made by the member states to the IMO’s ‘Sub-

Committee on Stability and Load Lines and on Fishing VesselsSafety’ and by the numerous studies by maritime research institutes

and ship designers. The problem now lies in finding workable

alternatives. These will inevitably have to take into account the type

of vessel and the purpose that is being pursued by the use of a vessel

measurement standard. Given the anticipated difficulty to change the

1969 Tonnage Measurement Convention and the time that will be

needed, it may be appropriate to first introduce interim measures to

correct problems and then to consider a more fundamental change to

the tonnage measurement rules.

If it is accepted that an adaptation of the GT measurement rules or a

new measurement regime is necessary, the result should be an

unambiguous, incontestable and consistent set of proposals. First, theuse of GT for establishing threshold values for many diverse causes

should be carefully examined on rationality and where appropriate,

alternative bases for the thresholds should be proposed. Secondly, the

main line of force of any proposal should be to undo the presently

inherent link between ship safety (as incorporated in the design and

construction specifications) and the GT. Finally there is a need to

reconsider the appropriateness of the present subdivision and damage

stability requirements (intact and damage) for dry ships and the link

to load line rules and ship measurement.

The problem now lies in findingworkable alternatives. Thesewill inevitably have to take intoaccount the type of vessel andthe purpose that is being

pursued by the use of a vesselmeasurement standard.

If it is accepted that an adap-tation of the GT measurementrules or a new measurementregime is necessary, the result

should be an unambiguous,incontestable and consistent setof proposals.


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ANNEX 1: PRESENTATION HELD AT THE 48TH

IMO SLF MEETING


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Policy Research CorporationPolicy Research CorporationSOUNDSOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCHSOLUTIONS BASED ON SCIENTIFIC RESEARCH

Consequences of the

Gross Tonnage (GT) measurement

Gustaaf De Monie, Senior Director

Sub-Committee on Stability and Load Lines

and of Fishing Vessels Safety

London, 13 September 2005

CONTENTS


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© Policy Research Corporation 2London, 13 September 2005

CONTENTS

1969 Tonnage Measurement Convention: main features and

consequences

Impact of the Gross Tonnage measurement system on ship design

Cost consequences of the Gross Tonnage measurement system

Alternative solutions to the use of Gross Tonnage

Conclusions and recommendations

THE 1969 INTERNATIONAL


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TONNAGE MEASUREMENT CONVENTION

The International Tonnage Measurement Convention of 1969

• establishes regulations for determining the Gross and Net Tonnages of ships

• provides for the issuance of an International Tonnage Certificate to every ship by

the Government of the State whose flag the ship is flying

Included in the Gross and Net Tonnages are

• all the enclosed spaces which are bounded by the ship’s hull, by fixed or portable

partitions or bulkheads, by decks or coverings other than permanent or movable

awnings

The Gross Tonnage of a ship is determined by• GT=K 1V

• where V is the total volume of all enclosed spaces of the ship in cubic meters and

K 1 = 0.2 + 0.02log10(V)

THE 1969 INTERNATIONAL


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TONNAGE MEASUREMENT CONVENTION

RESULT

Vessels incorporating good design features to enhance safety

will have a higher GT because the additional enclosed spaces,

that are provided to ensure such safety, are included

The 1969 International Tonnage Measurement Convention aimed to establish a truly

international and uniform measurement system of ships, that would do away with the

bad influence of tonnage measurement from ship design and would lead to safer ships

The Convention stipulates that allenclosed spaces are included and, inorder to further explain and clarify

what is considered as being an

enclosed space, lists in detail anumber of excluded spaces

The Convention doesn’t distinguish

between the enclosed spaces that are

provided to carry paying cargoes and

those that serve to improve the

seaworthiness of the ship


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RECORDED PEAKS AT THRESHOLDS IN GT


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(BY VESSEL TYPE)

Number of

vessels

(delivered)

number of

vessels

< 3000 GT

% of total GT

per vessels

type

Significant

peaks at

thresholds

GT correlation

with DWT

Container vessels 3 367 2.7% 0.2% no 98.6%

Dry cargo vessels 10 300 53.7% 18.8%

499 GT

2 999 GT 97.9%

Bulk carriers 6 190 4.3% 0.2%

499 GT

699 GT 99.4%

Tanker 9 126 34.2% 1.9%

499 GT

699 GT 98.8%

Roro vessels 1 801 16.7% 1.3% no 79.4%

Fishing vessels 2 637 98.3% 89.9% 499 GT 79.3%

Miscellaneous 4 477 76.9% 22.9% 499 GT 80.0%

Based on Lloyd’s Register Fairplay database


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IMPACT OF GROSS TONNAGE ON SHIP DESIGN


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Vessel type Cause Consequences

Small general cargo

and container vessels

of 3 000 GT or below

Load line convention rules and the ship

stability prescriptions allow for designs with

minimal freeboard and reserve buoyancy

resulting in limited tolerance levels in case ofhuman error (mistakes in navigation or cargo

handling) or extreme weather conditions

Induces naval architects and

shipbuilders to build ships

without forecastle, but with

cut-off stern, small engineroom, tight crew

accommodation spaces, …

THE DONGEDIJK

CAPSIZED WHILE

MANOEUVRING



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Medium and large

cellular container

ships

The number of containers carried above

deck becomes ever larger

Risk that heavy weather conditions and parametric rolling would result in large

numbers of containers being thrown

overboard or severely damaged,

including containers with dangerous or

noxious substances

Lashing of deck containers becomes

a costly, ineffective and for the

lashing gang, a perilous task

The design limits of the traditional

container vessel have been stretched

to the maximum and innovative

designs become imperative



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T E U c a p a c i t y

Scatterdiagram TEU versus GTFor a sample of container ships around 3 600 TEU

GT

3 300

3 350

3 400

3 450

3 500

3 550

3 600

3 650

3 700

3 750

3 800

30 000 35 000 40 000 45 000 50 000 55 000 60 000

P&O Nedlloyd Oceania

P&O Nedlloyd Damman Frankfurt Express

MSC Kerry

Maersk Toyama

Conti Shanghai

A possible solution for the safety and lashing problems could be the deploymentof open top (hatch coverless) ships. Because of the imposed higher freeboard,

they are more expensive to build and their higher GT is a serious disincentive

11% more GT

than average



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Bulk carriers Wide vessels with reduced freeboard,

no forecastle and non-re-enforced hatch

covers on the forward holds

Prone to general and localised

stresses of the structure and the

hatches and collapsing bulkheads

Berge Artic, 175 000 dwt Remedial action:

1/ adoption of hull stress

monitoring system

2/ revision of the rules for structural

and survey requirements

3/ since 1/1/2005 forecastle required

as per ICLL regulation 39

= higher GT

COST CONSEQUENCES OF THE



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Cost item Issue Cost impact

Ship building

costs

1/ ships offering higher freeboard and, consequently,

higher GT, use more steel

2/ vessels exceeding GT thresholds requireadditional navigational and other equipment

3/ ships offering more spacious accommodation for

their crew have higher building costs because of

higher GT and additional fittings

Between 5 and 25 percent

extra, depending on the size

and type of the vessel

Crew costs If a vessel, because of its relative higher GT, falls

into a class of vessel for which more stringent

certification requirements exist, crew costs may

increase considerably (applies especially for vessels

exceeding the 3 000 GT threshold)

Crew cost could go up

anywhere from 10 to 20

percent or between

€ 50 000 and € 200 000 per

annum

Voyage costs The operational time of a vessel at berth is a main

cost element that can be influenced by GT if this

measure leads to less performing vessels (total

required lashing times of standard container vessels)

The cost effect, although

indirect in nature, can be

significant: e.g. a result of 10

to 15 percent extra berth time




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Port, canal and

light dues

In most ports the general port dues

have been set on the basis of the GT

of the vessel. Exceptions are the

French ports, the ports in formerFrench territories and the Polish

ports which use the volume of the

vessel as defined by L x b x Te

Canal dues are traditionally set on

the GT but in 2005 the Panama

Canal Authority changed its charging

unit for containerships from GT to

the vessel’s TEU capacity

Where separately charged, the basis

for levying light dues is normally GT

A 10% larger GT will result for the ship

owner in a 10% increase in the port, canal and

light dues of the ship owner

The significance of port dues in the total port

disbursement note of a ship owner varies

greatly from port to port call. Also, their

coverage is far from uniform.

The total impact on cost can be significant

because of the total number of port calls a

vessel makes in a year. (Note the difference

between shortsea and deepsea trades)

For a 10 000 GT container vessel the annual

port costs amount to approx. € 650 000 and

between € 1 and € 1.5 million for a 40 000GT container vessel




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Insurance costs Two major components make up the

insurance costs for a vessel:

• the hull and machinery insurance costs

• the P&I and related ship costs

Hull and machinery insurance premiums

are almost always set on the basis of the

declared value of the vessel and rarely or

never on GT

The annual P&I premium, however, is

based on the GT of the vessels

Huge variations in P&I contributions

exist as these are the result of the

perception of the underwriter, claims

record and bargaining power of theinsured.

As an indicative example, the annual

contribution for a 25 000 GT container

ship is between € 45 000 and € 70 000

CONCLUSION ON COST CONSEQUENCES:

Through its application in international rules and regulations, or because it

is used as a yardstick for levying duties, the cost impact of the GT

measurement system for ship owners or operators can be significant

ALTERNATIVES FOR REMEDYING THE PRESENT SITUATION


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Investigate the

genuine link

between thethresholds stated

in the various

Convention rules

and tariffs in GTand the aims and

objectives of

these conven-

tions and tariffs

Support, as

a transitorymeasure,

proposals to

introduce a

reduced GTformula for

open top

container ships

Take the reduced

GT forward as a

correction and

enter this in lieu

of the previously

calculated GT onthe first page of

the tonnage

certificate

Introduce for all

ships a new GT

measurement, inwhich the

covered spaces

specifically

provided for

safety, would be

deducted from

the GT as

defined under

present rules

Modernise the 1969 Tonnage Measurement Convention, so that future adaptations of the

convention only need implicit and not explicit ratification by the member states

1 2 3 4

CONSEQUENCES OF THE PROPOSED

ALTERNATIVES SOLUTIONS


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ALTERNATIVES SOLUTIONS

1 2 3 4

Requires full co-

operation of all stake-

holders and implies

the acceptance of the

shipping community

to revise a host of

existing conventions

The reduced GT

formula should be

subject to continuous

review, as the

coefficients used may

have to be improved

and refined

It may again lead to

creative thinking solely

aimed at artificially

reducing ship GT. It

would mean a return to

the pre-1969

Convention days

Publication of

Circulars

Revision of the

1969 TM

Convention

New measurement

convention needed

No direct impact

on the 1969 TM

Convention

Any other

ALTERNATIVES ?

Under the present

convention this

will demand

explicit

ratification by the

member states


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ALTERNATIVE SOLUTIONS TO THE USE OF



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An even more radical alternative than a change in the calculation of the GT

would be to abandon GT and to establish the size of the vessel on the

‘indisputable’ physical dimensions of the vessel, i.e. length overall, breadth

overall and summer draught and, amongst other, calculate the fees on theobtained volume basis.

Main physical

dimensions of a

vessel as a basis

for levying dues

breadth

WHAT CAN BE DONE ANYWAY TO IMPROVE SAFETY


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Irrespectively of a revision of the tonnage measurement system, it is necessary tocritically re-examine and impartially scrutinize the current safety requirements.

In particular it will be necessary to revise the vessel stability requirements andincrease the in-built safety margins. These should be made specific for variousship types.

In any event, even without the introduction of reduced or revised GTs, it is possible to improve the safety of the vessel by other instruments. These couldinclude

• improved stowage planning

• better supervision of cargo stowage in ports

• the generalized use of ship stability calculators

• the fitting of stabilizers

• etc.

CONCLUSIONS AND RECOMMENDATIONS


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The 1969 Tonnage Measurement rules as presently applied, tied to the many,

often unrelated thresholds imposed by a host of conventions, can make ships,

although built within all the stated rules, less safe than they could or should be

Ships are designed to minimise the total GT for a maximum earning capacity. As

a direct consequence, GT gives an incentive to reduce freeboard and or spare

buoyancy at the expense of safety. Scant attention is paid to innovative techniques

that could improve crew comfort, cargo care or vessel sea kindliness

Because virtually all safety margins have been used up and vessels have to

operate in circumstances that are considerably more taxing than the average

operating conditions on which most rules are based, the probability of cata-

strophic accidents and the occurrence of calamitous events cannot be ruled out


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Policy Research CorporationPolicy Research CorporationSOUNDSOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCHSOLUTIONS BASED ON SCIENTIFIC RESEARCH

Consequences of the

Gross Tonnage (GT) measurement

Gustaaf De Monie, Senior Director

Office Belgium: Office The Netherlands:Jan Moorkensstraat 68 Parklaan 40

2600 Antwerp 3016 BC Rotterdam

tel : +32 3 286 94 94 tel: +31 10 436 03 64

fax : +32 3 286 94 96 fax: +31 10 436 14 16

e-mail : [email protected] e-mail : [email protected] : www.policyresearch.be website : www.policyresearch.nl

Documents

GT Discussion Paper on GT Measurement