Salvors tackled more projects on LOF contracts and extra wreck work in a stable sector that protects shipping, cargo, crew and the environment
Revenue from salvage and wreck removal has risen as salvors help ships in distress in a stable market for the sector.
The International Salvage Union (ISU)’s latest statistics show the industry is performing more emergency towage and response, driven by navigational incidents, cargo fires and mechanical failures.
When combined, ISU members reported gross revenue of US$406M in 2024, compared with US$398M in 2023. This comes from 191 services provided by the union’s members in 2024, up from 184 in 2023.
Emergency response services generated US$181M in revenue in 2024, with 29 Lloyd’s Open Form (LOF) cases resulting in US$118M in revenue and the rest (US$63M) coming from other contracts.
Revenue has risen from 2023 when there were 16 LOF cases generating just US$29M in revenue, showing these forms are being adopted for more salvage requirements in 2024.
Wreck removal income for ISU members in 2024 was US$205M from 40 services, also up from US$193M and 30 services in 2023, highlighting the growing importance of these environmental services to the maritime industry.
“These numbers show the industry has stabilised compared with the low point two years ago, but they are still well below the higher numbers from a decade ago,” says ISU president, John Witte.
“Sustaining the salvage industry so that professional contractors are available to respond around the world remains a focus both for ISU but also for the insurance and shipowning communities.”
ISU numbers are gross income in the year received, and not necessarily the year when the service was provided, as there can be a time lag in payments. From these revenues, salvage companies will have paid contractor costs, vessel charters and other third-party services.
“Our members facilitate world trade by providing marine services which save life, protect the environment, mitigate risk and reduce loss,” says Mr Witte. “The salvage industry remains under financial pressure. But we are encouraged that shipowners and the marine insurance community openly recognise the importance of our industry and the need for it to be sustainable.”
He highlights the rise in LOF cases in 2024 from 2023 as a positive for the sector, which had the lowest level of LOF contracts for ISU members since the union started collecting statistics around 30 years ago.
However, salvors must continue investing in vessels, assets, equipment and people to meet the changing requirements from the shipping industry.
“The potential impact of cases is getting larger, particularly with container ships, and also because of the greatly increased amount of bunkers carried by the largest ships,” says Mr Witte.
Operational highlights
Demonstrating the complexity of salvage and wreck removal operations in 2024 was the response to the deadly emergency when container ship Dali struck and collapsed a major interstate highway bridge in Baltimore, USA in March 2024.
“ISU members respond effectively to the Baltimore bridge disaster, removing the collapsed bridge debris in difficult conditions and refloating the container ship,” says Mr Witte.
“It was a case which demonstrated in practice the ISU’s key messages about the value of professional salvors in reducing loss, saving property and keeping ports open.”
Salvors have also dealt with more fires on ships, particularly on those transporting containers and electric vehicles. “Fires on container ships and battery fires in car carriers and on roro ships are a continuing and significant concern,” says Mr Witte.
“ISU members are often the only agency available to deal with such incidents and have a track record in this specialised field.”
Challenges are expected as the shipping industry turns to alternative fuels and energy storage systems to decarbonise or reduce emissions. “Dealing with casualties that are powered by new types of fuel – LNG, hydrogen and ammonia – will be an increasing focus for the industry,” says Mr Witte.
He also says wreck removal income is important for ISU members as it provides steady work for contractors. These numbers maintain the division of the industry’s income at the typical levels of around 50:50 between emergency response and wreck removal income.
ISU members’ actions also prevent marine pollution by providing a swift response to distressed ships transporting liquid, bulk, containerised and other hazardous cargo. In 2024, ISU members provided services to vessels carrying more than 2.4M tonnes of potential pollutants.
“This shows the great environmental benefit of the salvage industry as well as the benefit of protecting shipowners’ reputations and supporting their environmental, social and governance (ESG) requirements, which are now central to business operations,” says Mr Witte.
Contract changes
The increased number of LOFs is supporting owner and operators’ ESG. In mid-2024, a revised LOF was released, which abolished the old fixed-costs arbitration procedure and introduced a fast-track documents-only (FTDO) procedure.
FTDO will apply in cases where the total security requested is less than US$10M.
According to ISU’s legal advisor Richard Gunn, this brings with it a new set of procedural rules, incorporated into the revised Lloyd’s Standard Arbitration Clauses 2024.
“Either party can nevertheless apply for there to be an oral hearing, for example, if the case is complex, it is expected the arbitrator will allow that,” Mr Gunn says.
“For those cases that proceed down the FTDO route, costs are capped, as are arbitrator’s
fees, and the timetable is expected to be tightly controlled. This should allow for an award earlier than might otherwise be expected where an oral hearing is necessary; equally it may lead to fewer settlements and the parties’ cost exposure is limited.”
Another main change in the new LOF 2024 is a requirement for users to supply certain information about the services, such as pollution prevention, which it is hoped will help demonstrate the ESG benefits of using LOF.
“It is now also a requirement for parties that settle to provide information to Lloyd’s about the settlement, but the practical details of the requirement have yet to be determined,” says Mr Gunn. There is more transparency with all LOF settled awards to be published by the Lloyd’s Salvage Arbitration Branch.
“ISU continues to promote the use of LOF and, while we are realistic about the number of times the contract will be used each year, we hope for an upturn and shall follow developments with the new LOF closely, including the operation of the FTDO,” says Mr Witte.
“ISU is clear and consistent that salvage awards based on Article 13 of the Salvage Convention must remain the cornerstone of the funding of our industry.”
In 2024, there was also progress on standardising wreck removal contracts, with BIMCO completing WreckStage 2024, starting work on revisions to WreckHire and announcing plans to revise the WreckFixed contract.
Revenue in 2024 from operations conducted under contracts other than LOF was US$63.0M, with the average revenue from each non-LOF contract being US$1.2M.
ISU’s statistics are collected from all its members by a third party, which aggregates and analyses them, and they are the only published measure of the state of the salvage sector, although they do not include information from non-ISU members.
