Main Engine Damage

2015

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 Main Engine Damage

Contents
Executive summary 2
Findings 2
Cause of damage 3
Recurring issues 3
Core statistics 3
Introduction 4
Overview 4
Hull & Machinery claims 4
Machinery claims 6
Main engine claims 7
Overview of main engine claims by vessel specifics 7
Overview of main engine claims by engine specifics 8
Damaged parts 9
Cause of damage 10
Maintenance 10
Recurring issues 10
Limited experience 10
Prevention 11
Management 11

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Main Engine Damage

Executive summary
Findings
`` Main engine claims account for 46% of total machinery `` Four-stroke main engines experience 2.5 times more
claims cost with an average claim per vessel of USD claims than two-strokes
545,000. `` Four-strokes in V configuration have an average of 42%
`` The frequency trend for main engine claims is stable higher claims costs than inline configuration.
at 2% of the vessels entered with The Swedish Club `` Bearing failures are the most expensive main engine claim
experiencing main engine damage. categories with an average cost of nearly USD 1.6 million
`` Since 2011, the average cost of main engine damage has per claim. The cost for bearing failures is high due to
decreased from USD 634,000 to USD 545,000 (-14%). consequential damage to crankshafts, etc.
`` Container and dry cargo ships have a disproportionately `` Lubrication failure is still the most expensive cause
large claims cost in relation to fleet entry. of damage.
`` Korean built vessels make up 31% of the club fleet but
amount to only 12% of main engine claims cost. China on
the other hand is over-represented with 30% of the club
entries and 36% of the total main engine claim costs.

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 Main Engine Damage

Cause of damage
`` Contaminated lubrication oil
`` Experts not in attendance at major overhauls
Core statistics: Vessels insured
`` Using contaminated bunkers for Hull & Machinery (H&M)
`` Purifiers not operated as per manufacturers’ instructions 2012-2014:
`` Engine components not overhauled as per manufacturers’
instructions `` Total number of vessel/years: 5,467
`` Crew with insufficient experience/training `` All vessel types and sizes
`` Claims equal to, or more than, USD 10,000 on
Recurring issues 100% basis considered
`` Insufficient planning `` Deductibles included
`` Insufficient experience/training
`` Non-compliance with company procedures Number of machinery claims: 487
`` Procedures which are unclear, not comprehensive enough Number of main engine claims: 118
or have not been implemented Total number of H&M claims: 1051
`` Experts not in attendance at major overhauls
`` Not having adequate follow-up methods after
maintenance work

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Main Engine Damage

Introduction
In 2012, The Swedish Club presented the findings from a Only claims exceeding USD 10,000 or more (deductibles
seven-year study of main engine damage (2005-2011). This included) have been considered. However, it should be borne
report sets out the results of a follow-up study, spanning the in mind that the costs cited understate the true scale of the
three year period 2012-2014. problem, as claims falling below the deductible tend not to
The objectives of this report are to update the analysis be brought to the Club’s attention.
published in 2012; identify new claims trends: and to Other costs that surround a claim such as Loss of
review and reinforce the Club’s Main Engine Damage Loss Hire, cost for closed ports, loss of reputation etc. are not
Prevention Program. The fundamental aim is to reduce the considered in this report.
frequency/severity of main engine damage.

Overview
The Swedish Club provides members with a range of The Swedish Club has always had a proactive policy,
cover, including Protection and Indemnity (P&I); Freight directed at raising awareness of main engine damage and
Demurrage and Defence (FD &D) and Marine & Energy and encouraging manufacturers to respond with new and
Ancillary (Marine) covers. more effective measures for reducing the frequency of
engine damage.

Hull & Machinery claims

The Club’s H&M claims in the 2005-2011 and 2012-2014 machinery claims accounted for 36% of the total H&M
periods are shown in Graphs 3 and 4, respectively. claims costs. In the most recent analysis this proportion
Seven claims categories are represented. It can be seen remained similar at 37%.
that as a proportion, the machinery claims have fallen since In the comparison between total H&M claims cost and
2011. Machinery claims accounted for 50% of H&M claims in vessels entered for H&M by vessel type, container vessels are
the earlier study, decreasing to 46% in the later period. found to be overrepresented and account for 46% of the
In cost terms the proportion of machinery claims remains total cost while accounting for 37% of the fleet. Frequency
almost the same. For the period 2005-2011, the cost of of claims per vessel type is also presented in graph 1.

Graph 1. H&M claims by vessel type, 2012-2014

50% 0.25

40% 0.20
Number of claims per entry

30% 0.15

20% 0.10

10% 0.05

0% 0.00
Bulker Container Dry cargo Roro Tanker Other

Club entry/vessel type Claims entry/vessel type Frequency

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 Main Engine Damage

Graph 2. H&M claims by number, Graph 3. H&M claims by number,

2005-2011 2012-2014

49% 51% 54% 46%

Other H&M claims Machinery Other H&M claims Machinery

Graph 4. H&M claims by cost, Graph 5. H&M claims by cost,

2005-2011, adjusted to 2014’s level 2012-2014

64% 36% 63% 37%

Other H&M claims Machinery Other H&M claims Machinery

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Main Engine Damage

Machinery claims Table 1. Machinery claims, 2012-2014

Average cost Change
Claims Type Number
The Swedish Club experienced 487 machinery claims in the (USD) (%)
2012-2014 period, costing a total of USD 187.6 million.
Main engine 118 545,000 -14%
Main engine damage remains the most expensive
category, contributing 34.3% of total machinery claims cost Aux engine 79 326,000 -7%
(30.4% in the earlier period) and 12.7% (10.9%) of the total Turbocharger 79 335,000 -8%
H&M claims cost. Despite the rise in claims cost share, the
Propulsion* 109 442,000 -37%
average cost of a main engine claim has reduced by 14.0%
compared to the previous survey period. Rudder/Steering
22 321,000 -48%
The average cost of main engine damage between 2005- gear
2011 was almost USD 634,000. The latest survey records 118
Boiler 22 247,000 -22%
main engine claims averaging USD 545,000 which is a 14%
decrease (Table 1). Other** 91 235,000 -21%
TOTAL 487 385,000 -19%

*Propeller, shaft, gearbox etc

**Machinery such as electrical equipment, cranes, cargo gear,
deck equipment

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 Main Engine Damage

Main engine claims

An overview of the main engine claims frequency trend over a 10-year period shows minor fluctuations over the period and
has stabilized to around 0.02 claims per vessel/year (graph 6 below).

Graph 6. Main engine claims and trends, 2005-2014 Overview of main engine
3000 0.03
claims by vessel specifics
Container vessels account for more than
2500 0.03 47% of the total cost of main engine
damage claims but only 37% of the fleet,

Number of claims per entry

2000 0.02
presented in Graph 7. This trend has broad
1500 0.02 similarities with Graph 1 where container
1000 0.01 vessels are also overrepresented. It can
be concluded that container vessels are
500 0.01
therefore particularly exposed to main
0 0.00 engine claims. Conversely, Graph 7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
shows that bulker and tanker vessels are
Club entry Number of claims Frequency
underrepresented in the hierarchy of total
main engine damage claims costs. Dry cargo
vessels have the highest claims per insured
vessel value.
Graph 7. Main engine claims by vessel type, 2012-2014
When comparing the relation between
50% 0.040
number of club entries and claims cost as
well as claim frequency by vessel builder
0.035
40% country, it is shown that Korea, which
0.030
Number of claims per entry

accounts for almost 31% of club entries,

30% 0.025 only shares 12% of the total main engine
0.020 claims cost (Graph 8).
20%
0.015 Conversely China is overrepresented by
a large margin, with almost 30% of club
0.010
10% entries and 36% of the total claim costs
0.005
for all engine types.
0% 0.000
Bulker Container Dry cargo Roro Tanker Other

Claim entry/vessel type Claim cost/vessel type Frequency

Graph 8. Top five: Main engine claims by vessel

builder country, 2012-2014

40% 0.080

35% 0.070

30% 0.060
Number of claims per entry

25% 0.050

20% 0.040

15% 0.030

10% 0.020

5% 0.010

0% 0.000
China Korea Japan Germany Netherlands

Club entry Claim cost Frequency

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Overview of main engine claims by engine specifics

Main engine claims and entry by make of engine is show in Graph 9, represented by the codes A-F. Codes A-C are low speed engine
makes and D-F and ‘Other’ are medium/high. The identity of the manufacturers is available to Club members only, upon request.
The survey shows that despite accounting for over 57% of club entries, engine makers with code A represent only 40% of
main engine claims cost. Codes D and E on the other hand are overrepresented with about 15% club entries in total and over
a third of the total main engine claims costs together. ‘Other’ engine makes have extremely few vessels insured hence the
disproportionate result.

Graph 9. Main engine claims by engine make, 2012-2014

60% 0.080

0.070
50%
0.060

Number of claims per entry

40%
0.050

30% 0.040

0.030
20%
0.020
10%
0.010

0% 0.000
A B C D E F Other

Club entry Claim cost Frequency

Graph 10. Main engine claims by engine Graph 11. Four-stroke-Inline versus V
make, 2012-2014 configuration, 2012-2014

80% 0.045 $800,000

70% 0.040 $700,000

60% 0.035
$600,000
Number of claims per entry

0.030
50%
0.025 $500,000
40%
0.020 $400,000
30%
0.015
$300,000
20% 0.010
$200,000
10% 0.005
0% 0.000 $100,000
Medium/High Slow
$-
Club entry Claim cost Frequency Inline V

Graph 10 shows that vessels entered with The The configuration of medium/high speed engines
Swedish Club for H&M consist mainly of low speed relates to the claim cost. V configured engines
engine vessels. However in terms of claim frequency have a 42% higher average claim cost than inline
it is shown that vessels with medium and high speed as show in Graph 11. The frequency of claims is
engines have a higher claim/entry ratio. approximately the same.

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 Main Engine Damage

Damaged parts Table 2. The seven most common types of

Table 2 focus on the seven most common damaged parts in claims, 2012-2014
the main engine claims category. The tables show numbers
and costs per damaged parts for claims for the 2012-2014 Average cost Change
Damaged parts Number
period. The latest survey shows that bearing damage now (USD) (%)
constitutes the part with the most expensive damage, with Bearing* 4 $1,601,000 110%
an average cost of USD 1.6 million.
Camshaft 13 $1,050,000 -23%
Cylinder/liner 12 $486,627 -18%
Cylinder cover 5 $193,000 na
Fuel Pumps 5 $410,000 na
Piston 6 $528,000 33%
Multiple parts** 15 $509,000 -20%

*Includes crankshaft damage

**Damage where multiple engine parts are involved and the proximate
cause could not be established.

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Main Engine Damage

Cause of damage
`` Contaminated lubrication oil
`` Experts not in attendance at major overhauls
`` Using contaminated bunkers
`` Purifiers not operated as per manufacturers’ instructions
`` Engine components not overhauled as per manufacturers’ instructions
`` Crew with insufficient experience/training

Tables 3 & 4 shows the top three most common causes of damage for the 2005-2011 and 2012-2014 periods respectively.
Incorrect maintenance and/or repairs are the most frequent cause of damage in both periods. With an average cost per claim
of USD 926,000, lubrication failure is still the most expensive cause of damage to the main engine.

Table 3. Top 3 causes of damage by number, Table 4. Top 3 causes of damage by number,
2005-2011 2012-2014

Cause Number Average cost (USD) Cause Number Average cost (USD)

Incorrect maintenance Incorrect maintenance 849,000

33 741,354 17
and/or repairs and/or repairs

Fuel management 27 318,000 Lubrication failure 13 926,000

Lubrication failure 23 1,194,000 Fuel management 342,000

8

Maintenance Limited experience

The latest survey has shown that most main engine Shortage of seafarers with experience has been highlighted
claims are as a direct and indirect result of incorrect before in Club publications, but it is worth repeating.
maintenance. Numerous cases have been noted where This fact emphasizes the importance of monitoring by
damage occurs shortly after the engines have been shore staff. There is a significant risk that officers are
overhauled by ship or shore staff. This emphasizes the being promoted before they have acquired the necessary
importance of correct maintenance. experience for senior command.
It is also important that the maintenance of all engine
Recurring issues components is included in the PMS (Planned Maintenance
`` Insufficient planning. System).
`` Insufficient experience/training.
`` Non-compliance with company procedures.
`` Procedures which are unclear, not comprehensive enough
or have not been implemented.
`` Experts not in attendance at major overhauls.
`` Not having adequate follow-up methods after
maintenance work.

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 Main Engine Damage

Prevention
`` Implement onboard fuel management and fuel system audits.
`` Verify that the various parts, including purifiers are tested for proper function and are operated in accordance with
manufacturers’ recommendations.
`` It is imperative to monitor the quality of the lubrication oil. Samples of lubrication oils should be sent ashore for analysis at
least every three months.
`` During major overhauls it is highly recommended to have experts in attendance.
`` It is important to only use spare parts approved by the engine manufacturer.
`` Invest in employee training.
`` Carry out comprehensive audits and inspections.
`` Replace diaphragm sealings at crank case luboil outlets at recommended intervals.

Management
An in-depth investigation of machinery claims shows that Insufficient reporting and follow up work is a major problem
a great deal of engine damage is related to insufficient at the management stage. It is highly recommended that
management systems. In order to reduce machinery claims a members have a PMS which is approved by a classification
well-implemented and proper management system is important. society and well-implemented both onboard and ashore, with
It is essential that crewmembers have the necessary annual controls put in place by the classification society to
experience to ensure that ordinary daily work and achieve best possible results.
maintenance is performed in accordance with company
procedures. However it is of utmost importance to carry
out comprehensive audits and inspections to prevent
management plans from being compromised.

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 Main Engine Damage

Loss Prevention
The Loss Prevention unit is placed within the Strategic Business Development & Client Relationship department and
provides active loss prevention support, analysis and reports, as well as advice to members.

Lars A. Malm
Director, Strategic Business Development & Client Relationship

Telephone: +46 31 638 427

E-mail: lars.malm@swedishclub.com

Anders Hultman
Loss Prevention Coordinator

Telephone: +46 31 638 426

E-mail: anders.hultman@swedishclub.com

Joakim Enström
Loss Prevention Officer

Telephone: +46 31 638 445

E-mail: joakim.enstrom@swedishclub.com

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Main Engine Damage

Contact
Head Office Gothenburg
Visiting address: Gullbergs Strandgata 6,
411 04 Gothenburg
Postal address: P.O. Box 171,
SE-401 22 Gothenburg, Sweden
Tel: +46 31 638 400, Fax: +46 31 156 711
E-mail: swedish.club@swedishclub.com
Emergency: +46 31 151 328

Piraeus
5th Floor, 87 Akti Miaouli, 185 38 Piraeus, Greece
Tel: +30 211 120 8400, Fax: +30 210 452 5957
E-mail: mail.piraeus@swedishclub.com
Emergency: +30 6944 530 856

Hong Kong
Suite 6306, Central Plaza, 18 Harbour Road,
Wanchai, Hong Kong
Tel: +852 2598 6238, Fax: +852 2845 9203
E-mail: mail.hongkong@swedishclub.com
Emergency: +852 2598 6464

Tokyo
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Kawasaki, Kanagawa 210-0834, Japan
Tel: +81 44 222 0082, Fax: +81 44 222 0145
E-mail: mail.tokyo@swedishclub.com
Emergency: +81 44 222 0082

Oslo
Dyna Brygge 9, Tjuvholmen
N-0252 Oslo, Norway
Tel: +47 9828 1822, Mobile: +47 9058 6725
E-mail: mail.oslo@swedishclub.com
Emergency: +46 31 151 328

London
New London House, 6 London Street
EC3R 7LP, London, UK
PR-Offset, Sweden

Tel: +46 31 638 400, Fax: +46 31 156 711

15105pr1500/E8

E-mail: swedish.club@swedishclub.com
Emergency: +46 31 151 328
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