Class Societies

1.0 Introduction

Try to build a house inside city limits in America, and you can anticipate inspections. Round after round of specialists review your work and ensure the house meets codes. Many contractors find this annoying, but we acknowledge the necessity. We need experts to review our work and keep us honest; to ensure that the next owner inherits a good and safe house.

But what about the maritime world? Who inspects the ships? Answer: Class Societies.

2.0 The Problem of Maritime Jurisdiction

The basic problem for maritime inspections is jurisdiction. Most ships operate on the high seas (Figure 2‑1), routinely traveling between different countries. Each State (legalize for country) has their own laws and their own standards for maritime safety. Should a ship constructed in China still comply with the safety standards of the USA?

The answer is a very important and complicated international treaty: the UN Conventional on the Law of the Sea (UNCLOS), which outlines the legal framework for sharing jurisdiction when on the seas.

This article is not a discussion on the legal development of maritime regulations. There are literally entire classes on that subject. Instead, we need to appreciate the practical problems with maritime jurisdiction. The oldest basis for maritime authority is cannons. Naval power. And that holds true today. Because it does no good for a nation to create laws unless you can enforce them. That causes a problem for international treaties. The International Maritime Organization (IMO), our international regulatory body, has no authority. They write the laws, but they have no military to enforce the laws.

Enforcement falls to each maritime State that complies with the IMO. In general, the State writes the IMO regulations into their own maritime laws. But that does not make the State responsible for all ships, just the ones registered to that nation (with some important extensions that I will not cover here). Unfortunately, we cannot trust States to uniformly enforce IMO regulations. Each State has their bias; every State has always worked for their own individual benefit. The average country in the world is not always reliable for enforcing maritime safety. So our maritime industry grapples with a patchwork of inconsistent, constantly changing regulations, just as turbulent as a stormy sea.

3.0 The Solution of Classification Societies

The nations of the world continue to compete, hoping to gain advantage in maritime trade. In the meantime, the businesses of the world need something more consistent. Oddly, it was the insurance industry that brought consistent safety to shipping.

Even back in the 1700’s, shipping was big business. And insurance companies grew tired of losing money to ships sunk at sea. But insurance companies were full of financial experts. To them, all ships looked the same. Even ships that were poorly constructed and unseaworthy. To address this problem, 1764 saw the creation of the first classification society: Lloyd’s Register. A classification society is essentially a group of engineers that review the construction of a ship and determine if it is seaworthy. They are the inspectors of the sea.

Fast forward to current times, and the role of the class society expanded considerably. Some of their more significant duties include:

Review designs and drawings for new ships
Inspect new construction to ensure the vessel matches the design
Inspections of existing vessels to ensure they are well maintained
Research and development to advanced ship science
Review and certification of national regulations
Review and certification of international regulations (IMO)
Provide load line certificates
Provide tonnage admeasurement

In many ways, the class society became the middle-man between the lawmakers and the ship owners. Their primary focus is ship safety and quality ship construction. (Figure 3‑1)

3.1 Do I Need a Class Society?

Almost certainly yes. There are a few exceptions like smaller yachts and smaller commercial vessels. But most commercial ships require a class society to review and class their vessel for the same reason today as back in 1764: insurance. It can be very difficult to get insurance without a class society guaranteeing the quality of the vessel.

In fact, vessel classification becomes a legal requirement for international voyages. The IMO requires that any commercial vessel on an international voyage must obtain class society approval.

4.0 Class Society Practicalities

You may think that getting your ship classed is a standardized task, like buying milk at the grocery store. Incorrect. The process of classification changes with every ship, recognizing that every ship is unique. Approach classification with all the care and stamina of a long business negotiation. They are selling you an engineering service: that of quality assurance. The first task to buying any service: comparison shopping. You can have your pick of many different class societies to work with. (Table 4‑1) I recommend selecting one from the International Association of Class Societies (IACS) and ensure they are accepted by your national regulatory authority.

Evaluate the class society like a long-term contract for engineering support. Once you pick a class society, you are basically married to them for the life of that ship. (You do have the option to reclass a vessel with a different society. But that can be a lengthy and expensive process.) Some factors to consider:

Cost
Ship type (some societies have more experience with different types of vessels)
Office locations
a. This matters for costs of class surveyors.
Time zone for head offic
a. Engineering plans will likely get reviewed at the head office
b. You will need to match their schedule

Once you pick a class society, the actual process varies slightly depending on your ship. But the main classification effort starts with construction of the vessel. The shipyard interfaces with the class society and manages much of that interaction. Once you take possession of the ship and enter service, those duties to maintain class fall onto you.

4.1 Class Society Fees

Class societies are not a free service. You pay fees for each classification service, and those fees vary significantly, depending on the complexity of the ship. form a noticeable part of the ship construction costs. The fees vary wildly, depending on your vessel type. But as a general heuristic estimate, guess 0.5% – 2% for self-propelled ships. For barges, the costs may go as high as 5%, if the barge has a crane or other critical machinery. Sadly, I have no control over class society fees. Class societies are important, but not cheap.

5.1 Matching the Country

I once heard a professional state, “If your ship is built in America, it needs to be classed by the American Bureau of Shipping.” Completely false. For example, the United States Coast Guard (USCG) publishes a list of class societies they accept. All the big societies are on that list. (Table 5‑1) And many of them have the authority to perform USCG duties. Technically, you don’t even need to talk to the USCG. You can just work with the class society. The class society can also handle review and compliance with IMO regulations.

Class societies started as national entities, but the big ones grew to become just as international as the IMO itself.

5.2 Ultimate Authority

Too often, I hear class societies discussed in reverent tones, assuming they are the ultimate authority on ship design. It’s true that senior engineers at class societies tend to be some of the best in the business. But the senior engineers don’t review every drawing and document. These companies fill their ranks with engineers of all skill levels. They provide the same variety of experience and skills that you find in any engineering firm.

Do not be afraid to question your class society. Object to unreasonable demands. Evaluate their performance like any other service provider. Did you get good value for the cost? Are you happy with their response time? Do they demonstrate sufficient experience with your specific type of vessel? Ultimately, it will be your ship. The class society needs to live up to your standards, not just their own.

5.3 Trusting Only the Class Society

Although class societies provide critical quality control, do not believe they are the only quality control necessary for a successful ship. We don’t have a rigorous, regimented system of review and approval in ship design. Since every ship is custom, quality control really happens by way of committee. Most components of the ship get reviewed by 3 – 6 different parties, each with their own biases.

Designer: They created the design. They want to balance all the competing interests.
National regulator: They are interested in the ship as a safety mechanism, like a seatbelt. It needs to protect life of the crew and passengers and protect the environment. But priorities change, depending on the nation.
Class society: They want to ensure the highest quality for the ship. Sometimes this can lead to overbuilt components.
Shipyard: They want a good ship that can be constructed efficiently for the lowest cost.
Owner’s representative: They want to ensure the highest value for the owner. This may mean high quality, but it also means finding lower cost substitutes when quality shows no difference.
Vessel operator: They want the best convenience from the ship. The best living and working experience.

This combination of people all working together completes the quality control for the ship. Class societies lead that effort, but the rest of us complete it.

6.0 Conclusion

Class societies are not perfect, but they are absolutely necessary. The maritime world presents a fractured landscape of national and international regulations. Amidst that confusion, we need organizations whose primary motivation lies solely in the quality of the ship, and not with national interests. Despite this necessity, a class society works best when we remember that they are not perfect. They have their own faults, and we need to balance that with respectful resistance so that we keep everyone focused on what makes a good ship: convenience, value, cost, quality, safety, and balance. Taken together, these priorities create a fine seaworthy ship.

7.0 References

[1]	M. Stopford, Maritime Economics, New York, NY: Taylor & Francis, 2009.
[2]	T. L. Y. Lam-Bee GOH, “A Way Forward for Ship Classification and Technical Services,” The Asian Journal of Shipping and Logistics, vol. 30, no. 1, pp. 051-075, April 2014.
[3]	Lloyds List, “The Classification Societies Top 10,” Lloyds List, Dec 2015. . Available: https://icsclass.org/wp-content/uploads/2015/12/Lloyd-List-Top-10-The-Classification-Societies-2015.pdf. .
[4]	Office of Comercial Vessel Compliance, “List of Class Society Authorizations,” United States Coast Guard, 14 Sep 2020. . Available: https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/5ps/Alternate%20Compliance%20Program/ClassSocietyAuths.pdf?ver=2017-10-18-091452-957. .
[5]	Nonprofit Explorer, Research Tax-Exempt Organizations, “Form 990, Return of Organization Exempt from Income Tax,” Propublica, 31 Dec 2018. . Available: https://projects.propublica.org/nonprofits/organizations/134921556/201943189349304649/full. .
[6]	Wikipedia Authors, “HMAS Derwent (DE 49) QF 4.5-inch Mk I – V naval gun, Rockingham Naval Memorial Park, March 2020 06,” Wikimedia Commons, 14 Mar 2020. . Available: https://commons.wikimedia.org/wiki/File:HMAS_Derwent_(DE_49)_QF_4.5-inch_Mk_I_%E2%80%93_V_naval_gun,_Rockingham_Naval_Memorial_Park,_March_2020_06.jpg. .
[7]	United States Department of State, “Law of the Sea Convention,” US Department of State, 7 Mar 2019. . Available: https://www.state.gov/law-of-the-sea-convention/. .
[8]	Wikipedia Authors, “Money-1428594 1920.jpg,” Wikimedia Commons, 23 Jun 2012. . Available: https://commons.wikimedia.org/wiki/File:Money-1428594_1920.jpg. .

Class Societies

1.0 Introduction

2.0 The Problem of Maritime Jurisdiction

3.0 The Solution of Classification Societies

3.1 Do I Need a Class Society?

4.0 Class Society Practicalities

4.1 Class Society Fees

5.1 Matching the Country

5.2 Ultimate Authority

5.3 Trusting Only the Class Society

6.0 Conclusion

7.0 References

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