Bureau Veritas Tackles High Public, Customer Expectations

By Martin Edwin Andersen

Philippe Donche-Gay, Executive Vice President and Head of the Marine & Offshore Division of Bureau Veritas, discussed with veteran journalist Martin Edwin Andersen some of the fundamental challenges classification societies face in this second decade of the 21^st century and BV’s own strategies to stay ahead of the game. Here are excerpts from that exchange:

Andersen: Concerning the expanding role of classification societies, what do you think are the greatest challenges going forward?

Donche-Gay: There is one big challenge which is at the heart of everything we do, and that is to help the shipping and offshore industries meet increasingly high public expectations of safety and environmental performance. At one level that means using our expertise to advise governments and international bodies so that they regulate in a sensible and achievable way. At the other we have to help shipowners and offshore operators comply with regulations and maintain standards so that they can operate and develop new projects with confidence.

Andersen: Okay, what’s the bottom-line?

Donche-Gay: The good news is we are succeeding, and quickly. Confidence came back into shipping during 2013. And confidence stayed strong in the offshore sector. That confidence produced a surge of new orders and projects, all seeking to take advantage of the improving global economy. Timing was crucial. That is why Bureau Veritas focused on delivering quality quickly.

Shipowners, shipyards and offshore operators come to Bureau Veritas because they want peace of mind that their projects will work and be safe. They don’t want any corners cut. They want the highest technology and the most rigorous scrutiny. But they also want their projects to move along quickly.

That’s why we have been introducing lean management techniques into our service delivery. Lean management means learning lessons from other industries and reducing cycle time to process documents and verify projects by bearing down on the details of how we do everything.

Andersen: Many would argue that the competitiveness model of class societies has changed over the past few years in an effort to retain and expand market share. How has BV worked to anticipate those challenges?

Donche-Gay: Bureau Veritas welcomes competition and sees it as a key driver of higher standards and better service. Of all the organizations providing classification services, BV has grown by far the fastest and is today by a big margin the largest in the world. We can show a steady annual growth of more than 12 percent every year for the group going back 15 years.

So we are more than five times the size we were in 1998. That is no accident. It is because we identify with the needs of our clients and focus on service while investing in and maintaining technical leadership. We have not changed the formula in recent years. We simply enhanced it by (1) adding services which help owners and operators save money and (2) introducing lean management to speed our own processes.

Andersen: What is the single biggest challenge faced by the industry in the next decade?

Donche-Gay: That public expectations will drive a process of unrealistic regulation that runs ahead of technology. We are already seeing that with ballast water management requirements, which are a mess of different international and local standards and which, in turn, create uncertainty for shipowners.

Andersen: Technology appears more important than ever. How much does BV spend each year on research and development?

Donche-Gay: BV’s Marine & Offshore division has very strong focus on research and development, especially through cooperative projects with universities and industry groups. We spend around eight percent of our revenue in this area and have increased that recently with a commitment to a Deepwater Technology Research Center in Singapore, a research center in Rio, and cooperation with over twenty universities and institutes globally. Work on ice loads, for example, with the State Maritime University of St. Petersburg, was instrumental in BV’s winning major contracts to class innovative LNG carriers for service in the high Arctic.

We believe we are the world leaders in hydrodynamics and CFD (computational fluid dynamics) and its marine applications. We know we are the only class society that applies that knowledge, for example, to make whipping and springing analysis compulsory for ultra-large containerships. BV can make that mandatory and carry out the necessary analysis quickly because of the power and speed of its HOMER hydrodynamic software.

Bureau Veritas’ groundbreaking research into hydrodynamics was recognized by the industry in 2013 with the 2013 CEMT Award to BV’s hydrodynamic research team. The award, presented by the Confederation of European Maritime Technology Societies, is for research that makes a significant and valuable contribution to the European maritime industry.

Andersen: In terms of formalized ways of doing risk assessments, what is unique about BV’s approach?

Donche-Gay: Risk assessment is at the heart of everything we do. We cover a very wide spectrum of industries, so can share risk assessment expertise across industry frontiers. That is one reason why we have been chosen to provide risk assessment for a large number of offshore projects globally as our expertise (proven in safety case verification in the North Sea) is sought voluntarily by offshore operators globally.

In shipping we used these techniques to class the first passenger ship built anywhere to Safe Return to Port Rules, and that experience was key to us winning the contract to class the 54,000gt, 740-passenger ultra-luxury Seven Seas Explorer. It will be built at Fincantieri’s Genoa facility for 2016 delivery. The key deciding factor for Regent Seven Seas in entrusting the very high-end project to Bureau Veritas was our experience with the new Safe Return to Port requirements, and that in the end comes down to risk assessment.

Bureau Veritas recently carried out a major risk analysis for passenger ferry operator Brittany Ferries. That led to a decision by Brittany to switch its fleet to LNG propulsion. A new LNG-powered ferry has been ordered to BV class at STX France. The 24.5 knot ship will be one of the largest LNG-powered ro-paxes yet with a passenger capacity of 2,475 and space for 800 cars. It will utilize membrane tank technology for the gas containment, making it the first vessel to store LNG at normal pressure instead of high pressure. Four existing ferries in the fleet will be converted to gas propulsion under Bureau Veritas supervision.

Andersen: What is BV doing to speed the verification criteria for new technology?

Donche-Gay: A key reason why Bureau Veritas is one of the big three class societies in the offshore field is our ability to apply risk assessment techniques to new technology. We were the first to class dual-fuel engines for gas carriers and the first to class LNG-RV vessels that can regasify. Most of these vessels currently in service and a majority of the FLNG projects going forward are BV-classed or BV-verified. That is because we can look at new technology and verify its acceptability, and we can do that quickly and give the client confidence without holding up the project.

Andersen: Where is BV on the increasing use of formal safety assessments for design issues?

Donche-Gay: In the North Sea Bureau Veritas provides project, capex and operational verification services for fifteen major clients with a wide range of platforms and floating units under operation and development. The experience gained there with safety case verification is in demand globally as the safety case system is being adopted more and more in other offshore oil areas.

Andersen: Two of your competitors, DNV and GL, merged last year. How has this affected the playing field?

Donche-Gay: We see consolidation as both natural and desirable in global industries. TIC (testing, inspection and certification) companies like BV and the newly merged DNV GL need scale to be able to respond quickly to clients globally. We think that consolidation will continue and if this market follows all others, which it surely will, the midsize players will be squeezed.

As we are very much the largest and financially strongest group in the business, we have not seen any great change following the merger. But we welcome the presence of the merged company in the class and offshore markets. They do not have the global scale or reach of BV, but they will help spur further competition and so drive up standards for clients.

Andersen: Last year the Maritime Labour Convention of 2006 went into effect. How is it working?

Donche-Gay: Implementation of the MLC requirements was a big job for the ships-in-service teams of BV. Bureau Veritas had trained and deployed 264 MLC inspectors globally, and in the early part of 2013 it built a Web-based system to help owners with large fleets of sister ships achieve certification more easily. In the end, over 6,000 MLC certifications were issued, peaking at 1,600 during the month of August when implementation was due. No ship was delayed, and cooperation with flag states was excellent. We think it is working better than we expected.

Andersen: To what extent is the convention basically the old ILO requirements in a new package?

Donche-Gay: There are key new requirements and a different philosophy that in future years will help ensure ships are better built and maintained for crew safety and comfort. We very much agree with that.

Andersen: Has there been any confusion between flag states and port states in terms of compliance and enforcement?

Donche-Gay: New conventions always require some working through, but we feel the MLC implementation went very well. – MarEx