Nautilus member TOM JACKMAN lifts the lid on superyacht safety – revealing how a hidden fleet of poorly-maintained and ageing vessels is creating unsafe conditions for those onboard
When most people think of superyachts, they think of the super-rich, living an Instagram lifestyle aboard luxurious splendour. But for those who have an insight into what is actually going on aboard these superyachts, opinions may vastly differ.
Many of these multi-million-dollar assets are getting old and some of them dangerously so. That is because their owners have scrimped on vital upkeep costs and some of whom don’t even know it. The fact is when the money is cut off from any seagoing vessel, the level of safety deteriorates.
Crew regularly share horror stories of superyacht conditions and claim a lack of money spent on maintenance and repairs is making them unsafe. With more and more of these ageing assets reaching 20-years plus it is vital to ensure adequate finance is available for both operation and maintenance.
Is it only a matter of time before a major catastrophe ensues? Potentially with some high-profile celebrity onboard, or worse still multiple fatalities.
In this article we shall be highlighting the issues with superyacht safety that is, ironically, compromised due to a lack of money being made available to maintain these assets.
Is it only a matter of time before a major catastrophe ensues? Potentially with some high-profile celebrity onboard, or worse still multiple fatalities
First a bit of history of shipping, safety and money. In the late 1800s Samuel Plimsoll devoted his time campaigning to saving seafarers' lives. For those who have no idea why there is a load line on the hull - it is the first regulatory breakthrough in saving lives at sea by preventing ships leaving port in an unsafe overloaded condition. Overloading ships with cargo caused the loss of many vessels and unnecessary deaths of crew. Why did this happen? The answer - money. The more cargo on the ship, the more money the owner could make. The ships that sank were often over-insured so the owner did not care if the ship was never seen again as chances were, they would make money form the insurance claim. Crew who refused to step on board a ‘coffin ship’ as they were called, could be sent to jail for breaching their employment contract. It’s a cruel and dangerous life at sea when everything is money orientated.
In the 1980s and 1990s economic factors affecting the shipping industry led to less money being available for the charter of ships. Ship owners therefore had less money to spend on the maintenance of their vessels. Reduction in maintenance led to unsafe ships and then an increased loss of ships. It got so bad action was taken in the form of The International Safety Management (ISM) Code. For years the ISM Code, its implementation and misinterpretation has been another topic for discussion with superyacht safety – but the reason for the ISM Code stems back to owners not spending money on their vessels resulting in reduced levels of safety.
Today it may feel that yachting, safety and money should have no relation to the campaigns in the late 1800s and 1900s where safety was sacrificed for money. After all, the superyacht industry was borne and should exist from the fact there are ultra-high net-worth individuals (UHNWIs) who can afford to own a superyacht. Surely, we should expect every superyacht to be kept in the most immaculate condition, maintenance up to date and all equipment in good working order? Unfortunately, all too often, that is not the case because an increasing number of owners can’t afford their yachts.
Why is this happening?
A superyacht build is typically commissioned by an UHNWI who has enough money (or access to enough money) to see it through - with no expense spared. This owner will often sell the yacht within three to five years to a new owner who also sells within three to five years - and so on. The older the yacht the more it will cost to keep in a safe and operational condition and the more it will cost to maintain a high cosmetic standard. The yacht’s value is also in most cases depreciating. Each owner is likely to have less money to spend on the yacht than the previous owner. We now have a situation like in the 1980’s when less money is available to spend on maintenance and therefore can expect standards of safety to become affected.
Most yacht owners understand one thing very well – money. The reason they can afford to buy a superyacht is because they have made money. With a superyacht there usually ends up with some sort of financial management to attempt to control the costs – or rather cut costs.
This creates a position where someone in the management chain tries to save money. Yacht captains complain that there are often people involved with the yacht’s finances that have little or no appreciation of what they oversee. Decisions are made based purely on cost due to financial constraints. This is dangerous.
A Yacht Broker once said on a TV documentary 'if you need to ask the price you can't afford it', referencing a superyacht for sale at an industry show. Although this is a great statement there is hardly anyone who would consider buying a yacht without first asking the price. What is more important than the one-off purchase cost is the operating costs. “You have no right to own a yacht if you ask that question” was the response by J.P. Morgan (one of the original superyacht owners) to the question; “How much does it cost to run a yacht?” Those of us in the industry know that ‘10% of the purchase price’ is often a ridiculous method to estimate an annual budget for a superyacht. The purchase cost of a yacht has nothing to do with the operational cost unless by chance the operating cost does equal 10% of the purchase cost. Budgets are required for commercial operations and yachts that claim to be commercial should operate to make a profit by charging enough money and not by cutting costs. Private yachts should have unlimited funding.
Deep in the underbelly of the glossy and luxurious superyacht industry there is a growing fleet of overlooked and ageing yachts that are suffering with owners that cannot afford to maintain them. Other yachts are lacking funds due to faults in the management chain. It’s only a matter of time before incidents on superyachts increase and the catalyst is money. Whichever yacht you are involved in, whatever your position, do not accept ‘there is no money available’ for an excuse when it comes to spending on safety or maintenance costs.
Further reading: Grand Ambition (an extraordinary yacht, the people who built it, and the millionaire who can’t really afford it) by G. Bruce Knecht.