Class societies and their role in shipping

Malcolm Latarche
Malcolm Latarche

22 December 2017

At a point in time when communications with and between ships is so easy that class societies find themselves engaged in both protecting against the vulnerabilities that communication permits and at the same time implementing the possibilities of it with autonomous vessels, it is amusing to think that it was the complete lack of communications that lead to the beginning of the classification societies and their part in shipping.

Like so many of shipping’s institutions, classification has its origins in the coffee houses of 18th century London. It was then that Lloyd’s Register was started from the same coffee shop – Edward Lloyd’s – as the one from which the insurance market, Lloyds of London evolved. That register was for the exclusive use of insurance underwriters. Later, a rival register was started by a group of shipowners and eventually, in 1834, the two merged and formed the independent Society which is today’s Lloyd’s Register of Shipping.

The role of the first registers was to gather information on the condition of merchant ships and their operation so as to allow underwriters to assess the risks of offering insurance to the owner of the ship and those wishing to load cargo on it. At that time there were no flag state bodies concerned with the structural condition of ships or standard of masters, mates and crews nor was there any IMO equivalent laying down international standards, therefore some independent third party endorsement of ships was essential for the underwriters to assess risk.

Lloyd’s rated ships based upon the reputation of the shipbuilder, the current condition of the ship assessed by survey and the reputation of the master who, at that time, was usually both a part owner and likely with a life-long connection with the ship. For many years the master’s name was part of the information recorded in the annual Lloyd’s Register book – something that would be difficult to emulate today.

As the importance of being included in the register grew – the attractiveness of individual ships to insurance underwriters was a major factor in finding employment – shipowners invited the society’s surveyors to witness the construction of ships even in the far flung shipyards of the British empire where new yards had no established reputation. Thus, the idea of a ship being built under survey was born and which continues to this day with the ships class notation including either a cross or star depending upon the class society involved as a symbol of the attendance of a surveyor throughout construction.

Soon after Lloyd’s Register was established, other countries followed suit and the classification society family became international. Most of the major societies now members of IACS (the International Association of Classification Societies) were among the early pioneers.

Classification Societies - A growing role

Over time, all of the societies developed their own rules for the construction of ships and also the requirement for regular surveys to ensure that the ship could maintain its classification status acquired at the date of either delivery from the yard or entry in the society’s register.

The time between the establishment of the first societies and today has been over two centuries of continual development in which new technologies have arrived at an accelerating pace. Wood has been replaced by steel and other materials and sails have given way to first steam and then diesel engines. Today new technologies such as hybrid ships, battery power and fuel cells are at the forefront of development.

For the most part, classification societies have had to assess these new ideas and their effect on shipping safety in order to maintain their role as third party risk assessors. That has meant that their own technical expertise has had to grow at least as fast as the rate at which new materials and technology has been developed.

As a consequence, flag states some of which could not afford to employ specialists and experts themselves have come to rely on the technical expertise of classification societies for providing the information behind the development of new regulation. It is for that reason that much of the technical input into the work of the IMO now emanates from the classification societies, either directly or indirectly through national delegations.

The Class Societies standards must be at least the equivalent of the SOLAS regulations that apply, otherwise their role would be valueless. Each Society has its own particular rules although there is a large amount of commonality between them and for bulk carriers and tankers over 150m in length, there is one set of common structural rules that applies to all members of IACS. These common structural rules only relate to the structure of the vessel and not its machinery or eventual maintenance.

Classification Societies - Serving two masters

The role of class societies as technical advisers to flag states has already been mentioned but this role is often extended to cover the issuance of SOLAS and MARPOL certificates that ships are obliged to carry. All of the surveying that is undertaken for a ship to be accepted into class and to maintain its class is done at the request and expense of the shipowner.

However, ships are also required to carry various certificates under SOLAS and MARPOL regulations and to obtain these the owner must apply to the flag state authorities such as MCA in the UK or the USCG in the US. Very often, the flag state authority will have sub-contracted its surveying and certification roles to Recognised Organisations (ROs) most of which will be classification societies.

To obtain a statutory certificate, the shipowner may find that the ship’s class society is authorised by the flag state and the surveys can be carried out simultaneously with class surveys. Not every flag state will have authorised all class societies to act on its behalf so sometimes a ship may have surveyors from different bodies carrying out very similar surveys at double the expense. Although the statutory certificates often bear a class society’s logos and title, they will show in the small print that the certificate is issued on behalf of the flag state.

Since the advent of the ISM Code requirements in the late 1990s, class societies have become very active in developing and auditing quality management systems. As well as an operators safety management system, the class society may well be involved in the ship and port security Code system and most recently in the monitoring, reporting and verification (MVR) of exhaust emissions.