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Press Release 2020

Press release

Virtual Annual Members' Meeting of the

German Shipowners' Defence Association

held on 29 October 2020

The Association's annual report, as presented by the Chairman of the Board Dr. Kurt Klemme (Reederei Nord GmbH) at the first virtual Members' Meeting, shows a positive result for the 2019 business year. A surplus of EUR 162,227.42 (2018: EUR 156,756.02) was achieved and added to the free reserves. As a result, the free reserves of the Association have reached a new peak. They now stand at approximately EUR 5.97 million and exceed the regulatory requirements substantially.

In the reporting period (2019) claims totalling EUR 14.1 million (previous year: EUR 17.4 million) were either recovered or resisted on behalf of Members.

In accordance with the general trend in the German fleet the number of vessels insured has reduced slightly in the current business year (2020). According to the report of the Managing Director Michael Wester 1,005 ships are currently entered with the Association (October 2019: 1,116 ships) which is a decline of about 10 %. The total tonnage insured has reduced to a similar extent to about 20 million GT (2019: about 22 Million GT). For the current business year a reduced premium income is therefore anticipated.

The number of new disputes is expected to increase in the business year 2020. This outlook is based on the current figure from October 2020 (239 cases) compared to the 205 cases in October 2019. Also, the number of general inquiries which mainly concern the negotiation and evaluation of charter party clauses has increased. While 150 inquiries were handled until October 2019 the number has risen to 181 in October 2020. On the other hand, the number of pending cases from previous years has declined. Against this background it is anticipated that the costs in 2020 will be on a similar level as last year.

Additional expenses were incurred for digitization measures which were required to ensure the smooth operation of the Association for Members in the current Corona environment.

In the light of these developments, a break-even result is expected for the business year 2020.

As anticipated, a focus of Schutzverein's work in the current year is on the topic of bunkers. In view of the new MARPOL regulations and the development of new low-sulphur products an increase in the number of disputes in connection with deficient bunkers had been feared. Fortunately, these fears have not materialised. Whilst deviations from the specification were observed occasionally, the number of new cases concerning this issue is approximately the same as in previous years.

2020 also saw many inquiries regarding sanctions issues which were addressed to the Association. Due to the ever-changing laws and regulations and the large number of countries involved it has become more and more difficult, especially for international shipping and therefore for the Members of the Association, to comply with all applicable requirements.

The main challenges for Members in 2020, however, result from the Corona pandemic. In spring the main issue had been whether contracts have to be fulfilled despite the consequences of the pandemic. Meanwhile, the focus has shifted to problems arising out of positive Corona tests of crew members and in connection with arranging for crew changes. In particular, extremely restrictive measures taken in many ports lead to enormous stress for seafarers who, despite great efforts by shipowners, often have to remain on board for several months longer than scheduled. In many cases, disputes under charter contracts concerned the responsibility for the resulting extra expenses and time losses. This development is, to a large extent, responsible for the increasing number of registered cases in the current year.

In view of the Association’s solid financial foundation, the Meeting of Members decided to leave the premiums for 2021 unchanged. Consequently, the premiums – which range from EUR 440.00 to EUR 1,800.00 per year depending on the vessel's size – have now been steady for 16 years. The same goes for the deductible of 10 % with a minimum of EUR 450.00 and a maximum of EUR 4,000.00. Moreover, it has again been decided to assist those Members whose vessels were laid up in the current business year for at least six months without interruption where no freight/hire was earned and no payment was received under loss of hire insurance. These members will receive, upon application, a reimbursement of 50 % of the annual premium paid for the vessel concerned.

Mr Nicolaus Bunnemann, managing partner Atlantic Lloyd GmbH in Hamburg, and Dr. Martin Harren, managing director of Harren Shipping Group GmbH & Co. KG in Cuxhaven, have been newly elected to the board of directors.

Mrs Martina Peterson of Reederei Hans Peterson & Söhne GmbH & Co. KG, and Mr Peter Harren of High Sea Maritime Investment GmbH & Co. KG have decided not to stand for re-election after having been on the board of directors for 12 years. The members' meeting thanked them for their longstanding commitment.

In view of the consequences of the Corona pandemic the Association was regrettably forced to cancel the Annual Dinner which is traditionally held after the Members' Meeting.