Roose & Partners notes implications of Ardent withdrawal from salvage

The decision by Ardent Global Marine Services to stop undertaking salvage operations from May 2020 will leave Boskalis and their subsidiary Smit as the largest operator and provider of marine salvage assistance and expertise in the world, legal firm Roose & Partners has observed.

There is a statutory requirement under the OPA90 program that requires shipowners trading in US waters to have an agreement in place with approved emergency response companies for the provision of salvage and marine firefighting services.

The firm said that it perhaps demonstrated the complexities in maintaining a salvage capability these days. It noted that it had reported on the continued reduction in the use of the LOF salvage contract and declines in salvage work with shipowners and notably their insurers taking advantage of this when negotiating terms of assistance. “The upper hand has definitely been with the owners and insurers who have been able to take advantage of the fact that salvage companies, desperate to secure work, were willing to work on very ‘flexible’ terms”, the firm said.

Ardent formed in 2015 following a merger of Svitzer Salvage, which was part of the Maersk Group, and Titan Salvage, part of the US Crowley Group. The aim was to become the largest salvage provider in the world but a challenging and highly competitive market has taken its toll.

Ardent’s US operation, Ardent Americas LLC, was purchased by Royal Boskalis Westminster N.V. (Boskalis) earlier this year, of which salvage giant Smit is a subsidiary, significantly increasing Boskalis’ operation in the US and its OPA90 provision, with Ardent Americas having approximately 4,000 vessels as their OPA90 provider.

Roose & partners said that the loss of Ardent as an alternative provider of salvage assistance would certainly raise some concern amongst property and liability insurers regarding diminished competition and a reduction in available expertise to provide salvage services.

“What will happen when the next large casualty arrives? There is little doubt that the various Smit companies will see a benefit although other salvage companies will also be there to pick up the pieces, notably T&T Salvage and Resolve Marine as well as the Greek operators, Tsavliris and Five Oceans Salvage.”

The firm said that the upper hand in salvage negotiations could well have shifted back to the salvors, at least for the time being.