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Sunday, May 27, 2018

Last-minute Tips for Subchapter M

Maritime Activity Reports, Inc.

May 2, 2018

Credit: Eric Norcross

Credit: Eric Norcross

Countdown to Subchapter M: Last-minute tips for choosing the USCG or TPO/TSMS option ...

Subchapter M will finally be implemented in the tugboat and towing industry in only a few short months. It has taken over ten years to arrive, but the build-up and in some cases, hysteria, can only be compared to the Y2K scare at the end of 1999. During that period, the world said Y2K would cause computer crashes, commerce to end and daily life to come to a crashing halt.

Now, fast forward almost twenty years and enter Subchapter M. The date, July 20, 2018, does not have the same media grabbing headliner impact as 01.01.2000, but it does remain at the forefront of owner/operators, as well as the United States Coast Guard’s (USCG) attention. However, the Subchapter M date can yield the same uneventful Y2K results, if owner/operators have done their due diligence or at least are prepared for a strong finish. To that end, a few last minute planning tips can lead to a better result. Understanding of how the traditional USCG option and the differences offered in the Third-Party Organization (TPO) alternative will impact Subchapter M compliance, in a crowded and growing inspected commercial vessel industry, will make all the difference.

The Coast Guard Option
The USCG option is the traditional method for owners/operators to become compliant with regulations and receive a Certificate of Inspection (COI). The OCMI (Officer in Charge, Marine Inspections) has a dedicated team of inspectors within each local Sector that performs this duty. Historically, the USCG inspection program has dedicated much of their time to the passenger vessel industry for their COI compliance. So, how does that affect the tugboat and towing vessel industry?

The answer comes down to a matter of numbers. The passenger vessel industry has been in the USCG inspection process now for years. The active passenger vessel sector is comprised of over 6,000 inspected vessels in the entire country. In each of those operations, the USCG and owner/operators work collectively to submit and review required documentation, schedule required annual, or more frequent inspections, as well as including dry-dock inspections.

In order to understand the full breadth of the USCG daily inspection responsibilities, let’s use the Port of New York as an example. The Port of New York & New Jersey, alone, will introduce an additional 300-plus tugboats and towing vessels into their COI database and that only includes who they currently anticipate will require COIs. Nationally, the expectation is that a minimum of 5,000 tugboat and towing vessels will require COI’s. That means that additional vessels and operators may still be added to that capacity, but more importantly that means that there will be more competition for scheduling dates and time of the team of inspectors. At this time, there will reportedly be no new USCG OCMI inspectors added to take on the increase in tugboat and towing vessel COI inspections.

Outside of potential scheduling headaches, there remain some cost-savings benefits to the USCG option. The initial year’s user’s fees have been waived but will return following the year one roll-out period. The overall COI inspection process will remain similar to the passenger vessel industry in that towing vessel owner/operators must contact OCMI 90 days in advance to begin the COI process. This process includes document review and other preparatory requirements. Upon completion and meeting of the first requirements, owner/operators may schedule their vessel inspections within 30 days. If you are planning on using the USCG and have not reached out to your local OCMI yet, then stop reading and contact them now.

The feedback from industry and regulators during the bridging period allowed USCG to acknowledge their limited resources and identify other ways to offset the daunting task of increasing their inspected vessel fleet. One of those areas builds upon the Coast Guard’s strong working relationship with owner/operators that have been voluntarily participating in UTV program over the years. The success of that program has provided industry with another path to expedite the COI process.

USCG implemented policy that recognizes those vessels that have a valid UTV decal within three years from the date the towing vessel is required to undergo its initial COI issuance, the decal will be applied as full credit that an initial inspection for certification has occurred, provided a few conditions are met. Those conditions include that if the TPO option is selected, the TPO must have issued TSMS certification to owner/operator of the vessel at least six months before the date the vessel is scheduled for its initial COI issuance. There must be no outstanding major non-conformities and a copy of the report must be submitted to the OCMI with the Application of Inspection (CG-3752) at least 30 days in advance of the scheduled initial COI issuance date. (2) The vessel has successfully completed both a vessel audit and a survey with no major non-conformities. (Refer to USCG CVC Policy letter 17-01 for further guidance.)

The TPO/TSMS Option
Changing course to one of the more insightful and accommodating areas of Subchapter M is the TPO/TSMS (Towing Safety Management System) alternative. The TPO alternative is unique to the tugboat and towing vessel industry and allows owner/operators the flexibility of choosing a TPO to complete their COI. As we covered earlier, this option will be critical to meet the high demand of inspections to meet Sub M compliance. Additionally, it provides owners/operators with the opportunity to select a TPO from traditional classification societies such as ABS, DNV-GL or choose a newer TPO, such as the Towing Vessel Inspection Bureau (TVIB). Owners/operators can make the best business decision that meets their goals, timelines, and more importantly, their budget.

Additionally, Owners/Operators can use an existing safety management system to obtain an initial Certificate of Inspection. Owner/Operator holding valid ISM will be considered compliant to TSMS requirements. Other accepted safety management systems, such as AWO-RCP may also be considered as meeting the TSMS requirements along with objective evidence that the vessel complies with Subchapter M. (Note: As of March 7, 2018, USCG Policy was amended to include 3-year objective evidence in lieu of holding TSMS Certificate for six-month prior to issuance of vessel’s initial COI. [Refer to USCG CVC Policy letter 17-02 (Ch.01) for further guidance.])

The real strength to the TPO/TSMS option is that it is specific to tugboat and towing vessel industry. This means that there is less sharing of resources and time, specifically with the domestic passenger vessel market and competing for limited resources currently available within United States Coast Guard. For Owner/operators that are still debating on their Sub M compliance avenue, the TPO option may be right choice, especially this late in the game. Here are some of the key differences and planning tips to consider.

  • Select a TPO that best meets your needs, including your wallet: Owner/operators should be aware of the benefits to outsource their external audit and vessel surveys through TPOs. There is added flexibility to shop around to use certified auditors and surveyors that meet owners/operators’ needs. The TPO market is filled with both established players such as ABS, DNV-GL, ClassNK America and also newer TPOs, such as TVIB and Meridian Global.
  • Schedule a TSMS External Audit/Vessel Survey: Owners/operators must demonstrate compliance and proficiency to the requirements of the TSMS. This is verified by a TSMS approved Lead Auditor and a Certified vessel surveyor. Certified auditors and surveyors have been vetted and are authorized to work through TPOs. This area provides owner/operators with the greatest tool to meet their compliance needs. The biggest benefit is that due to the pool of certified talent available, there is scheduling and pricing flexibility available to owner/operators and with each day getting closer to July, that becomes invaluable. (Refer to USCG CVC Policy letter 18-01 for further guidance.)

Many owners/operators have done their due diligence and are in good position to make July 20, 2018, just another day of doing business. However, for those still uncertain about selecting the USCG or TPO/TSMS option, there is no time to wait. Remember, there is no wrong choice. The only wrong choice is to not make a decision and move ahead. Consider this your warning: The final countdown to Subchapter M is officially here and you’re running out of time. Choose wisely.


(As published in the May 2018 edition of Marine News)

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