Insights: Pat Folan, Tug & Barge Solutions

Maritime Activity Reports, Inc.

March 22, 2018

Pat Folan, Partner, Tug & Barge Solutions

Pat Folan, Partner, Tug & Barge Solutions

Pat Folan, a partner at Tug & Barge Solutions, weighs in on all things tugboat – with a focus on Subchapter M.

Pat Folan is a partner in Daphne, Ala.-based Tug & Barge Solutions, a company that focuses on Subchapter M compliance for towing companies. The company also performs surveys of towing vessels and barges, manages safety management systems for towing companies and trains people on towing vessels and in offices. A professional mariner, he has operated towing vessels from Maine to Corpus Christi, Texas, including the Alabama Rivers, Lower Mississippi, Great Lakes and Erie Canal. A graduate of St. Bonaventure University, he began his career in towing in Boston in 1985 on a wooden single-screw tug, eventually owning a towing company that specialized in Erie Canal towing. He holds a Master of Towing Vessels for Near Coastal, Inland and Western Rivers. He was a member of the USCG’s Towing Safety Advisory Committee (TSAC) and a sub-committee chair for the Steel Hull Repair and Operational Stability tasks. A certified ISO 9001:2008 Lead Auditor, ISO 19011:2011 Internal Auditor, ISM Internal Auditor, USCG-approved Designated 
Examiner and a SAMS Accredited Marine Surveyor, Pat is well known, and widely regarded as one of industry’s most knowledgeable and experienced subject matter experts. This month – with a focus on the so-called Subchapter M rules, he shares that knowledge with Marine News readers, weighing in on all things “tugboat.”
 
On June 20, 2016 the U.S. Coast Guard published in the Federal Register new towing vessel regulations that establish requirements for the design, construction, on-board equipment, and operation of U.S. towing vessels. Where are we on the deadline/implementation timeline? 
The short, easy answer is all towing vessels that fall under Sub M will have to be in compliance by July 20, 2018. The tougher part of the deadlines is the Certificate of Inspection (COI) in 2019 for multi-vessel companies. Many smaller companies have not thought about the TSMS certificate deadline prior to the COI or the vessels stretching past 2019. And, it’s worse still for the one boat companies – July 2020 is coming fast and many of the one boat companies that I speak with have not considered their options.
 
The regulations were considered and developed by the Towing Safety Advisory Committee (TSAC) with input from the commercial towing vessel industry. In fact, industry pushed for the rules to be passed and implemented. Is industry in general happy with what they got? 
Generally, yes. But the devil is in the details. It appears that Third Part Organizations (TPO) will err on the side of caution because they don’t want to miss something that the USCG catches so they are looking deep and most people, companies and vessels aren’t ready for this type of scrutiny. When you have been operating a vessel that was never built to a standard, in a segment of the industry like dredging, and soon you will be inspected as if you were carrying nuclear warheads, your world is turned upside down. The TPOs and USCG will have to apply common sense and understanding and the operators will have to up their game. It’ll be an interesting decade.
 
The Coast Guard recently listed the approved list of 8 Third Party Organizations. You and your firm are not among them. Given your experience and background in this sector, why is that?
Tug & Barge Solutions decided early on that we wanted to try to help small companies make it through Sub M. The partners all have come from small towing companies and we feel that our strength lies in our decades of towing vessel experience and understanding of the pressures on these companies and their personnel. We are unique in that two of the three of us are licensed mariners and two of the partners still operate a towing company. We are able to work with a large number of companies, vessels and crews to help them achieve compliance. We also get to help to help the mariners achieve higher levels of safety and that’s rewarding.
 
Do the operators who have been longtime AWO RCP members have a leg up when it comes to SubM compliance on those who did not belong? If so, why?
Only the ones that have taken the RCP and made it their own. Quite a few companies have the RCP and can pass the audits but don’t truly live it. Our interaction with the TPO for Ivy Marine’s TSMS Certification Audit was for more detailed than the previous RCP audits that we had been through. And that’s in no way meant to disparage AWO RCP. The RCP brought the industry to where we are today. Prior to the AWO RCP, it was the ‘wild west.’
 
In terms of equipment, is any aspect of the rules proving to be especially expensive? If so, tell us which one and why.
Section 143.225 requires that the operator monitor and control the amount of thrust. The USCG is looking for a shaft tach, why? The TPOs are saying the same, why? It shows the ‘disconnect’ between industry and regulators. As a tug captain, I monitored the thrust by the tach, throttle and visual means. Running a boat is as much about feel as anything. I knew that if I pushed the throttle control ahead a bit, what the boat would do. I could see the RPMs if I had to and most importantly I could look out the window and see what was happening. I could feel what the boat was doing, how it was reacting. What does a shaft tach do for me? It will show a different reading from the engine tach, but it won’t matter. It won’t make the vessel operations safer. Just more equipment and wiring mandated by someone who has never run a boat.
 
143.230 requires alarms. A lot of the older boats don’t have the alarms and retrofitting will cost time and money. Most of the small older boats I walk on do not have low hydraulic level alarms. I guess it’s nice to know when the hydraulic fluid leaks out but you’re going to find out immediately anyway. The alarm will just be an annoying sound as you realize the steering isn’t working.
 
143.250 (d) requires that any piping that penetrates the hull below the waterline be fitted with an accessible valve as close to the hull penetration as is practicable. Why would the keel coolers need this? By the time you realize you have a hole in the keel cooler it’s too late to prevent the coolant from running out. In a worst-case scenario if you rip the cooler off, what’s the valve going to do?
 
143.400 (b) requires that installed electrical power sources must be capable of carrying the electrical load of the vessel under normal operating conditions. This is being interpreted as requiring a load analysis by TPOs. This is causing the small operators heartburn.
 
Steel work: this may be the toughest part of Sub M. Most operators have no idea what their vessels were originally built with. If you just take the bottom and side plates, what was the original thickness? If you don’t know that, how can the USCG or TPO gauge the wastage. Will the current gauging become the new baseline? This is where I hope that common sense comes into play. We tried to tackle that with TSAC Task 13-07. The USCG accepted the report, but still hasn’t issued much guidance.
 
You’ve talked about the need leadership and change of culture on inland waterways in order to make the implementation of Subchapter M really work. What will this entail and are we any closer to getting that done?
I see a small change in the attitudes of crew members on board. The reality of the law with the looming deadlines is forcing captains to re-evaluate their attitudes. It’s not a sea change yet, but it is happening. Oddly enough, when we roll out HelmCONNECT software with the company TSMS we see a better performance rate with recordkeeping than we ever saw on paper. It doesn’t complicate their lives and they can do the required “paperwork” quickly. It’s the one case where the cell phone or tablet onboard has helped. My disappointment has been in management. I see companies where management is not fully behind the TSMS and that makes it tough. Fortunately, the crew members recognize the importance of it and are stepping up.
 
Do you see more consolidation for the inland marine business in the near future? If so, what’s driving that? Is it low freight rates, Subchapter M, something else or a combination of all of the above?
I think Sub M will drive some of the consolidation. Products will still have to be moved, harbors dredged, and docks built. The small guy who is struggling with Sub M may find that their operation is ripe for acquisition. 
 
What keeps you up at night? What can be done about it?
One thing I think a lot about is the way this law will stifle small towing vessel company growth. It will be very hard for someone to buy a tug and jump into business. A SubM ready vessel will be very expensive and before you can turn the wheel you have to have the TSMS in place and certified and the COI for the vessel. Sub M will change the face of our industry.
 
In the cargo survey/marine consulting business, it is difficult to represent ship owners and cargo interests without eventually developing a conflict of interest. Would you say that the Sub M audit and implementation game is a good analogy? Can you both implement TSMS systems and perform audits as well?
We had to structure Tug & Barge Solutions so that the implementation and audits are separate. We have enough employees so that the TSMS writer is not the auditor of it, nor are the field personnel who are implementing it. We feel that our service is particularly helpful for the small operators who don’t have the resources and/or ability to put a TSMS together, roll it out and then audit it and the vessels. The different set of eyes that our auditors offer the customer, also work for us. They help us continually improve the TSMS and related services.
 
46 CFR Subchapter M applies to all U.S. towing vessels 26 feet in length or more and U.S. towing vessels less than 26 feet moving barges carrying oil or hazardous material in bulk. All told, the rule impacted as many as 5,000 vessels. Some stakeholders predicted that the rule would drive some operators out of business. Has that happened to any great degree? 
Yes. I know of a few companies that have already thrown in the towel and see more that will not come through Sub M. As a business that is centered on helping the small operator, it is tough to walk into a company and see that they can’t make it. But there are companies that have never invested in their equipment or people and they only drag the rest of us down. The herd will be culled.
 
The SubM rule was implemented, in part, because the Coast Guard and government research showed that towing vessels account for a significant percentage of all vessels involved in collisions, allusions, groundings, commercial mariner deaths and injuries, and as much as one-third of discharge incidents greater than 100 gallons into navigable waters (2010 – 2014). Many of these operators were AWO Responsible Carrier Program (RCP) members to begin with. What difference, then, will SubM make?
There will be no difference overnight, but over time I believe we will get better. Unfortunately, cell phones won’t help. We speak a lot about distracted operations at the captain’s level but it is far worse at the deck level. We are too connected to the world and every little problem at home (or aboard) is magnified by social media. The average attention span is 8.25 seconds. That’s .75 seconds less than a goldfish’s attention span. So, as we develop policies and procedures we must take this into account. Training sessions must work with this, too. And some aspects of the job require acute attention to detail. Especially when it comes to drills. The other part of this is the arrival of ‘millennials’ in the workforce. They are not motivated by the same things that the boomers were. A 2015 Gallup poll found that only 28.9 percent of them are engaged at work. They look for more collaboration, frequent, open communication and do not like structured hierarchies. That’s not our industry. Both sides will have to change to make it work, but without the structured hierarchy, the boats wouldn’t function. And Sub M mandates the master’s responsibility and Authority. The things that made the industry appealing for me (personal challenges, rising through Master to tug ownership, navigational and vessel operations) don’t seem to work with the millennials. But, we’ll get past all the issues and I think become a safer, more efficient industry.
 
U.S. towing vessels have two options when it comes to being inspected for compliance with Subchapter M regulations. They can create – or enlist help in doing so – a Towing Safety Management System Option (TSMS). Or, they can go through the Coast Guard Inspection Option. This option may be seen as the most cost-effective option, but will it provide the same level of compliance as the TSMS option? What do you see as the best path?
We believe that the TSMS option is the only path to achieving higher levels of safety on the boats. The USCG option is the low bar – they only care about checking the boxes related to the condition of equipment. It’ll be no different than tank barge inspections. Safety factors in tangentially because you need to have life rings in good condition, but they are not looking at the underlying safety program within a company. The USCG requires a Health and Safety Plan but they have given no guidance on how it will be audited and how they will audit the required Sub M records. TSAC was against this option because it doesn’t enhance safety and we take the same position.
 
Does the coast Guard have the resources to attend and inspect every vessel if all ~5,000 of these vessels opted for the USCG option?
I think that remains to be seen. I know of two companies that will use the USCG option and the USCG is asking everyone what option they will choose in order to plan for the future. But they are not getting any additional resources and they seem to be in the dark about many parts of Sub M. They lag behind the TPOs because they do not understand our industry. Their marine experience is on government-maintained vessels that do not perform the functions of our industry. Couple that with the fact that most people in our industry do not want them on their vessels, they are bringing up the rear. And they are the enforcers. The TPOs are being exposed to the oddities on our vessels. Companies engage them and pay them for advice. I think for most TPO auditors, the small towing company vessels are a shock to them. If you spent your life around classed vessels or petroleum transportation, then the boat that’s moving rocks will look different. But at least they are getting the experience.
 
Typically, classification societies are recognized and/or authorized meet the requirements of a TPO. These classification societies are approved by regulation to perform certain work as a TPO without further Coast Guard approval. Organizations other than recognized and/or authorized classification societies that conduct TPO functions for towing vessels must be Coast Guard approved. What does that entail?
Because we chose not to pursue that route, I don’t really know. But we are looking at all the class societies and TPOs to see how they operate and how they fit within the industry. We have customers spread across the towing spectrum, from Boston Marine Transportation that goes through multiple SIRE inspections per year to Holden Marine Towing that works in the dredge world and has never had a third-party audit. The management, vessels and crews are very different at each company and our goal is to evaluate all the TPOs to find the right fit for each. Class surveyors worry me because they are used to looking at inspected vessels, built to a standard and crewed by mariners that are part of the ISM culture. What will they do when they hop on a towboat built in a yard in the bayou from sketches on a bar napkin? The same holds true for the TPOs. They all probably can audit, but can they understand the industry? Will they apply common sense, or will it be black and white? Hopefully, common sense prevails because the regulation isn’t black and white.
 
One of the big complaints that the inland (and workboat) industry has with today’s regulatory environment is that often – but not always – regulations made for blue water are pushed down onto the so-called brown water industry, without regard for whether they actually fit. Has the Coast Guard gotten better over time with these sorts of decisions?
I see problems both ways. Not enough coastal companies were involved in the rulemaking, so we had a lot of brown water input into SubM. The USCG then took their knowledge of blue water and stuck it in there. I think there will be many appeals and hopefully TSAC will be tasked in the future with refining the regulation.
 
 
(As published in the March 2018 edition of Marine News)
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