The Evolution of Classification Societies
Lloyd’s original Coffee House is reliably known to have been opened by Mr. Edward Lloyd on Tower Street in London in 1686 and became a centre for shipping news and intrigue. As time went by and as foreign trade grew, the exchanges matured into basic ship broking and insurance transactions but also the first vessel registers and assessments of vessel quality. From 1768 the Society used the designation a1 to indicate a ship of the highest class.
The coffee shop relocated to Lombard Street in 1691 and the first Lloyds News was published to provide shipping schedules and news of insurance agreements. The paper evolved into Lloyds List in 1734 but it was not until 1774 that business outgrew the coffee house and relocated to the Royal Exchange on Cornhill under the name Society of Lloyds.
What is sometimes lost is the fact that the original purpose of Class was not really to assess safety or seaworthiness of the ship but to make money by evaluating insurance risk. Marine insurance underwriting essentially started as a game of bets. Underwriters would agree to insure different vessels & voyages based on their objective assessment of the risk of a loss (conversely – the chance of it safely reaching its destination). If the ship safely executed the voyage, the underwriter benefited by collecting premiums and suffering no claim. If the ship was lost at sea, the underwriter was the loser and paid out the value of the vessel. Thus, an independent rating system of ship quality was developed to help underwriters place their bets. From 1775 A1 was designed and is now famous as a symbol of quality.
While London may have been the centre of world shipping, the need for the services provided by the Society of Lloyds was of course far more widespread. The Shipowners’ Register is recorded to have employed a surveyor in Newfoundland in 1812, Le Havre (1826), Antwerp and Ostend in 1829, and Port Louis in Mauritius in 1832.
When the reconstituted Lloyd’s Register of British and Foreign Shipping came into being in 1834, the General Committee rejected persistent overseas requests for the appointment of surveyors abroad, preferring to wait until the Society’s network of outports in the UK had been properly established. The Quebec Board of Trade made several requests for a surveyor due to the number of ships being built on behalf of British owners or for sale once they reached British ports. As a result, in 1852 the Society sent out Thomas Menzies as the resident exclusive surveyor for Quebec and the St Lawrence River. Menzies and his assistant, Charles Coker helped local shipbuilders raise standards of construction and it was Menzies’ idea in 1853 to use the Maltese Cross in the Register Book and on the classification certificates to denote a ship built under special survey.
An exclusive surveyor was posted to Shanghai in 1869 along with non-exclusive surveyors in Calcutta, Hong Kong, Melbourne Sydney and Hobart. By the early 1880s almost half of the world’s shipping was classed by Lloyd’s Register and in 1914 the organisation’s name was changed to Lloyd’s Register of Shipping.
Of course, Lloyds Register could not do it all. Bureau Veritas was formed in 1828, Det Norske Veritas (DNV) in 1864, Germanischer Lloyd in 1867, The American Bureau of Shipping (ABS) in 1862, Registro Italiano Navale (RINA) in Genoa in 1861 and ClassNK in Tokyo in 1899.
There are now more than 50 classification societies. They employ naval architects and surveyors along with material, piping, mechanical and electrical engineers across the globe. Det Norske Veritas and Germanischer Lloyd merged in 2013 to form DNV-GL but In 2021 they became known simply as DNV which is now the single largest classification society.
The London based International Association of Classification Societies (IACS) has 12 members, namely:
- American Bureau of Shipping (ABS)
- Bureau Veritas (BV)
- China Classification Society (CCS)
- Croatian Register of Shipping (CRS)
- Indian Register of Shipping (IRS)
- Korean Register (KR)
- Lloyd’s Register (LR)
- Class NK (NK)
- Polish Register of Shipping (PRS)
- Registro Italiano Navale (RINA)
- Russian Maritime Register of Shipping
Despite the oversight to vessel standards provided by Classification Societies, some countries elect to impose their own somewhat arbitrary standards which do not always take account of a vessel’s current condition and record of maintenance. A recent example is the decision of the Government of India which has announced its intention to withdraw trading licenses to all Indian owned tankers that are 25 years old or above. The Directorate of Indian Shipping has also banned the acquisition of oil tankers, gas & chemical tankers, container vessels, cement carriers, harbor tugs, and dredgers that are 20 years old or more.
Under the order, existing and foreign-flagged vessels already on charter will be allowed to operate for up to three years. The Directorate expressed the objective of applying age norms to assist in ensuring the gradual phasing out of fossil fuel ships and ushering in of low carbon energy efficient ships.
Globally, charterers and terminals enforce a strict regime of additional inspections on tankers, irrespective of flag or age. That would be a good topic for another day.