VDMA General Assembly, Public Section
«Future of Classification Societies»
25 September 2006
The German Classification Society Germanischer Lloyd has always been keeping a very close relationship with the German marine equipment industry in general and the diesel engine manufacturer MAN from Augsburg in particular. VDMA and Germanischer Lloyd have quite recently entered into a process of re-defining the future of classification societies.
The VDMA Position Paper on «The Future of Classification Societies» was presented by Gottfried Braun from MAN Diesel, Augsburg stressing on four issues:
- Optimisation of Class rules
- optimisation of Class inspection
- optimisation of Class costs
- future steps
The very vivid panel discussion - at all stages - was reflecting the unquestioned German situation of high class quality assurance systems and top quality management in all sectors of the industry. German Lloyd’s Hermann Klein came under heavy pressure when he was confronted with a list of complaints.
The major issues raised both from the panel and the floor were:
- Class should take product performance more into account
- Class workshop inspections are old fashioned and outdated
- Class is not supporting the harmonisation of rules
- Class witnessing during equipment tests is an anachronism
- Class lacks cost transparency
- Class is still forcing suppliers to go for multiple certification
- Class is still allowing for different interpretation of rules by surveyors
- Class is not willing to submit binding quotations
Hermann Klein stated that every Class has its own concept which is cast in a very complex package not allowing for cost and service comparisons by the equipment industry. He admitted that networking between classification societies is not that easy.
The owner’s standpoint was explained by Christian Fritzen from Peter Doehle when he made the following statements:
- Owners are in a conflict of interests when they on the one hand award an order to Class for the careful survey of their new building and on the other hand they like to be charged the lowest prices for their ships.
- Owners are pro «optimisation», pro «harmonisation of rules»
pro «4-eyes principle», while asking simultaneously for reduction of costs.
Ralf Sempf from Meyer Werft in Papenburg was describing the expectations on the future of classification societies from the yard’s point of view when he emphasized:
- Yard’s vertical range of manufacture is shrinking day after day
- Yard’s can no longer accept that production costs are calculated by half a cent while Class is not willing or capable to submit reliable quotations
- Yard’s are confronted with the wishes of the owners who have a preference for equipment that works rather than innovative solutions.
This joint German initiative perfectly supplements the European Commission’s Class Directive and the strong engagement of EMEC for mutual recognition of class certificates.
Alexander Nuernberger, Chairman of VDMA and Managing Director of Hatlapa questioned the following issues:
- transparency of Class costs
- «materialised costs» (tests) versus personal costs (surveyors)
- inspection of mass produced products
- price deviations by 1:10 between different classes
- competitiveness of the equipment industry
The issues of counterfeited products and technology transfer was leading to a very emotional discussion. Hermann Klein admitted in the course of this debate that some classification societies are treating counterfeited products in a «careless» way. Thomas Fetzberger from ABB added that ship owners tend to go for pirated products because of cost considerations and they therefore are expecting Class to be «polite» and/or «tolerant».
This caused Hermann Klein to give some kind of a warning: if the industry continues to insist on the harmonisation of rules, Class will promote «harmonisation» of the suppliers- in other words: Class will encourage pirates to put established suppliers under pressure.
This clearly unveils how Class is interpreting its assignment: Class no longer keeps to the idea of being an independent, highly technical orientated «non-for-profit» organisation, functioning as an arbiter in technical disputes.Future Class obviously wants to actively influence Government’s industrial policies or more progressively make a policy of their own.
The last issue to be discussed was the «flat rate classification contract» between ABS and Maersk Moeller, which is expected to remain a unique fact.
Issues which were not even mentioned apart from lack of time were: the position of SMEs, cartel and monopoly in the context of Class, the P.R. of China and the transfer of European technology and competition in the Internal European Market.
The debate was delivering a proof that the situation in Germany is quite different compared with the rest of the world as German marine equipment manufacturers and systems suppliers do not only have an exceptional high level of quality in their production but also keep to a unique code of conduct.
VDMA General Meeting
Panel Discussion on the future of Class
Hermann Klein, Germanischer LLoyd, www.gl-group.de
Christian Fritzen, Doehle, www.doehle.de
Ralf Sempf, Meyer Werft, www.meyer-werft.de
Gottfried Braun, MAN Diesel, www.man.de
Georg Wachtmeister, TU Munich
Alexander Nuernberg, VDMA Hatlapa