Salvage income rose in 2023 from a historic low the previous year after a significant increase in wreck removal work, according to annual figures from the International Salvage Union (ISU).

Gross revenue from 184 services provided increased to $398m, from $241m the previous year, with an even split between emergency response and wreck removal, said the ISU, based on data supplied by its members.

Decline in LOF salvage contracts continues despite industry backing
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Wreck removal income increased to $193m from $55m in 2022.

The figures confirmed the continuing decline of Lloyd’s Open Form (LOF), with revenues representing just 15%, or $29m, of all emergency response cases.

LOF used to be the leading salvage contract but its use has declined as shipowners increasingly opt for pre-arranged terms or standard towage contracts.

Under the LOF system, salvors are appointed soon after an incident happens, allowing them to respond immediately and get equipment in place. The salvage award is decided at a later date through negotiation or arbitration.

The ISU, which has 50 full members including the industry’s main players, has championed the contract, saying that delays can limit salvors’ options. But the number of cases has continued to decline.

ISU president John Witte said: “The very small number of LOFs for our members in 2023 are extremely disappointing but sadly reflects a long-term downward trend.”

Awards for LOF contracts are made based on factors including the value of the vessel, the skill of the salvors and the measure of success.

Such awards “must remain the cornerstone of funding for our industry but this is increasingly difficult as these statistics so dramatically demonstrate”, said Witte.

The figures are for revenues received in 2023 rather than the year the service was provided and before contractors’ costs were paid.

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