“It has an Idwal 79,” the broker said, as he ran through the merits of some vessel sales candidates for TradeWinds, “so it’s a good ship.”

He was referring to the “Idwal Grade” for the vessel on a ship inspection report for a series of tankers that had been prepared by Graig Shipping-controlled ship inspection company Idwal.

Vessels are scored out of 100, with the higher figure denoting the better-quality tonnage.

The grading, as part of the pre-sale third-party reports prepared by the company, seems to have caught on in the market to the extent that it has moved into sale-and-purchase speak.

Idwal’s reports are nothing new. The company has been around since 2010 and the grading system was introduced in 2018.

New meaning

But Covid gave a new meaning to the business. With shipowners’ trusted inspectors no longer able to travel freely, would-be sellers turned to third parties to get details of their tonnage out to prospective buyers.

“There is a big tendency now to outsource more inspections than ever before. That’s a legacy of Covid and I think it is one that is here to stay,” Idwal chief executive Nick Owens said.

For a fee, sellers can have the company’s global network of inspectors produce a report on their vessel that Idwal then offers for sale to prospective buyers at a price set by the seller — usually about $1,000 — with a revenue-sharing agreement between the two parties.

Other providers are available. Brokers cited Wilhelmsen and Aalmar Services.

But market players said it is Idwal and its score grade that has really captured the essence of the market.

Owens is modest on his company’s play but said in S&P that he would not be surprised if its market share was upwards of 40%.

The company has more than 300 inspectors globally, and that figure is growing.

Owens explained that the Idwal Grade is “programmatically calculated” using proprietary algorithms.

He described the inspection process as “vigorous and standardised”, adding that there is a methodology to ensure reports are consistent, accurate and free from bias.

“We are trying to cut out the subjectivity of inspections and put a more objective viewpoint on it.”

The intention is to get owners into a position where they can benchmark themselves and look at one ship against another to decide which they want to buy.

The company will shortly be adding a vessel’s average for its peer group to its reports.

Idwal wants to get its grade to the level where it becomes a standard.

At this point, it will then be possible to return some data back to the market — information it has been collecting since 2018 to give broad indices as to where the grades and averages are.

Making the grade: Idwal has made a feature of its Idwal Grade in its pre-sale ship inspection reports

Owens said Idwal is looking forward to showcasing some of that data and how it correlates with other factors such as earnings.

Brokers clearly love Idwal reports.

One explained that it essentially makes their job of selling a ship easier, in that they no longer have to persuade an owner to send its inspector to look at a vessel and instead can get an easy-to-read report on the ship.

It also shunts some of the administrative tasks of report distribution onto someone else.

The grade clearly has value.

Owens recounted how the company was recently asked to review one of its reports, only to find that the PDF had been doctored to improve a ship’s score.

Some owners do have niggles about the apparent shift to third-party, pre-sale inspections and the popularity of the reports.

One bemoaned the apparent 15-point range. A bad ship would rank in the high 60s or below on the Idwal Grade, while a good one would be in the low 80s and above, limiting the distinction on vessels to a narrow range, he said. “It’s a pretty blunt instrument.”

He described the reports as “very generic” and “a box-ticking exercise”. “It is just not the same as having your own person on board who knows your priorities.”

Owens understands that some companies want their own personnel out there. He likens it to having your dad look at a particular car you want to buy: “He will give trusted direct feedback. But looking at eight ships — how do you tackle that?”

Several S&P players pointed out that shipowners said their representatives have not been on vessels for inspections for more than two years since the onset of the pandemic in early 2020.

They believe the remote inspections are now, to quote one, “a habit that will stick”.