In shipping, whenever a ship is temporarily idle due to a lack of cargo or a gradual stopping in commercial operations, it will be laid-up at a certain port. This usually happens because the freight earnings are insufficient to pay the operating costs of a ship. A lay up also takes place during economic downturns while it is a more sustainable alternative compared to selling the ship. During periods that are non-profitable for a ship to keep running, a lay-up is used to minimise the company’s overheads, such as the ships’ machinery deterioration, manpower costs, fuel, and insurance costs. Ship owners are sometimes forced to allow repairs or even consider anchoring their vessels due to lay-up.
When it comes to laying up ships, there are two methods: a hot lay-up and a cold lay-up. A hot lay-up simply means that ships are out of service but can be mobilized back into duty under a short notice. Whereas a cold lay-up is more long term when the ships are pulled out of service because of a lack of employment and are docked/moored/anchored in a safe location while waiting for a new contract or employment. In a hot lay-up, the engine and deck departments are nearly completely staffed, but in a cold lay-up, there would be a significantly smaller dedicated crew to take measures in the event of an emergency, to get the ship moving. Therefore, it can be said that a cold lay-up is considered especially when the owner of the vessel needs to save a lot of money. This is because the main expense to keep a ship running is the manpower costs.
When ship owners are considering a lay-up, they need to find a secure site to do so. There are companies that provide secure sites for lay up vessel service Malaysia. The goal of laying-up in safe locations is to ensure the crew’s safety, the vessel’s security, and the preservation of the environment. It also serves to protect the vessel’s structure against corrosive environments and machinery breakage due to wear.
There are a few criteria to selecting lay-up sites, firstly, the site needs to have protection from open seas, weathers, winds and storms to avoid further structural damage that might be very costly. Next, the security and its influence on the location’s deployment. This means in light of the related applicable regulations, the area needs to have an adequate backup plan. Easy re-mobilization is also another criteria when it comes to selecting a lay-up site, in case of hot lay-up periods, considering the proximity of the site to commerce / business regions.
If maintenance is required, the availability of repair workshops, replacement and storage is essential. Access to general and utility services is also important. During lay-up periods, there will be scarcity in resources such as clean water, supplies, and fuel due to the need for them for operational reasons. Lastly, there must be access to qualified ship agents who can handle the majority of the port documents and personnel changes as needed.