The Miami Herald

South Florida salvage firms respond to emergencies at sea

For an example of how to base a business on disaster, look no further than Resolve Marine Group’s Joshua James Response Center in Fort Lauderdale.

The 33,000-square-foot warehouse, named for a historic life saver, bursts with fire pumps, hydraulic power units, roller bags, dive helmets, pullers, boats, anchors and countless other pieces of equipment that could be sent around the world at a moment’s notice.

Or it would burst if the 32-year-old company weren’t working on projects across the globe at the moment.

“A week ago we were doing one job,” said chief operating officer Farhat Imam. “Now I have five on my table.”

Such is the nature of the salvage business: global, demanding, unpredictable.

Resolve Salvage & Fire is one of two South Florida companies, with Pompano Beach-based Titan Salvage, that have grown from tiny operations to multinational corporations large enough to compete for the world’s most high-profile projects. A third major firm, Netherlands-based Svitzer Salvage, has a regional headquarters in Miami.

The majority of the world’s salvage companies focus on specific geographic areas, said Mark Hoddinott, general manager of the International Salvage Union. The London-based trade association has 64 full members from around the world.

He said just a handful or so would describe themselves as international salvors — but that number includes Titan, Svitzer and, more recently, Resolve. That is crucial for the American companies’ survival because there are fewer emergency response cases and wreck removal projects in the U.S.

Titan, which like Resolve was founded in 1980, was acquired by Jacksonville-based marine transportation and logistics firm Crowley Maritime Corporation in 2005. The salvage company expanded to the UK and Singapore more than 10 years ago and added a base in Australia two years ago.

Resolve, with about 125 employees, expanded its global operations much more recently, adding a London location five years ago and expanding in Singapore in 2010. In addition to the main revenue generator of salvage, Resolve has a marine firefighting education arm, a maritime academy, an engineering office, simulator training for cruise ship officers and crew and an oil spill response office in Shanghai that opened last year.

Joe Farrell Jr., the company’s founder and owner, marvels at the growth. Before starting the company, he worked as a Coast Guard diver in the Arctic, explosives adviser in Vietnam and torpedo recovery diver at a weapons range in the Bahamas. Eventually he started running a tugboat to tow vessels in trouble, which led him to start the company.

“I just kind of learned it backwards, really on a wing and a prayer,” said Farrell, 61, whose company is working at the moment in Taiwan, Singapore and Caribbean. “Now I’m amazed, quite honestly...We’ve arrived.”

That international growth put both companies in a position to respond to the most famous salvage job in recent history: the recovery of the capsized Costa Concordia cruise ship off the coast of Italy.

The ship had departed from Civitavecchia, a port near Rome, when Capt. Francesco Schettino took an unauthorized course too close to the island of Giglio and struck a reef. In the chaos that followed, 32 people died. The 952-foot vessel came to rest on its side on a rocky seabed near shore, where it remains today.

Costa Crociere, an Italian unit of Miami-based Carnival Corp., invited 10 of the world’s largest salvage companies to bid on the massive removal project. Six companies or consortiums turned in plans – including Resolve and Titan Salvage.

The $300 million job went to Titan Salvage and its Italian partner, marine contractor Micoperi. In late May, they unveiled their plan to float the ship intact in a complicated, months-long operation.

Work has already begun and is continuing 24 hours a day. Crews have cut off some exterior parts of the ship and are working to remove the rock from the port side of the ship. Inspections are to continue until the end of the month.

Over the next six months, the wreck will be stabilized and supported with an undersea platform. To help roll the ship upright, workers will attach watertight boxes to the side that is out of the sea and fill those with water. Using cranes, crews will pull the ship upright and then refloat it by filling the same watertight boxes — plus another set on the other side — with air.

Refloating is expected to happen by Jan. 15, and the ship should be towed to a port by the end of January if all goes as planned.

While Titan is not allowed to say anything about the job beyond what has already been approved by Costa, some of the company’s previous projects hint at their expertise.

In 2007, the company won the contract for a project near Coos Bay, Ore., to remove the New Carissa, a wrecked freighter that had been stuck offshore for eight years. The job was considered difficult if not impossible because of rough sea conditions, said Titan’s senior salvage master, Shelby Harris.

But the company floated out two jack-up barges that stood above the water and fashioned a self-propelled cable car to shuttle workers from the mainland without subjecting them to the dangerous surf. After on-site work started in 2008, the job took less than four months.

Titan has earned a reputation for working with difficult wrecks, Harris said.

“Wreck removal is the fun stuff,” said Harris, who oversaw the New Carissa project. “You can plan it and you can be creative and you can build things.”

The company, with about 50 employees worldwide, has worked on more than 400 wreck removal and salvage projects over the years.

Todd Busch, a Crowley Maritime senior vice president who oversees Titan Salvage, said the unit might handle 7 to 8 projects in a light year or 15-20 when things get busy.

“This year, we’ve done 11 so far,” he said.

Jobs can be as simple as getting a large luxury yacht that has run aground back afloat or as complex as refloating a container ship piled with cargo. The APL Panama job in Ensenada, Mexico required tugboats, barges, a dredge, cranes, a helicopter, pullers and 20 trucks full of gear back in 2006.

Titan was awarded that job under a Lloyd’s Open Form contract, which means they had to pay all the costs of the job up front and get reimbursed after the fact. Busch said that depending on the type of contract used, a salvage company can spend tens of millions of dollars before getting any cash back.

Other agreements might be set at a fixed rate, but if unexpected costs emerge, the company could lose money.

And sometimes there is no guarantee of payment for work, such as when a company pursues a job on speculation. It can cost hundreds of thousands of dollars just to craft a proposal, Busch said.

“Each one is different and that’s why there’s no book or blueprint to say, ‘Oh, we’ve got a salvage job, let’s do this,’” he said.

While Resolve recently has expanded to global markets, some of its past projects will be well known to longtime South Floridians. After volunteer efforts to sink the retired Navy ship Spiegel Grove off Key Largo to become an artificial reef went amiss in 2002 and the vessel flipped over, the company was called in to finish the job.

The ship went down on its starboard side instead of upright, but it was still declared a success because divers could see the entire wreck — a goal of the project. Three years later, a hurricane turned it upright.

Back in 1996, Resolve was called to collect the wreckage of ValuJet Flight 592, which crashed into the Everglades, killing 110.

Workers sifted through the muck and recovered remains of the victims and pieces of the aircraft and cargo, including the oxygen-generating canisters that were blamed for igniting during flight and causing the crash. The heat, swamp environment and occasional threat of alligators made it a challenging job, Farrell said.

“It was just miserable in more ways than you’d want to imagine,” he said. And more recently, the company was a contractor for oil spill cleanup following the Deepwater Horizon disaster in the Gulf of Mexico — not what Resolve typically does in the U.S.. The company was initially called to help the firefighting effort on the rig but ended up spending months on cleanup duty.

Besides Resolve and Titan, another major industry player has a presence locally. Svitzer Salvage, a 175-year-old company based in the Netherlands, has its Americas headquarters in Miami with eight employees. The company, which provides salvage and other service, has been in Miami since 2009 to respond to emergencies and salvage needs in North America and the Caribbean.

Svitzer Salvage Americas recently announced a lease for a nearly 23,000-square-foot warehouse in Dania Beach; the company is busy filling it with standard emergency response equipment.

The industry as a whole has grown in the last 10 years despite a drop in the number of emergency response contracts, said the International Salvage Union’s Hoddinott, who until recently worked for Titan Salvage. The reason: an uptick in the market for wreck removal, especially as environmental concerns over old wrecks have grown.

He described the work as very competitive, difficult to join and capital intensive.

“Marine salvage is quite a high-risk business,” Hoddinott said. “It’s not everybody’s cup of tea, to be honest.”

Weather conditions can delay a project. Rough seas can make work difficult. Competition is fierce. In some areas, extra security might be necessary to protect against pirates.And a primary client might be an insurance company, which might disagree with a vessel owner about what kind of work should be paid for.

Although highly cyclical, Hoddinott said the worldwide emergency response business could bring in $100 million in revenue a year and between $300-500 million annually for wreck removal.

For companies, he said, setting budgets can be “impossible.”

Busch, the Crowley executive who oversees Titan, said the amount of money a company nets can range from “a job that loses money to a job that returns a very handsome profit” depending on the level of risk the company assumes, weather conditions, political influences and other factors. While Crowley says on its website that it pulls in more than $1.6 billion in annual revenue, the privately held company does not break down earnings for its subsidiaries.

Titan Salvage has its own strategy to cope with the cost of doing business. The company only owns two jack-up barges that can work in heavy surf areas, but no tugs or other major equipment. Instead, the company charters what it needs for a job locally.

“It makes us nimbler and quicker and we don’t have to carry all the cost of owning a bunch of vessels,” Busch said.

Farrell, who does not release financial details about his company, said jobs can make the company thousands or millions of dollars, depending on the size, complexity and risk.

Profit margins can range from 10-40 percent, he said.

“There’s just a lot that can go wrong,” Farrell said. “You can have a number of millions tied up in them and you always hope the insurers are there to cover you and they don’t deny claims. You’ve got to watch how much you put out there.”

Farrell said Resolve tries to build stages into contracts so payment — from vessel owners, insurance companies, governments or other sources — is guaranteed once certain portions are finished.

He’s also got a policy against taking on long-termdebt because the work can be so uncertain. When Resolves buys real estate or equipment — like a barge that was delivered recently — the company uses credit lines and works out a plan to pay the asset off as quickly as possible.

“By not having big mortgages on equipment, I’m not laying people off,” he said.

Farrell, a devout Catholic, has yet another tool in his arsenal: He goes to church every day when he is in the United States.

“You’ve been killed as many times as I’ve been killed and it hasn’t taken...you’d go to church a lot too,” he said.

Befitting a man who makes a living from shipping disasters, he has a very personal connection to the most infamous shipwreck of modern time. His grandmother planned to leave Ireland for the United States in 1912 aboard a brand new ship called the Titanic.

“My great grandma said, ‘You’re not going on a vessel that is challenging the Lord itself,’” Farrell said. His grandmother ended up on a different ship.

Said Farrell: “I’m convinced I wouldn’t be here without the good Lord above.”

South Florida’s Marine Salvage Firms

RESOLVE SALVAGE & FIRE

Employees: 125 (in entire Resolve Marine Group)

Year founded: 1980

Offices: Fort Lauderdale (headquarters), United Kingdom, Singapore, Shanghai; depots in 18 locations across the U.S., including Guam and Puerto Rico

Major projects: LPG Oberon wreck removal in the Taiwan Strait (current); sinking of Spiegel Grove for artificial reef off Key Largo in 2002; ValuJet crash in Everglades in 1996

TITAN SALVAGE

Employees: 50

Year founded: 1980

Offices: Pompano Beach (headquarters), Australia, United Kingdom, Singapore

Major projects: Costa Concordia in Italy (current); New Carissa freighter in Oregon in 2008; APL Panama in Mexico in 2006





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