Cracks of various sizes and orientations may arise at many locations under conditions of pitting corrosion, local stress concentration, fatigue and impact loads. It is essential to evaluate the effect of cracks on the ultimate strength and collapse behaviors of various ship structural members, so as to avoid complete structural failure. The assessment of this effect would serve the life-cycle management, maintenance and repair strategies aiming to ensure structural longevity of ships and offshore steel structures. A review of the advances carried out during the last few years, shows that the effect of locked and propagated cracks on the ultimate strength behavior is complex since it cannot be isolated from the effect of initial imperfections and corrosion. Published experimental attempts were a good base, but most literature is based on finite element modeling that proved to be a useful tool to generate different possible damage scenarios. Recent empirical formulae had been proposed to estimate the reduction in ultimate strength due to cracks and other factors; some of these formulae may prove to have a practical use to attain a consequence based crack assessment criteria.