IMPACT OF COVID-19 ON SHIPPING INDUSTRY
By Er Manohar Lal Yadav (Shipping Management Program 1996)
Humankind is going through a new and unprecedented experience with the rapidly spreading COVID-19 pandemic. The human beings at large, the Civil Society and the Governments around the world have been caught off the guard by this virus. The pandemic impacts the human beings in many ways i.e. health wise, social relationship wise, and economic status wise. It has impacted all businesses across the globe.
In this story, I shall talk about the Shipping Industry as this transports 90% of the goods worldwide and plays a key role in the world’s economy. The shipping business is international and carries not only the goods but even goodwill across the nations. Therefore, as long as shipping trade is alive, the fear of de-globalization (on account of pandemic Covid-19) is drastically reduced.
The Shipping Industry has been critically impacted, and is responding to the various challenges with the back at the wall. The nature of this business is global and the related issues are also being considered by the Maritime community involving IMO ( International Maritime Organisation) and various governmental organisations.
The issues can be categorised under various heads such as human related issues, operational related issues, finance related issues and more.
HUMAN RELATED ISSUES:
Containment & Medical handling of affected or suspected cases onboard ships poses a huge challenge on a ship. Medicines are available as per established standards in the medical chest and may run short. God forbid if crew member/members on board turn positive, the other members are easily hit, and transferring them ashore remains the only solution. The poor crew members run into deep trouble if the port authorities of that country deny the permission to accept the sick crew or may even demand a very high fee for hospitalization from the company.
The Crew change/Sign on/Sign off & Seafarer repatriation: Ever since the COVID-19 has broken out, the ships’ crew have faced a nightmare. Between March and June, over 150000 crew members were waiting to be relieved. Because of cancellation of international flights, visa restrictions, customary quarantine for 14 days etc., the crew suffered the most. Factors like, working beyond their tour of duty, fatigue and psychological fear of arrival of the virus made their life difficult.
Only towards the beginning of May end and early June, under pressure from IMO and ILO, the situation has begun to ease. Even now, roughly 40% crew members, estimating to over a lakh of seafarers, are waiting to be relieved. ITF has taken a serious note of it and has warned of the consequences by a notice on June 15.
An initiative by the largest ship management company VGroup and well-established Shipping Schulte Group to get * Key personnel status for the Seafarers * has been hailed by IMO, IMO Member States and their Governments for the vital role in maintaining global supply chain and delivering of essential materials and goods.
VGroup, BSM, Anglo-Eastern, PCL, ESM, FML, Synergy, and OSM are the first amongst the shipowners/managers who have taken a serious note of the well being of the crew and their repatriation. The BSM, headed by the CEO, Mr Ian Beveridge, effected crew changes even in the most difficult time. He said in an interview about the ship building sector being affected during the pandemic.
In India, the Director General of Shipping has allowed crew changes within India in the month of May. In the month of June, FOSMA (Foreign Ship-owners Representatives and Ship Managers Association) and MASSA (Maritime Association of Shipowners, Ship Managers and Agents) have jointly launched crew change initiatives by organising outbound and inbound travels from Delhi to Colombo, Hong Kong, Singapore, Doha, Amsterdam & London by chartered flights for the benefit of member companies on sharing basis. For Crew change at Gibraltar, flights have been used to and from London. Vande Bharat flights are being extensively used by Seafarers flying out and into India. Dania Ship Management uses its own chartered planes for crew change.
All types of ships have to follow IMO standards, rules, certifications and surveys by Flag Inspectors/Port authorities/Vetting inspectors/Class Surveyors and others. During the COVID-19 outbreak, the scheduled inspections/surveys had to be deferred due to non availability of flights, visa restrictions and other constraints, thereby causing disruptions and delays for the sea bound vessels.
OPERATIONAL RELATED ISSUES COVER:
Supply of food items,medicines, stores and spares: During the ongoing COVID-19 situation, the crew has suffered due to non availability of food, water and medicines in time. In case of supplies, the quality remained suspicious as social distancing norms with no hand touch regulations applied. The companies on the other hand paid much higher prices on account of long delays in local and international transportation.
Bunkering or de-bunkering also had a minimum effect, but it could invite the virus if the bunkering team did not use PPE. Also, it could escalate the cost for delays by pilots/local custom clearances etc.
Cargo operations are also likely to be affected on account of closure of Ports and Terminals due to non availability of personnel as well or Governmental restrictions. This can lead to delays and subsequent rescheduling of discharge or loading plans. In case of containers, strict compliance of precautionary Covid-19 measures is called for. Health issues can arise while handling containers. A vessel with the history of having been to a high risk area (Covid impacted) can again be subjected to Quarantine and thereby further delaying the cargo operations. The delays due to Pilot Shortage or refusal to board the vessel, coming from a high risk area is common in this situation. Here, the companies should ensure prior written agreement with the Port authorities.
Ships under repairs in docks or outside may be delayed due to local laws and restrictions with regard to shortage of manpower, availability of spares in time through customs etc. A written agreement can help the Shipowners/Shipmanagers to contain the loss.
FINANCE RELATED ISSUES: Crew change in itself shall be much more costly during the Covid outbreak period. Delays due to various reasons may not be that easily claimed as insurance covers are hardly available due to the sudden and uncertain nature of the outbreak. As on today, the expiry date of Covid-19 cannot be forecasted and it is therefore not easy to guess the quantum of financial losses the shipping companies can bear during this pandemic.
At the time of writing, while crew change presents a challenge, there is a silver lining from Singapore (SeaTrade Report). Singapore has approved 13000 crew changes. CEO of MPA, Ms Hoon is proactive with assistance of all stakeholders and a Singapore based company ESM’s CEO, Mr BS Teeka has offered chartered planes for seafarers from India to Singapore. He says it is the time to unite and share our resources. He has offered his help to all other Ship Managers in Singapore.
Sorry, the comment form is closed at this time.