Mariners Stranded By Coronavirus Leads To Jump In Labour Costs

Due to widespread COVID-related restrictions, shipowners are facing rising labour costs as the COVID constraint is making crew swaps more expensive and limiting the movement of seafarers.

The often-unseen labour behind global trade is facing a humanitarian crisis. The seafarers are more and more stuck aboard ships beyond their employment contracts and even beyond the limits allowed under maritime law now face a different challenge because of border and flight restrictions to fight the spread of COVID-19.

rising crew costs
Image Credits: Baltic Exchange/bloomberg.com

According to the Baltic Exchange, a publisher of benchmark shipping rates, the daily crew costs have increased 10% from January to mid-July as relieving and replacing ship workers has become difficult during the pandemic, the rate goes up to $3,144 for cape-size dry-bulk carriers. That figure is the highest since the bourse began tracking the data on a quarterly basis in May last year.

As estimated by The International Chamber of Shipping there are now 400,000 seafarers stranded at sea despite repeated calls from the industry for governments to deem them “key workers” and facilitate their transfer. The situation could very well worsen even before it gets any better.

“Whilst we have seen more crew transfers taking place in recent months, there is clearly still a long way to go,” the Baltic Exchange said in a written response to questions.

Some firms are diverting vessels to a narrow number of ports that facilitate changes, this process can add hundreds of thousands of dollars in costs which the company bares and in-turn so does the economy. Some organizations have even chartered flights to relieve and repatriate seafarers. According to the chief shipping analyst at industry group BIMCO, Peter Sand and, management firm Executive Ship Management, the higher crew and operational costs are usually borne by shipowners, but if the global crew-change crisis persists, owners may push for the extra expenses to be shared by other parties including charterers.

Reference: bloombergquint.com

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