The shipping industry is starting to feel the heat of the pandemic as exhaustion is taking a toll on seafarers. Many seafarers have worked beyond their term without much rest so shippers are trying to give them some reprieve.
However, commodities giants are playing spoilsport as they compete to deliver food, fuel and raw materials. The big commodities firms are deliberately blocking the relief of seafarers by avoiding certain types of ships.
Nearly 200,000 seafarers are stranded at sea, serving in ships beyond their terms owing to covid restrictions. Now, the standoff between commodities giants and shipping companies are further delaying the seafarers’ release.
These companies want to deliver their goods as fast as possible and don’t want to be bogged down by crew changes. Crew changes will require a substantial amount of time and resources because of the covid protocol everywhere. So, these firms have gone to the extent of asking their shipping partners to guarantee a no crew change contract.
This has further hastened the maritime labour crisis which is already reeling under for the past 12 months, says the United Nations along with labour unions and seafarers’ associations.
Crew Change Crisis
Many seafarers are working without leave for more than 18 months now. Such is their condition that some have diverted ships to the middle of the ocean and refused to commence on the journey demanding relief.
Changing crew at any routine port stops were the usual protocol in the pre-pandemic era but now it has become a logistical nightmare. While some ports are asking for days and weeks of quarantine for a crew change, others directly refuse ships that have undergone crew change in the last 10-14 days.
This prompted many oil and shipping firms to sign a crew change declaration earlier in January. Companies like Rio Tinto Group, Vitol Group etc pledged to resolve the crisis. The Industry acknowledged their shared responsibility through the Neptune Declaration and pledged to work for it together.
But little has changed as many big charterers remain outside the purview of the declaration.
“We chose not to sign because we believe that our current practices in respect of crew changes are fair and fully respect the need for regular crew changes,” said a spokesperson for Equinor ASA, a major oil, gas and energy company based in Stavanger, Norway. “We do not charter vessels for any voyage if a crew change will be required that cannot be accommodated in our delivery schedule.”
The largest US oil producer, Exxon Mobil Corp., refused to sign the declaration citing their work-in-progress measures to address the issue. The firm is considering the next steps to facilitate crew change.
Rajesh Unni, the Chief Executive Officer of Synergy Marine has termed the Declaration as a work in progress pact.
“Shipping has always had competing interests, but companies that sign the Neptune Declaration at least commit that they will then follow the standard protocol, which should then give you a lot more comfort that now we’re all on the same page”, he said. Synergy Marine handles 375 ships and commodity carriers.
Crew Change Cost Liability
Meanwhile, a tussle over the liability of higher crew change costs ensues. The commodities giants and their shipping companies usually settle this over spot charterers but now this practice is becoming a bone of contention. Spot charters are as high as 85-90% for a few days to a few months of the journey.
Some commodities giants have signed a no crew change contract or at least asked for verbal assurances of no crew change. Charterers on the other hand are doing an extensive questionnaire to understand the ship crew and Shipowners plan crew change. One shipowner said that he had to extend workers’ contracts, pay additional salary and promise to receive seafarers after the journey to secure a charter with Rio Tinto. The shipowner had to ensure that no crew change would happen during the contract.
“Rio Tinto does not use ‘no crew change’ clauses in chartering contracts,” the company said in a statement. “Rio Tinto aims to support the shipping industry and the human rights of the seafarers on which it depends. This requires collaboration between ship owners, who employ the seafarers, charterers and regional port authorities around transparency of information and flexibility on schedule.”
Labour advocates and seafarers’ Associations underlines the extent of the problem faced by the crew who can’t walk away at ports. The passports of the crew remain with the ship captain and the heavy security at the port ensure that no one can walk away at will.
Companies Should Be Flexible
While the industry urges ship owner’s to ensure crew safety and sanctity and plan for crew changes, many say they will only do crew change when the ship isn’t out on a job. In the past, organizations like BIMCO have urged charterers to share the costs of a crew change. BIMCO asked to include time charter clauses but so far these haven’t helped much.
Many labour groups are asking companies to be more flexible and considerate. They want to include the provision of diversion and delayed deliveries to ease this crisis.
Charterers Need To Bear the Costs
Investors like Fidelity International had asked frequent charterers to be more flexible and enable crew changes. They have even suggested that charterers provide some financial support to the crew that needs to be repatriated immediately.
“Charterers at this point do need to share costs and assume the delays they might face,” said Laura Carballo, head of maritime law and policy at World Maritime University in Malmo, Sweden. “That’s their biggest argument: it’s about the delays. Sorry, we’re all facing delays right now. The world is only running because seafarers are doing their job.”
Kansas based Koch Industries had instructed shipowners to strictly follow a no crew change policy under all circumstances.
“Koch works closely with vessel owners to ensure the safety and wellbeing of crew members. This is an issue we are watching closely and looking for ways to resolve”, said the company statement.
Vitol on the other hand has ensured that crew changes don’t occur in certain spot charters.
“We sought to manage our shipping business in line with the standards outlined in the Neptune declaration. Wherever commercially and operationally possible we facilitate crew changes,” said company spokesperson Andrea Schlaepfer.
“As a vessel owner and manager Vitol appreciates the challenges of the current situation but believes that with good management owners can maintain high standards of seafarer welfare”, Andrea added.
Meanwhile, the Neptune Declaration has urged countries to change their port and border policies to help curtail the crew change crisis. IMO has urged 55 countries that have demarcated seafarers as essential workers to take actions immediately.