October 16, 2014

Employee engagement

There is little attempt, in the vast majority of shipping, to engage in any serious way with officers and crew during their off periods. The stress on human capital, its retention and its engagement may be considered important by more than three quarters of the world’s business leaders, according to a Deloitte global survey, many of whom want to make HR and engagement a continuous and holistic part of their business strategy. Not shipping, though. It is still stuck in medieval times wherever HR is concerned.

Even though shipowners and shipmanagers seek out their seagoing contractual workers for euphemistically called seminars and such, this, in reality, is rarely a serious exercise to solicit seamen’s views or, indeed, to make them feel that they are a critical part of a broader industry that cares for them. That, in any case, is not seen by individual shipmanagers as part of their brief; they usually want loyalty, not professional opinion. That people’s attitude affects productivity and safety is well known in shipping; that people need to be engaged- and emotionally invested- to improve both is an alien concept.  

That we fail to harness positively the countless years of collective experience of those who sail is sad, as is the fact that we don’t see this as an exercise- a common practice almost everywhere else- as one that is essential to the industry. And, although much of the fault for this must fall on those ashore, seamen themselves are also to blame for this state of affairs.

At the end of a contract, crews that sign off from ships are usually mentally and physically fatigued and, after months of living on ships, do not want anything to do with shipping in the little time that they have at home. They often have pressing issues that are awaiting their arrival anyway; affairs have to be put in order, children have to be educated and family problems have to be defused. Besides, it is time to relax. I, for one, used to want to disengage with ships and shipping completely the minute I stepped off the gangway. Even a call to a company seminar was considered both an imposition on my time and a waste of it; I was wasting enough time anyway attending usually useless STCW and other courses anyway. If somebody had asked me to engage with the industry in some other way while I was sailing- even to give feedback or opinion- I would have laughed at them. I had neither the inclination nor the time to do so.

Many seamen today are not just fatigued. They are weary, and are even more disillusioned with the industry than I was; one has to just talk to them to see that. Many are only in it for the money, such as it is. Most seamen do not feel any particular need to make an effort to give anything back to shipping; they just want to take their money and run.
This ethos exists in some other industries too, so perhaps it is unfair to single out shipping here. I do believe, though, that shipping is unique in its working environment and that there is a higher challenge to be faced here than, for example, in a call centre or in an IT setup. There is therefore a greater need for professional seamen to share experiences, best practices and the like. There is greater need to have a far truer and much wider maritime community than what we see today.

There is also a great need to have seamen feel that they belong in this industry as equals, not as second class citizens. For them to feel that their experience is valuable and their professional opinion is valued. That is an important first step that, barring a few exceptions, has still to be taken. 



October 09, 2014

The matter of the hub

The maritime sector initiatives announced by the new Indian Government have everybody in a euphoric tizzy. Shipping and its allied sectors have been neglected for so long that the sudden focus on the industry appears to be much brighter than it otherwise would. Or even should, because many of these initiatives, for example those connected with waterways, will take years before they pay off- there is no low hanging fruit here. Some measure of optimism is warranted, sure, but this must remain guarded optimism for now.

In my view, the Modi government in general, and Shipping Minister Gadkari in particular, need to look seriously at a critical area of shipping that they have ignored so far- the manpower segment. This will not just involve the overhaul of the corrupt and decaying (decayed?) seafarer assembly line; it will also include attracting and setting up legal, financial, insurance and other such markets in India, with existing senior Indian maritime professionals as their backbone. Additionally, an appropriately developed educational and training environment would ensure a steady supply of expertise for the future as well.

The advantages are obvious. The advent of marine finance, law and insurance firms will go a long way towards developing India as a maritime hub. These do not require massive investment; these require people with expertise, of course, and this is why creating an appropriate maritime business climate is essential. We do not have this yet, but mind-sets can change and be changed very quickly.

The assembly line issue is actually easier to resolve, if only the blind men in the industry would stop looking at the elephant one appendage at a time, blaming each other’s spheres of influence as the reason for the mess. Since those blind men will not regain their sight anytime soon, this problem needs a holistic solution imposed from above. It needs policing to weed out corruption. We know what needs to be done here. We have done it before. Not all that long ago, Indian officers were considered amongst the best in the world. That should be the aim once again.

Indians tend to see things in a vacuum. We fool ourselves, thinking that the rest of the world has stopped and is waiting for us to catch up. That this mentality is laughable is obvious; in the last two weeks alone, Singapore- which wants to challenge London- has announced plans to boost its involvement in marine insurance and ship finance. Working groups have been established to, amongst other things, “develop Singapore as the premier ship finance centre in Asia.” And in Dubai, a new maritime arbitration centre has been set up, the first of its kind in the Middle East. The Emirates Maritime Arbitration Centre will address and resolve maritime disputes based on legal frameworks and set maritime regulatory guidelines and standards. This is part of the “Dubai Maritime Sector Strategy” which aims to “position the emirate as a world-class maritime hub.”

Any guesses as to how many Indians will be part of the maritime growth of these two countries? Judging by the numbers already there, hundreds, if not thousands. This is worse than brain drain or economic loss. It is a tragedy that a country with thousands of years of maritime history- and one that aspires to be an economic powerhouse- does not have the wherewithal to exploit the expertise of its own nationals.

Messrs Modi and Gadkari need to act today. The climate and the machinery to develop maritime expertise- out of the huge pool of seamen and ex-seamen already available to them- needs to be put in place quickly. People are key-always. Little progress will be made in the maritime sector, including in the parts of it that they themselves have put under the development spotlight today, without men and women who are qualified and efficient to run those sectors. Not to speak of the tertiary and spin-off benefits to India and Indians of following the course I recommend.

It is imperative that we make a start now. India cannot hope to replace London- or even Dubai or Singapore- as a maritime hub by tomorrow, but it can start on a measured path that can make it a worthy rival in relatively quick time and with relatively low investment.


October 02, 2014

Profiteering with shale

The recent criticism of oil companies and US regulators in Japan and elsewhere in connection with US shale oil exports is meaningless, in my opinion.  The big oil companies are being accused of shale-export profiteering, at the expense of one of their closest allies, Japan and to the detriment of the US population. A four decade old law that held them back which said that US oil could only be exported in the public interest has been conveniently modified for them.

I still say this objection is meaningless because the US has a long history of doing just what it is being accused of- military intervention and support for despots included. So what is new? Why criticise now for an accepted capitalist practice?

The story, briefly, is this: the shale oil revolution in the US has set it up to become the world’s largest oil producer by next year, according to the International Energy Agency. However, it will still remain a large net importer of oil, because the shale oil it produces is too good; it cannot be processed by its own refineries that are geared to handling crude oil from abroad.

Simple solution, build new or retrofit existing refineries in the US to handle shale, right?  

Not so simple. Because the price at which oil companies can sell shale oil in the US is about 20 dollars a barrel lower than what it can sell to Japan. So exports make sense- to the oil companies, that is.  Besides, handling shale oil domestically would mean spending money on refineries. It would also create a glut in shale domestically and bring prices down significantly. Good for the US consumer. Not good for the oil companies. 

So they got together to lobby US (why do we word the word lobby for the US and bribery for India?) politicians to modify a 1973 ban on oil exports that was meant to protect domestic consumers. Obama signed this into law in June, allowing shale oil export. The oil companies are now getting rid of their excess inventories by selling shale to Japan at about 3 dollars a barrel lower than what Japan would pay for crude. And they have China in their sights next.

The US will probably export a million barrels of shale oil a day by next year- a third of Japanese imports- and will produce 3 million barrels a day by 2017.  Unsurprisingly, many companies are lining in the US for export approvals, which, by the way, cost them about a hundred million dollars a pop in administration, engineering consultancy, legal and environmental fees. Amongst them is a company owned jointly by an oil major and Qatar- a country much in the news for being a leader in funding the Islamic State.

Qatar is a US ally that produces the cheapest gas in the world. Given that instability and war in the Middle East always raises oil and gas prices internationally, Qatar’s behaviour of running with the hares and hunting with the hounds is understandable, if smelly. But I am sure that the oil majors and their political backers will simply write this off as just a conflict of interest.


September 25, 2014

The ECDIS abyss

Much maritime legislation is ill thought out, poorly planned and haphazardly implemented, and ends up an anaemic shadow of its projected self. The mandatory carriage of ECDIS- which comes into force, on tankers, less than ten months from now- is going the same languorous way. 

A combination of poor legislation, foot dragging by ship owners, poor understanding and commitment by navigators and their true to form total reliance on far from perfect electronic systems- that have been abysmally introduced by people who have little idea of bridge watchkeeping in congested waters today- has already resulted in quite a few accidents that are attributed to the ECDIS and its use. By the looks of things, we will have many more before we are done with this game.

Not to speak of the fact that the industry has not even begun to factor in the recurring costs of upkeep, even periodic renewal, of the ECDIS system itself. Captain Charis Kanellopoulos- Superintendent of Mare Maritime, which has been running ECDIS on its ships for six years, writes, “We would all consider a five year old cell phone or computer as outdated! Why does the same principle not apply to such a critical piece of equipment like ECDIS?”  He thinks that there is a very real possibility that ECDIS equipment will need to be renewed every 5 years, and that “a company might have to spend more than 50 percent of the total equipment installation cost in repairs” within that time. 

This, when shipowners are shying away from installing the equipment in the first place! The United Kingdom Hydrographic Office (UKHO) said recently that the majority of ships in the global tanker fleet have yet to adopt ECDIS, which will become mandatory for them on the first of July next year. Over 8,500 tankers will be required to comply by then, but the UKHO says that as much as 58% of these ships ‘do not yet use an ENC service’- a euphemism used, I guess, for ‘no ECDIS installed.’ This means that, the next ten months will see about 5000 ships hastily buying and plugging in ECDIS systems and subjecting their navigators to the (often substandard) generic and type specific training required, and then unleashing these folk on the world’s waterways and oceans. The term ‘computer game’ comes to mind, except that you don’t get three lives at sea.  

Unsurprisingly, then, the UK’s Marine Accident Investigation Branch (MAIB) has attributed yet another incident, that of the chemical tanker Ovit grounding in the Dover Strait, to the poor use of ECDIS. This is the third such grounding connected with ECDIS, MAIB has said. 

The vessel ran aground on the Varne Bank because the navigating officer was following the ECDIS route which passed directly over Varne (!) and which had been “planned by an inexperienced and unsupervised junior officer and was not checked by the Master before departure or by the officer of the watch at the start of his watch”. (This officer’s situational awareness was so poor, by the way, that it took him 19 minutes to realise that the ship was aground.)

So you have at least two officers and a Master that were incompetent, in this case. But what about shore VTIS systems? Dover Coastguard, that has a system and procedure for warning ships approaching the Varne Bank, could not act “as the coastguard watch officer was unqualified, unsupervised and distracted,” MAIB says. Clearly, it is not just the systems and people aboard ships that are not doing what they are supposed to do. 

Other MAIB findings in the Ovit case show that the ship’s position was monitored solely against the intended track shown on the ECDIS; that Varne’s navigational marks “were seen by not acted upon”; that the scale of the ECDIS chart was “inappropriate”; that the ECDIS audible alarm on the ship did not work, and that the Master and deck officers were “unable to use the system effectively.”

MAIB Chief Inspector Steve Clinch recommends improvements to existing systems. “Unfortunately, the current generation of ECDIS systems, though certified as complying with regulatory requirements, can be operated at a very low level of functionality and with key safety features disabled or circumvented,” he has said.

All of which hardly inspires confidence in the ECDIS circus, does it? 

I think there is a good case for postponing the 2015 ECDIS deadline for tankers. We are obviously unprepared. Everybody- navigators, Captains, manufacturers, regulators and managers- is immersed in issues of cost, training, regulations and installation logistics connected with ECDIS. The absolute and dangerous reliance on electronic systems is not something new, and is only increasing. Owners want to keep ECDIS costs down, manufacturers want to sell approved equipment and ENC services and navigators want to just sit through training that is poorly conceived and abysmally (and often corruptly) implemented.

In this contest, nobody has apparently realised that the ECDIS is a safety-critical piece of equipment. Nobody has realised, apparently, that this is not a game.