December 31, 2009

Future Shock

An entertaining Chief Officer I sailed with long ago (the same one who put up a checklist in his cabin for going to the loo, starting with opening the door and ending with spraying air freshener) had a theory about international trade.  After a couple of months of carrying steel products into Thailand from elsewhere and then carrying other identical steel products out of Thailand to the same elsewhere, he said that merchant shipping would become superfluous as soon as people realised what was being produced next door.

I was reminded of that statement as I read conflicting reports recently: reports that made me wonder if shipping experts really had any clue of what was going on in their own backyards. All their studies bore on the dry cargo and tanker oversupply situation that is supposed to either hit freight rates badly or not affect them much in the next couple of years, depending on which expert one listens to. As many ships are on order as there are afloat now in the dry cargo market, one says. En masse cancellations are likely, says another. But orders made to greenfield shipyards don't count, says a third, pointing out that those shipyards themselves may now never be built because capital has dried up. Only twenty percent of the order book will actually be delivered, another analyst says with suspiciously remarkable accuracy, considering that nobody seems to have any remotely accurate system that would give numbers of how many vessels will finally be spewed out through the pipeline.

Whatever the experts say, it is clear to anybody that there are simply too many ships around today for the cargo on offer, and that this mismatch between demand and supply will not vanish next Monday. This is because when freight rate graphs were hitting the roof, many owners extrapolated those graphs to infinity, got excited access to the easy credit sloshing around the system and bought or ordered ships greedily like there was no tomorrow. Unfortunately, tomorrow is now here.

To compound the usual myopia, everybody forgot that it is not easy to get rid of assets when markets crash, especially large assets like ships. They even forgot that shipowning is a long term commitment and that shipping has always been a cyclical industry. The chickens have come home to roost now. To make matters worse, the last couple of months have seen fuel prices rising, more than doubling since last December. This has hit shipowners even as they struggle to dodge the sword of Damocles- tonnage in the pipeline over the next two years- hanging over their heads.

Notwithstanding the spike in rates from the second half of October that have relieved those that look for green shoots with magnifying glasses, it seems to me that things are obviously going to get worse before they get better. There may be periodic glimmers of hope, like temporary or calculated Chinese demand (again) spiking rates for a while before they drift down, or the hope that trade will improve with better than expected figures now coming out of the US economy. Freight or hire rates in different sectors may be out of sync for awhile, like what has happened with tanker rates recently as compared to bulk carrier ones. Let’s ignore box ships for now; they have been particular casualties in this mayhem. One of the same experts predicts that container companies are going to lose 20 billion US dollars this year. The fact that a record 11.7 percent of the box ship fleet is presently idle and that the containership segment will grow just 6 percent in 2009, the lowest growth rate in the last decade, speaks for itself. The same analysts expect the idle fleet size to peak by February 2010 before easing, though what will happen to the 1.8 million TEU scheduled for 2010 delivery is anybody’s guess; one can be quite sure that deliveries will be deferred wherever possible). 

But here's the thing: Whether things get better or worse in the short term, we in the maritime industry have so far been used to the surety that the long term will surely be to our advantage. That may well be true this time around too; at least all the experts seem to think so. However, I suggest that the industry could do well to factor in a couple of particular caveats into their plans this time.

The first one is actually more a paradigm shift than a caution: With the Chinese economy rivalling the US one, (some voices are already saying that it is globally the more important one of the two) there will be, inevitably, a shift in the kind of tonnage required in the future, Chinese (and even Indian or Brazilian) demand being of a different nature than that from the US. The requirement of more raw material carriage, for example.

It would be simpler if this was merely a matter of shipowners adjusting the kind of ships they buy and operate, which is what they have always done as they react to demand and supply. However, it may require greater nimbleness this time around, because I have a sneaking suspicion that US consumption will remain slow even after their economy recovers. I suspect that we have already seen the heydays of American consumerist prodigality: there will be much that the US just cannot afford now, and some scales may have well fallen off some eyes. If this happens, it will inevitably put pressure on Chinese exports, with a result that overall trade between the two behemoths may well remain sluggish. Of course, other developing countries, including India, may well pick up the slack. Regardless, shipowners will have to react to these developments with much greater agility; they may even have to predict the developments better to take full advantage of the opportunities; paradigm shifts demand this.

The second caveat is that the industry will have to factor in, much sooner than they think, one new heading under costs into their business plans. Let’s call this heading ‘Environmental Costs’; included will be many new headings of expenses including expenses related to shifting to cleaner and greener fuels and new ballast water treatment requirements.  The costs involved in both are likely to be worryingly steep. All of us know about the high costs for cleaner fuel, of course, but those who think that ballast water treatment will not be all that expensive need to think again. As an example, US laws in the pipeline will require what the American Waterways Association, a trade body, calls “extremely expensive ballast water treatment systems” to be installed on board.

Of course, there will be, probably justifiably, no let up in pressure on the maritime industries to do more to protect the environment. ‘Environmental Costs’ will keep on rising as new regulations we cannot even envisage now are enacted across the world; Shipping will not be left alone much longer, confusion after Copenhagen notwithstanding. Unfortunately, going greener costs money and impacts shipowner profitability.  If bottomlines are squeezed beyond a point, freight rates will be pressurised northwards. Is the global consumer prepared to pay more for just about everything yet?



December 28, 2009

Kafka's people

 'The persistence of  Memory' by Salvador Dali

Surreal, that's what this is.

Don't laugh, but the Philippines Department of Labour and Employment reportedly announced last week that an antipiracy course would now be part of the requirements for all Filipino seafarers. DOLE Secretary Marianito Roque told reporters that the training would be provided to about 260,000 Filipino seafarers. Roque went on to claim that this would also help the department to “increase the level of qualification of the capacity of a seafarer.” and that individual companies are to pay for the training.

Hmm.  Did he really say more than a quarter of a million Filipino seafarers? Mind boggling, the implications of that figure. Sounds like a multimillion dollar business opportunity for somebody, running antipiracy courses. Multiply 260,000 by even 150 dollars as course fee and you get around four million dollars. Hell, that is the ransom payout for a couple of ships. And what, pray, will the course content consist of? Let me guess: a module on 'how to recognise a rocket propelled grenade launcher while crapping in your pants', perhaps? Another module on how to plead for your life in basic Somali? Or how to fill up an ‘ideal hostage’ checklist? Something like that, I presume.

Here's what I think.  One, how soon will India ape this Filipino absurdity? (Our stalwarts must be cursing that the Philippines beat them to it). Two, everybody seems to have given up on actually fighting Somali piracy and winning. Three, everybody and his mother in law in maritime education will want a piece of this new lucrative business opportunity. Four, shipowners may try to use the 'trained antipiracy crew on our ships' claptrap as a marketing tool with prospective charterers or to reduce piracy insurance premia. Five, the seafarer will continue to get jacked and hijacked. Six, this training will be used as an excuse not to take other steps that may actually be effective. Seven, any dimwit will tell you that this will go the ISPS way so why is this nonsense even being pursued at all? Eight, an Indian manager will say, soon enough, that Filipino's make better crew because they are anti piracy trained: I think that is approximately when I will throw up.

As for “increase the level of qualification of the capacity of a seafarer,” I have seen hundreds of Filipino seafarers reporting to me with joining papers and photocopies of course certificates as thick as dictionaries and qualifications that look impressive as hell on paper. Few live up to what the dictionary suggests. I expect this antipiracy hokum to be even worse, because it is more unreal.

My wife will say that I am jealous because everybody else is making money, and maybe she will be right. I really need to get with the program, I think, which is why I now propose some new courses that we in India should start asap. We are the global leaders in conducting futile courses; how dare somebody else vie for that hallowed spot?

So, with much thought and without much further ado, I propose that the following courses be rolled out immediately in India. (I have thoughts on many others that I will divulge to interested parties on payment of a small fee):

Garbage Management Course: This approved course will teach seafarers how to pick up, segregate and collect garbage for disposal as per the rules. Included will be modules on shallow breathing techniques while carrying putrefying stuff, computer based training on stencilling 200 litre drums with approved labels and practicals on new brooms sweeping clean. Not included will be training on the disposal of management, regulatory or other official garbage of any kind; that will make the duration of the course too long.

An anti criminalisation course: This one will train seafarers in one of the most critical aspects of their profession, and I am therefore surprised nobody has thought of it so far. From making seafarers aware of the latest rules that are supposed to guarantee them fair treatment, the course will move (quickly, before anybody asks too many questions) to other modules like ‘Keeping a stiff upper lip while being blamed for nothing and everything’, “Keeping mum under pressure”, ‘Approved daily routines in gaol’, ‘Checklists for Alcatraz’, ‘Involuntarily extending contracts’, ‘ Appreciating local cuisine behind bars’, a long module on ‘What not to expect from employers after being arrested’ and  a very short one on ‘What to expect from the Government of India when ditto’. Others may include operational and Company specific training on ‘Reporting from the slammer” and ‘Proven CYA techniques’. This course will be approved by the Administration. Anybody asking ‘What administration?’ will be thrown into jail at once.

Finally, to complete my Kafkaesque soliloquy and business plan, I am seriously contemplating patenting and rolling out a postgraduate management course for the shore based maritime industry. This two year full time course will target international and national regulators, industry body representatives, shipowners and miscellaneous shipmanagement, insurance and such personnel. Incidentally, I plan to collaborate with a premier management institute in India to ensure excellent content, infrastructure, delivery and hype. Details will be announced later, but the working title for the degree that will be awarded on satisfactory completion of the programme, mainly because I like the acronym this makes, is ‘MBA (Shipping Hypocrisy In Toto)’.

A midterm internship is compulsory, and will require that each student demonstrate that he or she has shafted a mariner at least once.


December 17, 2009

On not boiling the frog

A stray remark on email by a batchmate a few weeks ago took me back to the time, long ago, when I broke the news to the folks at home that I had been selected for pre sea training and I was ready to roll. "Dufferin? Or Duffer, in?!", my sister asked gleefully, while both my parents were more than a little dismayed that their son who was doing well academically seemed to be throwing it all away.

Today, a few decades later, there does not seem any point in examining if that decision was indeed 'disastrous', as the friend of mine indicated in that troublesome email (anything that makes me think is troublesome).  No point, really, which is precisely why I pondered the question over a shot or two of tequila and a lot of lime.

All those years ago, there was no doubt in my mind that seafaring was the career for me, and a long term one at that. So much so that I chose not to go to the US, where my father was posted for a while, and continued my apprenticeship instead.  Years later, I was chuffed to have done well at the Institute of Chartered Shipbrokers exams- that I appeared at before I sat for my Masters. I toyed idly with moving ashore at the time; I even throttled myself in a necktie and went for an interview or two. In the end, I turned down an offer that, in retrospect, would have had me,  twenty years or so later today, probably a mover or shaker (or both) in the industry, had I wanted to embrace the rat race with both sleeves of my navy blue blazer.  (Okay, okay, maybe not a M&S, but a stirrer, at least.)

 Was it a wise decision or a foolish one? Probably both. In my defence, I have to say that what tipped the balance for me then was that the money at sea was good, the life even better and I was not ready for the nine to five managementspeak grind then. Or even now.

Soon thereafter, I decided that I would sail only three months at a time and six months or so a year: just enough for income tax purposes. This was in the late eighties, when three month contracts were impossible to come by, but I got lucky, and remained lucky for the next nine years, segueing briefly to do a Cargo Superintendent's job for the same employers who were in Singapore. Later, just after the luck ran out, and just when I was contemplating the future came an offer from a US software company with no connection to shipping. I stayed there for two years.

Looking back, I can see that my working life has been unplanned and eclectic; I have done more or less what took my fancy at every stage of my life. Would I have made more money sticking to just one thing, a well planned career path? Absolutely. Would I have enjoyed my life more that way? Absolutely not.  Even today, as I do a jumble of things that keep it interesting and put some bread on the table and tequila in the bar, I like to keep things interesting. Boredom, or tedium, is death.

This, concisely, is the wonderful and unobvious advantage of seafaring; it gives an average middle class bloke like me the ability to- more or less- live life on his own terms. One can work when one wants and for how long with no huge future employability handicaps. One can even change careers for a while and return after a year or three without any major eyebrow raising from prospective employers. One can even take a year off to contemplate one's navel. The flexibility a sailor has in his life is unbelievable, really, and one that most other professions would envy, if they only knew about it.  (We should package this advantage and sell it to potential recruits).

Most people do not have this flexibility. They join jobs they don't like and get stuck there, buying into the game that says that one must be King Rat asap; however,  I , for one, never wanted to be any kind of rat at all. Living with ennui, so many- including in shipping, at sea or afloat- reconcile themselves to their circumstances and fate.  Their working life seems to follow the 'Boiling the Frog' premise: the surety that , if a frog is thrown into boiling water it will jump out immediately, but if it is placed in cold water that is slowly heated to be a boil, it will happily agree to be cooked to death.  So, we train ourselves to immerse ourselves in tedium that slowly boils our souls. Many of us are caught in the rut and forget that money is just a means to an end, not the end itself.

I escaped that trap, sort of. And therefore, all said and done, I don't think my decision to go to sea was disastrous; of course, my working life  could, like most decisions,  be tweaked and much bettered by hindsight. And, although it is impossible that my batchmate's circumstances- or dreams- have been identical to mine, I hope he took some advantage, as I did, of the flexibility that was his for the taking.  There is no real need, in most cases, for us sailors to be the frog in the cauldron; our profession gives us the freedom to be neither a boiled frog nor a treadmill rat.


December 10, 2009

Smells like Team Spirit

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man." George Bernard Shaw

I will be the first to proclaim that a ship cannot function effectively- even safely- unless each crewmember is part of an effective team; anybody who claims otherwise is delusional or neurotic.  The requirement that the Master, officers and crew gel as a unit increases with every passing day. Ships and their gear get  more complex, MIS systems and regulations more elaborate and complements increasingly threadbare: if everybody doesn’t hang together they will probably hang separately.

There is, also, no satisfaction greater than the one a Master gets when the ship runs like a well oiled machine, with every crewmember anticipating the next operation and performing it almost before he is ordered to do so. This is especially gratifying when one is calling a port a day and when everybody is stretched to their mental and physical limits all the time.

I will also confess that the term “Team Spirit”, especially when uttered by a management type with an evangelical gleam in his eye, often grates in my ears like the sound of a broken piece of chalk on a cracked blackboard. This is because that term is used too often to straitjacket somebody into conformity or to imply that a person that rocks the boat is undesirable. At sea and in shipmanagement, the message sent out is that such a crewmember is not kosher.

I beg to differ. For one, the world of seafaring has traditionally-even typically- been one for iconoclasts; hell, even the choice of profession indicates a nonconformist mindset. Then, the nature of contractual employment furthers an attitude, in both the sailor as well as the shipowner, that there is no real long term team beyond the one on the present ship. Much as managers would like to ensure a sense of belonging with the company and essentially gain permanent employees on contractual wages, everybody knows that a sailor not being recalled for the next contract will usually not even merit a phone call to him.  What team, then, besides the shipboard one?

There are other, more practical, reasons for my objection to the misuse of the term that is perverted ashore as much as it is afloat and across industries too: suggesting that conformity is good kills initiative, out of the box thinking and promotes a desire not to stand out and instead continue to be part of the herd. This is actually detrimental to the quick and intuitive thinking required in the innumerable operations performed at sea today. At a time when an escalating number of significant tasks are being performed by individual crewmembers with little or no supervision, this can be counterproductive: how often do we see officers and crew scared to take the initiative simply because they are unduly concerned about what their seniors will think of them?

Unfortunately, many managers think of an individualistic personality as one that is not really desirable. He is not a team player, they say. What they actually mean is that they do not like such a person because he will probably be a no nonsense type, not too docile and therefore not easily exploitable. He has to be handled with more care than others are: he can be a ‘troublemaker’ (another one of those words that imply everything and mean nothing.)

Managers should realise, instead, that although what they fear may have some basis to it on a stray occasion, such a seaman is generally more likely to be efficient, professional and a leader. Critically, he is also more likely to have professional pride. I say critically because any seafarer, whether an officer or a rating, works best when he works for his professional pride.  A lower level of performance is enough for him to retain his job, but the chances are higher that this kind of personality- not a team player by any conventional account- will perform far beyond average because he is proud of his professionalism. The team player will usually conform to mediocrity instead, like most people.

I like nonconformists for another reason: they are more colourful and make for shipmates that are more interesting.  They have different points of view, both in work related stuff and otherwise, and are not hesitant to put their views forward. As a Master, I relished the idea of us finding better ways of doing the same things: a poor team player has usually helped me make better judgements; a good team player has usually just agreed with me.

That is because a bad team player, as the term is understood today, is not a yes man, thank God. Yes men give me ulcers.


Poor Ratings

Those were the days of old ships with union purchases, preventer guys, hatch boards and manual non powered steering: labour intensive rack and pinion stuff. Ropework and splicing were weekly affairs. Crew complements were around 55 then, when I was a cadet: there were so many people on board that we had, sometimes, three galleys: one each for officers, deck and engine crew.

We learnt almost all our seamanship from the old salts in Scindias, the company I was apprenticed to: Sukhanis, Cassabs, Serangs and Seamen/Helmsmen. Many were Gujaratis; most did not speak much English but were, I now realise, excellent seamen. I particularly remember one Ramesh Tandel, and one Mukhtar, both of whom taught me a lot, and did so unselfishly. Later, I completed my sea time, moved on and forget all these seamen who had imparted skills to me that must have been learnt by their ancestors thousands of years ago, before the era of Lothal not far from their homes.

We officers failed those seamen, because we clambered on to higher things on their shoulders and forgot about them. The industry failed these seamen, because it did not take enough pride in their heritage and support them; some would have made excellent officers. Even worse, all of us fail their descendents even today, as we fail the thousands of new entrants who train as Ratings in our many training institutes across the country.

There are two main reasons for this. One, we are fixated on officer shortages, for some reason, and ignore the ratings market. And two, we have taken for granted that Indian ratings will never be able to compete with Filipinos: the reasons given are many, but the main ones, as we all know, are to do with the English language, work attitudes and the fact that the Filipino seaman is willing to be exploited more in comparison to the Indian one, whether it be in terms of living conditions or duration of contracts.  

Pardon my French, but the second reason is pure hogwash. I have sailed with many, many Filipinos right through my professional life, and, like any other nationality, there are, amongst them, good workers and bad workers, troublemakers and excellent professionals. They may have longer contracts but many sit through them placidly and with low initiative, the same as many Indians do.  As for salaries, coastal ships and dhows from India to the Middle East are replete with Indian ratings earning a fraction of what a Filipino earns on an ocean going merchant ship. The canard that Indian ratings have priced themselves out of the market must be killed once and for all.  As for the exploitation thing, are we seriously saying that unless Indian seamen are willing to be exploited there is no future for them? Because if we are, I say let us shut down our shops and go home: at least I do not need to make a living sucking other seafarers’ blood.

The fact is that we have done precious little for any seafarers, whether officers or ratings. However, officers have slowly carved a place out for themselves in the global market, and body shopping agencies flourished as soon as this was seen to be happening. This did not really occur on quite the same scale in the case of ratings, for many reasons.

Familiarity with English is another matter altogether, and I agree that largely the Filipino is much more familiar with basic English, including basic marine vocabulary, than is the Indian seaman. However, I submit that this is an issue that can be fixed quite easily, by simply increasing the weightage of the language at the Pre Sea selection level and adding an English language examination at the end of the Pre Sea course conducted by the Board of Examinations for Seafarers Trust. Let there be a minimum standard of English for freshers (actually, there is one but the system is very imperfectly followed for commercial reasons by institutes).

After admission to the course, the onus of ensuring a decent standard of English in our trainees should fall on both the training institute and the BES. This is hardly difficult; after all, we are a country producing a zillion call centre ready employees a year complete with accents to order. Surely we can ensure basic English skills in our seafarers?

Talking to a class of GP Ratings the other day, I found that there are children of pan shop owners in the batch. Also those of farmers and fishermen, small tailors and shopkeepers, army jawans and government clerks and everything in between.  It is worthwhile keeping these profiles in mind while we ponder exactly what kind of English teaching may be required. We in India have a habit of teaching Shakespeare when all we require is Chetan Bhagat.   

From figures given out by BES, India produces more than 4600 GP Ratings annually from 34 DGS approved institutes.  The Board says the main concern is the employment of trainees that pass out, and is trying to compile data from industry inputs. Although the BES effort is laudable, the fact that we do not have these figures easily available is in itself indicative of the neglected state of our ratings; I bet the Philippines Overseas Employment Administration (POEA) has these figures a mouse click away. I bet China has a more focused manpower plan when it comes to its growing fleet. 

It is another national shame that many of our ratings who want to get ahead will go abroad to get their certificates of competency. There is something pathetic about us allowing this to happen; the fact that, English language skills or not, our seamen are forced to go abroad and spend a fortune there instead of appearing cheaply at home is appalling in itself. A comprehensive solution is urgently required.

In any case, there is no point in training seafarers if we cannot provide them decent jobs. The government and the industry are really doing nothing about this, barring one or two exceptions. Inertia, lethargy, callousness- call it what you will, but unless the administration and the industry can persuade Indian and foreign shipping to employ Indian ratings in greater numbers, we should feel morally bound to reduce the capacity of Maritime Training Institutes, not increase it. As things stand today, Indian ratings are hostage to a foreign language, unsupported by everybody that matters and more or less standing and falling on their own. It is time we changed that. Maritime training is a business, sure, but it doesn’t have to be only business.

Changing things is hardly impossible. Get the best people you can and train them properly (including in English language skills. Perhaps institutes should be asked to arrange extra language classes during the Pre Sea training course for those that require them). Provide them jobs at the end of the training. Make policies that encourage personal growth, competency certification in India included.  Let these ratings go out to sea and make a name for themselves and India, as we officers started doing not all that long ago.

Just do this much, and you will have a sustainable model. Do not do even this, and you will produce many more Mukhtars: excellent seamen with no future, all of them staring into the abyss.