Indian Ratings: Common Entrance Test travails

As I write this around Christmas, a Common Entrance Examination for Indian Ratings for the batch scheduled to start just a week later- on January 2, 2012- has just been held. Or should I say has been held yet again, for this is the third CET that the Board of Examination For Seafarers Trust (BES) has conducted since September for the same batch. (One could quote Goldfinger from Ian Fleming and say, "Once is happenstance. Twice is coincidence. The third time its enemy action," but that may be somewhat uncharitable). Whatever, the confusion, fear and suspicion the first ever series of CETs have created in the maritime training establishment in the country have, so far, nullified any advantages that the new system was supposed to usher in.

The reason for all these CETs is simple: shortage of applicants and a misreading of the effort required to promote the course. (I also wonder, given the sample question papers put up on the BES website, how many applicants were actually successful. I can tell you from experience that many typical entrants would not have been able to answer many of the science- and even English language- questions asked.) And, although the post examination system- especially the allotment of entrants to different institutes- has not been transparent, my rough calculations assume that there was a countrywide shortfall of anything between 5-700 candidates after the second CET was held in November, if all the seats in the country's Directorate General of Shipping approved institutes were to be filled. That is something like a 20% to 30% shortfall; not a small number.

Predictably, many institutes are very worried. Some- where the shortfall is 50% of their capacity or even more, based on the November CET- are obviously more worried than others are. They claim that demand surely exists, as they have been filling up seats in previous batches before the CET. Then there have been whispered stories about some of the candidates who have passed the CET being unable to even fill up a form when they land up at the institutes- their English is insufficient. Allegations, also, of 'union approved' candidates passing the CET. Confusion since some cleared candidates failed their medical tests at the institutes subsequently, or held dubious academic record documents. Confusion with candidates who had opted for certain institutes being allotted others instead. Quiet questions as to how certain institutes have had all their seats filled up while others have had just a few candidates show up. Declarations by the odd institute that they would fill up their seats under a 'management quota' system, since they stand to lose a fortune if they run the course with just a few CET approved candidates. Rumours that the DGS is using the CET to reduce overall intake of Ratings, given the terrible record of post-training sea berth 'placements' in the industry. Protests that the institutes alone can do little to address this problem on their own- it is shipowners that can provide sea berths, not MET institutes, they point out.

All the confusion and suspicion has vitiated the atmosphere somewhat, in my opinion- something that can hardly be good for training. To be fair, while there have been problems with the conduct of the CET- admit card delays and other teething issues, for a start- these issues can be easily improved in time with a little experience. In addition, making the process transparent in future will go a long way towards addressing most of the other concerns to do with the conduct of the CET and the allocation of successful candidates to institutes.

Many grievances of the MET establishments are not without merit. However, they conveniently ignore some of their own shortcomings and malpractices. For example, question on the ethics of using middlemen to fill up seats in previous batches remain unmentioned when they talk of the 'demand' having been hitherto sufficient to fill up all their seats. So, too, with the widespread practice of false-selling courses by painting a rosy picture of the industry and employment opportunities post training when the truth is quite the opposite. Some training institutes misdeclare the fees they actually charge to the DGS, indirectly misleading students who are disseminated this information at the CET; others cut corners and nickel-and-dime trainees at every opportunity post admission. And, while I agree that the placement of GP Rating graduates should not be the responsibility of MET institutes, they should not be allowed to claim, to the Ratings, fictitious records of past placements either, or use meaningless phrases like '100 percent placement assistance' in their advertising. Or indeed, allowed to be conduits for placements made conditional to a Rating paying a hefty bribe to a third party.

In the end, however, this leaf storm of shortcomings- whether of the CET or the institutes- will settle sooner rather than later, if only because maritime institutes are in no position to antagonise the DGS beyond a point. And, while I agree that the targeting of institutes for the shortcomings of the industry seems unfair, all this is finally a sideshow.

For there is an elephant in the room nobody has yet deemed fit to ask this two-part question: Given the fact that hardly any rating can get a sea berth without bribery or connections today, and given that there is an extremely low demand for Indian ratings anyway, is the Directorate General of Shipping obliged to guarantee to any maritime training institute that even a single seat of their DG approved Pre-Sea Ratings course will be filled in future? Is the first responsibility of the DG to the MET institutes or to the hapless Ratings who are trained- and cannot be 'placed'?

The answer to that question will tell us a lot about the future of MET in this country, our plans to increase seafarer market share- and, indeed, the viability of training in India. Because I cannot see people investing money in institutes in future- in an era of market or regulator driven uncertainty- if some of the present ones shut down for lack of demand, or for any other reason. And I cannot see demand for Indian seamen rising- not for the next few years, at least.

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A maritime Christmas carol: "Something must be done"

They have taken another ship hostage in the Gulf of Aden,

(Industry chorus: Something must be done, something must be done),

But hey, we make more from piracy than those Somali highwaymen,

This wonderful show must go on.

They are torturing our crews for months on end!

(Industry chorus: Something must be done, something must be done),

Fortunately they are all Third World Seamen,

This is how the West was won.

We will take five years to orchestrate a response since

(Industry chorus: Something must be done, something must be done),

And when the music becomes noise, we will not wince

Do we have anything personally at stake? Anyone?

What about the insurance costs, my friend?

(Industry chorus: Something must be done, something must be done),

Hell, the consumer will pay in the end,

with all due surcharges under the sun

The crew have been working for days without a break,

(Industry chorus: Something must be done, something must be done),

Meanwhile, tell them to change their rest periods to fake

those time sheets, I want them redone!

Another accident because of fatigue, it is said,

(Industry chorus: Something must be done, something must be done),

This Registry's manning certificate doesn't deserve to be read!

Psst- switch our ships to this Flag anon.

They have arrested the Captain for no reason again,

(Industry chorus: Something must be done, something must be done),

Stop paying his wages and if he complains

Tell him his contract is undone.

That Class surveyor is saying that this ship is unsafe!

(Industry chorus: Something must be done, something must be done),

Get an interim cert and get out of this place,

The next port is less bothersome.

The ITF crew-wage raid is all over the place!

(Industry chorus: Something must be done, something must be done),

Pay the cash, sail the ship and manage the disgrace

then get the money back from the seamen- or blacklist those sons.

The crew with no shore leave for weeks are half dead

(Industry chorus: Something must be done, something must be done),

Tell them to cooperate and bend till they break,

P& I will pay for that one.

Our ship's been detained with an old magic pipe!

(Industry chorus: Something must be done, something must be done),

But why are your pants on fire tonight?

Claim 'error of servant' - the Chief's the felon

Clerical work is out of control across the fleet,

(Industry chorus: Something must be done, something must be done),

But these new checklists must be filled in all neat

Remember, they apply- in triplicate-  to everyone.

The crew are demanding their wages, what cheek!

(Industry chorus: Something must be done, something must be done),

Pay them a quarter and let them temporarily hold their peace,

With a hundred ships, we sit on millions every month.

The oily water seperator is again on the blink,

(Industry chorus: Something must be done, something must be done),

Sail out quietly and report it later, methinks

Pretend it went kaput on the run

That Captain will not sail with a hole below the waterline ,

(Industry chorus: Something must be done, something must be done),

The man is really a big pain in the behind

Look for a reliever at once!

Ashore we have got fat year end  bonuses again but

on our ships (something must be done, something must be done)

Let them eat cake and send them an email saying,

"Merry Christmas, everyone!!!"

Coming up: shipping's hunt for green crews

The last thirty years have seen a revolution in the wheelhouse. The next thirty, I suspect, will change our engine rooms forever. However, this change will be more complicated, I think, and will require a lot more preparedness and considerably better management of resources than shipping seems to be capable of. I also suspect that the calibre, certification and training of our engineers will be called into question when this revolution takes place- as happened in the wheelhouse revolution, with question marks raised about the competence of deck officers.

Before the eighties, wheelhouse equipment was basic and often unreliable. A weak radar, a stuttering 2182 receiver, often manual steering, an inaccurate DF and a cranky VHF just about covered everything at a watch keeper's disposal. A ship with Loran was considered advanced. The introduction of new navigational equipment- advanced Radars, ARPA- even reliable VHFs- was followed by the SatNav first and then the GPS. Later we saw GMDSS systems and satellite linked computer terminals.

Each of these developments- as with the AIS later, and now, ECDIS- was accompanied by training that was usually poorly thought out, improperly planned and implemented- and, in the end, substandard. Even so, training needed to cover only the regulatory and operational aspects of bridge equipment- repair or maintenance was largely beyond a ship's scope. Even today, repair of bridge equipment is usually a replacement of PCBs - or that of the entire unit. 

The results of the bridge revolution have been pretty bleak as far as competence goes: two decades or so after ARPA was first introduced, large numbers of our certified officers are still unable to properly interpret ARPA findings, understand the system's limitations or even operate a radar optimally or properly. Large numbers of our officers, used to plotting GPS positions mechanically, seem unaware of the basic corrections that need to be applied before plotting a GPS readout on a Mercator chart. All have done GMDSS courses, but many- even most- are effectively GMDSS illiterate. Shipping has not shown itself to be very good at managing competency during technological change, I am afraid.

I am not trying to say that engine rooms of merchant ships have not seen technological advancement; of course they have. Much new equipment has been added. Advanced control and automation systems, shaft generators, bow thrusters, new MARPOL related OWS equipment, fresh water generators and incinerators are just a few examples. Efficiencies of marine engines, control systems and auxillary machinery have undergone much innovation. Nonetheless- and this is what I am saying- the basic means of propulsion has remained the conventional main engine, and advancements here have been innovative, not revolutionary. That revolution will come soon, I believe. I believe that we are at the cusp of a revolution in marine propulsion today.

The process may have already begun and will only accelerate exponentially with time. Concerns for the environment and regulatory changes may have started the movement away from fossil fuels, but more and more shipowners will realise that the cost savings of alternate energy- wind, solar or whatever else- are enormous, and will make the difference between profitability and bankruptcy. Natural gas is being touted as the next big thing, but I think that- longer term- the use of LNG for propulsion will be intermediary or supplementary at best. In any case, we are going to see, in the near future, more and more ships with dual fuel engines, skysails, solar cells and massive power UPS banks. Or technologies we have not even thought of yet.

There is no if here; it is just a question of when. I for one think that this will happen sooner rather than later, with environmental and cost advantages driving the revolution. I also think that shipowners who do not change to cleaner and cheaper technologies will be found out in the market, unable to compete with those who do.

All of which brings me to the million dollar questions: from where will we get the seamen and officers to operate and maintain this new equipment? How and when will changes to competency syllabi be introduced? Who will train crews in new- maybe even one off- technology? Where is the thought process to do so? Where are the resources?

The propulsion revolution will be more complicated for the main reason that- unlike the wheelhouse revolution that we managed badly anyway- it will not be enough for crews to know how to operate the machinery; they should be able to repair it on the run too, or at least until they make it to the next port. The thing is that these new systems will be, well, new. They will also be more complex and automated. Operating them properly will require greater thinking and lesser hammer and spanner banging. Repairing these new systems will require an even greater understanding. 

We do not have these crews to do this today, so- at some stage- shipping will have to start producing them. The first problem, when we start to do so, will be an old one- the often substandard calibre of fresh intake. As an example, it is hard to imagine that our officers can master new technology easily when their basic arithmetic and science skills are highly suspect. 

The second problem is proper training. Examination issues aside (competency paperwork will follow the market, I think), the second problem is easier, in a way, because it is a simple question of resources. As the deluge of maritime educational institutes shows, resources are not the problem. This time around, however, the industry has to find a way to make training effective and pertinent; our failures during the wheelhouse revolution should help us identify what all we did wrong. 

We need to start thinking out how to do this soon, I think; we probably have a couple of years to walk through the process and get things moving. Don't take too long, though; I am willing to wager that countries that first get their ducks in a row here- and execute new-technology training professionally- will steal a near unassailable lead over those that dither. The thing to remember is that everybody is starting from scratch here. Traditional supply countries like India and the Philippines can hardly afford to take things for granted, especially since their MET systems are in a bit of a mess anyway.  

In any case, both these countries have no research and development capabilities in green technologies to speak of; they remain, at best, body-shopping geographies for conventional shipping. Europe does have those capabilities, so imagine what will happen if a significantly greater number of Europeans come out to sea- a real possibility in these tough economic times. Imagine what will happen if China decides to put a billion dollars- in its usually single minded way- behind a research project into green maritime technologies that will also train a new breed of officers and crews for the future. 

These threats are real, and so are the opportunities. There is still time, but the planning has to start soon and execution must follow. Countries that continue with a business as usual philosophy will fall by the wayside in the race for green crews, because the future will be here sooner than they think.

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Blood on the sea: the impending shakeout in shipping.

Those in the container trade are calling it a consolidation; looks more like a shakeout to me. 

Soon after industry leader A.P. Moeller-Maersk merged some of its Asia to Europe services saying that it was prepared to outlast the competition in difficult times, news came in last week that the second and third largest container companies in the world- Mediterranean Shipping Co. and CMA CGM- have entered into a vessel-sharing agreement that will cover routes from Asia to Europe, Africa and South America. CMA CGM and MSC obviously feel that this is the best way to fight Maersk in the marketplace.

The hope, in the beginning of 2011, that the box trade would stage a recovery by winter or even by early next year has evaporated completely today. Instead, freight rates for the China-Europe box trade - by value, the biggest route- have fallen by almost 40 percent in the last three and a half months. The reasons for the crisis are well known- years of overcapacity ending in falling markets amidst a global economic collapse can only result in disaster. What is lesser appreciated is the fact that even today, when shipowners are trying every trick in the book to survive, too many container newbuilding orders are- inexplicably, seemingly suicidally- being executed. 

An estimated 2.5 million TEU of capacity may be added to the box fleet in the next couple of years, including a large proportion of around-8,000TEU tonnage. These orders were placed starting the summer of 2010. Amongst others, Maersk (20 18,000-TEU ships), NOL (10  14,000-TEU) and OOIL (10 13,000-TEU) are contributing to this glut of deliveries that will hit the market around 2013, give or take. Singapore based Island Shipbrokers says that the demand growth in the container trade is around 5% while fleet growth could reach 8-9%,  resulting in an additional capacity-demand mismatch. Container tonnage is not reducing; it is increasing, that too at a time when freight rates are slated to be under continued pressure for the next year or more.

Something has to give.

Some things already have. Last week, Malaysia's largest shipowner MISC pulled out all 16 of its container ships from what it said was a bleak market- after three consecutive years of losses totalling US$789 million. The sudden exit will cost the company another $400 million, MISC says, pointing out that market conditions are "challenging the validity of today’s operating models".

The strategy of the big boys in the container industry seems to be to shift to bigger and bigger ships to take advantages of economies of scale and also- in the case of newbuilds- greater fuel efficiency. Merge routes (maybe even merge companies later?) and services. Increase or maintain market share at almost any cost. Use your size and cutthroat pricing to dominate. Hold back supply cuts. Squeeze weaker players. Be the last man standing. Above all, outlast. Outlast. 

There are obviously no guarantees that this strategy will work- sometimes, as shipping as seen before, there is a thin line between the philosophy of 'too big to fail' and 'the bigger they are, the harder they fall.' Regardless, the outlast strategy will guarantee one thing for sure- the shakeout of smaller players from the market. This is inevitable. MISC could take a billion dollar hit and survive; many others will simply fold with much lower stakes, especially at a time when sources of capital are drying up for the industry.

Incidentally, the CMA CGM collaboration with MSC may be the beginning of such relationships in other sectors too. John Plumbe, the CEO of London based shipbrokers ACM Shipping said last week that owners of at least a hundred of the world’s largest oil tankers must form a combined fleet and sell their services jointly to raise depressed freight rates. Plumbe, a 37-year tanker-broker veteran, said, “There are some advantages for owners to consolidate for a short period of time. In order to have any real effect on freight rates in the VLCC market, you need a pool of a minimum of 100 ships, as there is a fleet of 600 trading.”

Seen in the backdrop of recent troubles in tanker businesses- General Maritime's bankruptcy, news reports of Frontline possibly running out of cash to pay its debts and Torm talking to creditors to restructure its own debt of around 1.8 billion dollars, this course of action may make sense. I wonder, though, whether the pockets of even the biggest in the industry- whether container or tanker or whatever operators - are deep enough to wage what appears to be a very expensive war of attrition, even if there appears to be little other choice. 

With enough resources, one can win the game of outlast, I guess. Alternatively, one can end up just cutting off one's nose to spite one's face.  

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Inside Indian shipping: A few good men

Some of the sound bites coming from India's maritime regulator in connection with marine education and training are interesting; I particularly liked the comment made some time ago by the Director General of Shipping that maritime training institutes should make a profit and not look to profiteering. Absolutely correct. The recent Directorate General of Shipping (DG) decision to issue a Continuous Discharge Certificate with a reduced two year validity to graduates of some maritime programmes suggests that there are teeth behind the bite too; with this step, the DGS wants to track better the 'placement record' of institutes, or more accurately, the lack thereof. We all know that placement is a flourishing racket in shipping.

Maritime training institutes will quite correctly point out that it is only ship owners that can provide training slots, not the institutes, and that the regulations and incentives rolled out by the DGS for Indian ship owners have failed in what they set out to do: create training slots for future officers and crews. I agree with these institutes, because things have reached such a sorry state that even officials in well known shipping companies- not just touts and middlemen- are taking bribes to 'place' youngsters, most of whom will never get a training berth aboard a ship without paying a fair amount of money to somebody or the other. The racket is an epidemic; most everybody is involved.

It is very possible that Dr. Agnihotri- the present DG- has plans that include a holistic addressing of the problems that plague the training business, and that the Directorate has just started- not ended- its cleanup move. Cynics will say that some of the DGS' initiatives are prompted by the recent ESMA visit to Mumbai or the crackdown on the MET business in the Philippines; I say that is irrelevant to the fact that the Indian MET juggernaut is in a mess and needs to be fixed- in our own interests.

But it will not be. It won't be because- in addition to deep flaws in our training setup- there are also weaknesses connected to the structure and execution of shipping's administrative and regulatory systems. Those need to be fixed too, else any clean-up exercise will be eventually incomplete and so ineffective.

The biggest weakness is in the very nature of the Director General's appointment; in line with protocol, the DG is transferred every few years and a fresh appointment made. The problem is that any person at the top of any government setup in India can only start to do good within this time; to complete a change requires time that he or she usually does not have. Changes to regulations in shipping may be mandated and quicker, but changes to a system- including the internal systems at the DGS- will take much longer.  We have to give any person of integrity, intelligence and ability enough time to perform.  We do not, so we always produce a half baked dish.

In this connection, I have never been one of those that say that only a mariner should be at the helm of affairs at the DGS. I say that the best person for the job should be appointed and retained based on performance. There have been many mariners within the DGS and MMD; at least some of those have either not delivered or have been otherwise less than suitable. The Indian system, like the British one, assumes that a transfer every few years ensures a clean system. It does not; we know that. Only an honest person at the helm - given enough time- can do that.

Coming back to the MET issues that we started with, what is likely to happen is this: The unsavoury elements that the DGS is trying to eliminate from the training space will wait it out, knowing that the next routine change at the top at the DGS will mean that a new person comes in, takes time to settle and prioritise- and that the system will then start reinventing the wheel again, more or less from scratch. Meanwhile, these elements will continue to exploit the cracks. 

I am saddened by this, because I do believe that the DG - at least with regard to maritime education- is on the right track. I agree that the MET business needs a cleanup. I believe that the on board training arm of our MET is its weakest link and a travesty. I would like to see the net cast wider than on just the DNS programmes and their 'placements' done thus far, to include all programmes for cadets, ratings and even shorter STCW courses. I believe we should not be training anyone that we cannot guarantee an on-board training berth to. 

Many in the industry often say that no education in the world guarantees a job, so why should we in shipping want to do so? They conveniently forget the fact that a training berth on a ship is not a job; by definition, it is part of the training that the industry is supposed to provide.

To be fair, the problems at the DGS are not unique; government departments throughout the country have near identical issues. Ultimately, the basic problem everywhere- including at the DGS- may be that the system does not support progress. The bad people do a lot of long lasting harm in their allotted few years and go; the good people can only start to do good in that time, not complete it. The good guys' reward may lie in walking away with integrity and with their heads held high, but imagine the change we would see if the system could exploit the full potential of these few good men and women.