Now that 2014 is here, the same well regarded shipping pundits that were forecasting, less than a year ago, a revival in industry fortunes this year have quietly postponed that event to the future. I know that trying to talk markets up is not unique to shipping, and, since tomorrow never comes, this may seem a good strategy; the only negative being the complete erosion of credibility in these so-called forecasts amongst those who remember.
I suspect that continuing new shipbuilding orders on top of existing overtonnaging and upcoming regulatory financial burdens will make the recovery, whenever it comes, quite brittle. Meanwhile, as everybody struggles to make the bottom line blue instead of red, Drewry Maritime Research has published a report saying that operators have kept overall operating cost increases down to something between 1 and 3 per cent last year. Manning cost increases have been kept below 2% and non-core assets are being sold, the report adds. What it does not say, of course, is how much skimping is being done in shipboard maintenance, how much safety is being compromised or how much crews are being squeezed- wage and work wise- to keep costs down.
John Green of the seafarer welfare charity Apostleship of the Sea says that cost-cutting is adding to stress on seafarers, whose working lives have been ‘dramatically affected.’ He says that many more seamen are now not being paid or are suffering, in silence and in fear of being blacklisted, from poor employment practices.
The problem for sailing seamen is that they do not usually have access, in real time, to how bad things are in any particular recession. In any case, shipping keeps its skeletons well hidden; although seamen know that ill-treatment of crews is far more common than is ever acknowledged, they have no reliable means of finding out exactly which shipmanager or shipowner is doing what to which crew. The ILO does maintain a list of ships with abandoned seafarers but that seems incomplete. In any case, abandonment is just one of the employment abuses seamen are exposed to.
So seamen try to keep themselves informed using anecdotal evidence and rumour, a situation unchanged since the eighties.’ In this internet age, there should be a better way of doing this; perhaps seamen’s welfare organisations should share information on dodgy shipowners and shipmanagers and post it on a common website, since the commercial part of the industry isn’t going to do it.
Another thing the industry isn’t going to do is raise crew wages in a hurry, even when it can finally- hopefully- afford to do so. I fear that shipping is looking at a squeezed future long-term, and that hoping that a cyclical industry will soon see a repeat of the boom years is folly. I say this because increasing regulatory costs- especially environmental- are here to stay, because freight rates will remain under pressure and because shipping will probably look at increased maintenance and insurance costs because crews of the near future will be less able and less experienced.
For existing seamen, especially from Asia, things are going to get tougher. With consumer inflation historically running at near double digits in both the Philippines and India, for example, a seaman is likely to see his savings eroded and his retirement lifestyle under immense pressure if his wages don’t keep pace with the rising cost of living. I have written about this earlier, so I will only point out again that my generation of seamen survived because the dollar went up more than seven times versus the Indian rupee during the period that we were sailing. I would not bet on the same thing happening again over the next few decades, recent Indian Rupee weakness notwithstanding.
Particularly badly hit will be those seamen who do not have the inclination or the calibre to seek alternate careers ashore. An earlier generation of seamen- mine included- could think of both quitting sailing and staying away from soul destroying ‘office jobs.’ That is going to be increasingly difficult in future, if not downright impossible, especially if people want to come ashore earlier. The few who go out to sea to escape the rat race today may find that they are forced into it when they are older.
And those who do seek careers in shipping ashore will see, in India at least, greater numbers of ex-seamen competing for a reducing number of shore jobs. Some will quit shipping altogether, as they do today, and move on to other industries. The ones at the bottom of the food chain will be the hardest hit as usual.
Barring the few that are looking for a different working lifestyle in India, the profession is already shunned by anybody worthwhile. Body shopping outfits- which is what many of our agencies really are- will continue to prey on the unsuspecting for as long as they can; India has a huge population and we like to believe our ‘demographic dividend’ will continue to feed the mill, come what may.
But demographic dividends only apply if large numbers of people are willing, able and qualified. And they do not apply if the ability of a profession to financially sustain an individual long-term becomes a question mark.