June 26, 2014

Hashtag mess- the bane of the seafarer.

The IMO’s press release in the run up to the ‘Day of the Seafarer’ is an exercise in rambling self-indulgence and desperate hashtag activism. I also question the motives behind this annual attempt that asks- pleads with- society to value seamen; a plea should be directed at the shipping industry first anyway. 

“Every year, June 25th is celebrated globally as the Day of the Seafarer, an official United Nations observance day,” the IMO reminds us. “This year, once again, the IMO is asking people everywhere to show their appreciation, through social media, for seafarers and their contribution to global prosperity”.  The IMO then asks everyone to complete the sentence- “Seafarers brought me….” and post it on Twitter and Facebook, adding the hashtag “#thankyouseafarers”.  Probably to help the juvenile part of the audience that is buying this deceitful and trite campaign, the missing word in that sentence can be anything that came by sea. There is also an ‘exciting’ virtual wall somewhere on IMO’s website where people will write down the things that seafarers brought them and which they value the most. 

Most seamen will say that the IMO works first to further the cause of the shore based part of the shipping industry; seamen’s interests- even their basic rights- come a very poor second. To then use the seafarer to evoke sympathy for the industry- or empathy with it, which is what the IMO campaign is really about- is disingenuous, even specious. The fact is also that the industry does not have a human face that it can present to the world (mainly because it does not want to spend the money to do so); seamen are the industry’s face, or so it thinks. I find it offensive that my ‘face’ is being used- without my consent or approval- by a UN organisation in this cynical bait-and-switch way. 

I am not sure that it is the IMOs job to extort sympathy or empathy from the general public. Its job is mainly regulatory. If it is really concerned about seamen, a day or a week spent pulling them out of the woodwork and parading them on social media will not cut the mustard. By the way, do we have any numbers on how much is being spent every year on this ‘Day of the Seafarer’ exercise, and what, if anything is the pay off? 

 Perhaps the IMO should concentrate more on its day job, including the breaches of basic safety regulations that occur every day on many, many ships around the world-instead. Perhaps it should concentrate on ensuring that seamen’s basic rights- including those that are now claimed to be enshrined in the MLC- are actually delivered. Perhaps it should persuade shipping to value its seafarers before it asks the general public to do so.

The IMO’s use of the social media to create sympathy for- or awareness about- shipping reveals that the industry has run out of ideas. And, leaving my distaste for Twitter and Facebook aside, social media is hardly the place for in depth analysis of anything; it is a very hopeful quick fix. The problems of shipping- especially its seamen- cannot be solved in 140 characters or less. They cannot be solved by an annual feel-good event that nobody, within or without the industry, really cares about. Hoopla is no substitute for substance. 

Many of you will tell me, hey! The IMO is not looking to solve any problems with this campaign, so why are you making this fuss?  And what is the harm if they try to create awareness- or evoke empathy for the industry- even if it involves using seamen as bait?

No harm, I guess. If only I could get rid of the distasteful feeling I have in my mouth, I am sure everything would be just fine.


June 21, 2014

Winning the battle but…

The boxship segment of shipping is at the cusp of a vicious churn. And overcapacity, low rates, alliances and continued newbuild orders will ensure that the shakeout will continue, probably for years. 

Since I have often said that a consolidation was inevitable, I kind of get where operators are going. What I do not get, however, is how the players who survive the bloodbath are going to get a decent and long term return on their investment. And I am still to understand how long- and to what extent- containership owners are going to continue to bleed before the mayhem stabilises. I suspect it will be a slow death for many.

Recent events do not hold out much hope; in fact, the battle promises to become even bloodier. Brokers are expecting a new wave of fresh ordering of 14000-19,000 TEU ships later this year, as the G6 alliance of operators beefs up capacity to respond to the P3 alliance in an era where economies of scale seem to be the only bow in the quiver. I guess these ships will be out in the next two or three years. What this will do to longer term overcapacity issues is anybody’s guess; many- including Maersk’s Nils Andersen- do not expect the excess tonnage problem to be resolved before 2017 anyway.

Even after the recent Chinese spanner that was thrown in the P3 works, I feel that alliances like the P3 and the G6 will be even more dominant forces in times to come. These folk are betting on big ships and cost efficiencies- Maersk alone hopes to cut its costs by around a billion dollars every year- but I suspect this is not going to be enough. Big ships need more slots to be filled on a round-trip basis. With demand fickle and weak, this is a particularly tough area to predict or exploit. A large boxship running below breakeven capacity does not give you any advantages of scale; quite the contrary.

I suspect that, if operators cannot increase rates in the next couple of years, then the only solution- alliances or not, large containerships or not- is going to involve scrapping of ships on a large scale. I say this because there is a limit to cost cutting and because I suspect that shipowners are already cutting close to the bone.

Scrapping of ships may be the solution long term, but the dismantling of large scale overcapacity is a hornet’s nest in any industry; with shipping, fragmented as it is, it is an especially messy proposition. Many shipowners are just not going to- at least not yet- dismantle ships that have not reached the age of retirement. Besides anything else, they will probably be booking huge losses if they do so.

Which brings me to another million dollar question: Given the state of the market, has the working life of containerships reduced dramatically? Imagine the massive, massive impact to the entire business model if it has. 



June 19, 2014

Deja Boo.

It must be that that time of the decade once again; after approximately five years, stories about future officer shortages are starting to resurface once again. Coming up next, no doubt, will be masterfully written documents on what shipping must do to fill this presumed gap. These documents will, in the end, be useless, because shipping will only do again what it has always done- find the cheapest way to man its ships.

Drewry has recently published its “Manning 2014 Annual Report”, which says that the present assumed shortfall of 19,000 officers (where has the number come from? Are hundreds of ships laid up because they can’t meet minimum manning requirements??) will rise to almost 22,000 in three years. Perhaps because the report caters to an industry that is focused- to the point of obsession-on cost cutting, Drewry MD Nigel Gardiner said, “Manning costs look set to come under renewed upward pressure, putting a further squeeze on profitability unless owners are able to push freight rates higher." Particularly hit, the report adds, will be specialised vessels like LNGs. The availability of senior engineers across segments, shorter tours and ‘increased benefits’ to seamen (which ones??) are said to be other issues of concern to ship owners.

(Somebody should really compile statistics- in India, at least- of all those who have paid through their noses for Pre Sea training and have not been able to secure an on-board training berth for years. This is how we are gearing up for that presumed officer shortage.)

Here’s what I wrote a couple of years ago in this same column- “In 2009, a manning report put out by a leading British consultancy said that there would be a shortage of 33000 officers at sea in that year, and that this figure would reach 42700 by 2013. This despite the fact that, months earlier, the worst financial crisis since the Great Depression had already hit us”.  

Deja Boo! (A term I just coined. It means: trying to scare somebody with a story he has heard before.)

As far as I am concerned, all such reports are suspect and- more importantly- eventually useless. Alarming officer shortage statistics were put out from about 2005 onwards; the numbers seemed to rise every month. If the industry actually believed those reports, it should have been employing and training tens of thousands of future officers. Since it did nothing of the sort, then the inference I make is that either it did not believe such reports or that it believed them but did not see a problem because it had its usual Plan A all ready and fired up- find cheaper officers and/or reduce manning levels. 

Besides, these officer shortage tales, however well-intentioned or well compiled they may be, end up feeding a complex system of continuing fraud that is perpetuated- in India at least- against those who want to go out to sea. Training establishments will quote, once again, huge ‘officer shortage’ statistics to lure the innocent. Many officials in ownership or management firms will continue to take money under the table in return for putting these cadets out at sea. And, the low calibre, poor language and low motivation of many of these cadets will continue to guarantee that they never will make good officers- even if squeeze through their competency exams.

That is a point often forgotten in the numbers game; that the industry needs efficient and motivated officers, not just certified warm bodies. As things stand, only owners or management setups that train cadets and absorb all of them in their fleets have a chance in hell of achieving this.

Of course there is no shortage of ratings, and analysts will have us believe that the International Bargaining Forum (IBF, made up of the ITF and the maritime employers’ Joint Negotiation Group) works well to ensure that wages are well-negotiated and decent supply is continued. The same IBF has just concluded an agreement for three years, by the way; ratings’ wages will rise at a princely rate of 1% in 2015, 2% in 2016 and 3.5% in 2017.

In any other industry, a proposal for such a niggardly wage increment would cause hysterical reactions, but not in shipping. Here, it is survival of the cheapest and to hell with the seamen. We will worry about the risk that low quality of manpower poses later. Perhaps we can meet in Geneva or Bali to discuss this.

So beware seamen and wannabe seamen. Incompetent or malevolent statistics that-to quote myself again, sorry- “promote the myth and try to flood the market with mariners that ship owners will not pay an extra dime for” should be taken with a big pinch of sea-salt. 

The industry does not have to pay surplus officers anything if they sit at home jobless. Pushing the story of seafarer shortage is, therefore, to its advantage and to your detriment.


June 12, 2014

Exodus without end

By now, the European Union must be very worried that the deluge of boat people making it to Italy shows no sign of abating. In fact, the alarming and exponential acceleration in refugee numbers this year should ring alarm bells even in the minds of the most liberal and pro-immigrant left wingers in Europe. Leaving the humanitarian crisis aside for a moment, the flood of people poses a serious security risk; many of them come from countries that are flush with extremists. 

In just one 24 hour period last month, 3000 refugees reached Italy. So far this year, nearly 40,000 migrants have done so –the number for the whole of last year was 43,000.  Hundreds, if not thousands, have died making the crossing, usually heading usually for the island of Lampedusa or the coast of Sicily. Thousands more will cross over in summer, as the weather improves; around 300,000 wannabe migrants are said to be waiting in Libya, Tunisia and elsewhere- a future described by an observer as ‘an exodus without end’.

To add to the mess, Libya is acting tough and threatening to flood the Mediterranean with even more boat people. Says Interior minister Salah Mazek: "I'm warning the world and Europe in particular – if they do not assume their responsibilities, Libya could facilitate the transit of this flood." By responsibilities, he means, of course, money for Libya.

Although many of the refugees are Egyptians, Syrians and Eritreans, West Africans, Somalis, Afghani, Bangladeshi and Pakistani refugees- or economic migrants, hard to tell which is which- make up sizeable numbers. They set off in rickety boats, paying anywhere between 1500-2500 USD for the passage (the higher amount gets you space on deck and perhaps a tarpaulin, 1500 consigns you to the hold and certain death if the dilapidated boat goes down), buying lifejacket facilities for 200 USD a piece (no money, no lifejacket), besides food, water (100 USD) and satellite phone use (200 USD). Everything has a price.

The ruthless ‘people smugglers’ make up to a million Euros on each leaky boat they put out- crammed to the bulwarks with migrants- on conditions that have been compared to the 19th century slave trade. And their margins are rising; for example, they are now saving on fuel, putting out boats with not enough fuel to make the crossing. Why? Because they expect the Italian navy to come and pick up the refugees. I doubt they care if those poor souls live or die anyway.

Europe has reason to be concerned. Some of these migrants- particularly asylum seekers- have, by now, spread out across countries like France and Germany, albeit in small numbers. The last three years may well have seen roughly a quarter of a million migrants pouring into Italy; it has to be assumed that a significant number of these will be released, after some kind of processing, into the EU. The pressures- economic, cultural and political- of this inundation will be severe. And the possibility that criminal gangs or terrorists will have used this human pipeline to infiltrate target societies is real. People coming from war torn countries pose particular problems, especially to countries like Germany that grant some refugee status.

Shipping has reason to be concerned too. Hundreds of human trafficking boats take to the water from the North African coast every year today. I am sure a bunch of guys is sitting in a cave somewhere trying to work out how easy it would be for a small boat laden with explosives to set out from the same shores- unregulated and chaotic as they are, thanks to the Arab Spring’s aftermath- and blow up a tanker or two in the confined Mediterranean. Repeat of the 2002-Limberg attack off Aden, you know.

There have been plots to do this before, including in the Straits of Gibraltar. And any sailor who has sailed in those waters will tell you how easy something like this would be and how easily maritime security can be compromised today in the Mediterranean because of the exodus without end. 


June 05, 2014

Warping the priorities of Command.

A Chief Officer on the verge of his first Command wanted to talk to me last week. He was understandably a little anxious about handling the responsibility and sounded me out on some of his concerns.

I was left with a feeling of considerable dismay at the end of a two hour conversation. Not because the man had many fears, but because all his concerns, without exception, centred on issues like PSC inspections, vettings, paperwork, reports, the ISM system and other (his words, not mine) ‘management issues’.  Not once did he seek input on the critical parts of a Shipmaster’s job; he seemed to have no apprehensions about ship handling or those critical decisions connected with safety that are solely a Captain’s responsibility. ‘Management issues’- to me, piffling in comparison- were all consuming.

The other thing that struck me was how fearful he was of everybody- his employers and outside inspectors included.  Even commercial inspections terrorised him; my giving him some of my better experiences with, for example, the US Coast Guard, did nothing to help. I had to tell him, finally, that it was a sinking ship that was catastrophe; failing a Port State Control inspection was not. I don’t think he got that.

This is one the problems with shipping’s obsession with the word ‘management’- we have made timorous administrators out of our seamen. Our compulsive fixation on at-sea paperwork and administration has resulted in a dangerous shift of priorities. The tail is now wagging the dog.

Everybody is a product of the system, so I will not comment on whether this Chief Officer is fit, in my opinion, for Command or not (Besides, he may read this!). It appears to me, nonetheless, that the system has degraded itself. Maybe too many making decisions ashore have too little seagoing experience and maybe people ashore believe that the sleight of mouth that works in shore offices works at sea too. Whatever it is, too many seamen are buying the idea- the idea that on ships, management is more important than seamanship.

The fixation on ‘management’ is not just about the shift away from critical priorities. I have seen first-hand how managers use administrative systems as weapons against crews. I have seen officers and Masters slowly co-opted into a half belief that the part of decision making that belongs on board is actually some kind of collaborative exercise between managers and Captains. Of course, managers are quick to point out that the Master has ‘overriding responsibility’, but maybe many Masters today need to be reminded of more than that. Maybe they also need to be reminded that the buck stops with them and that there is no collective responsibility at sea and neither is there much collective decision making. Maybe they need to be reminded that managing a problem is different from fixing it.

In my defence, though, I did remind this Chief Officer of all that. I did speak to him about what I felt were important things, of which there were many that were not on his agenda. I tried to do my bit.

I also told him in the end that I felt that one of a Captain’s biggest qualities was the ability to tell his employers, especially if they pressurised him on critical safety issues, to take a hike.  This attitude went hand in hand with knowing your job, I told him. In fact, it was part of the job, the ability to tell people to take a hike. I confess the term I actually used was far more direct and far more profane, but what the hell. Communication is all about getting your point across, isn’t it?