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.

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Watching the dust

Karvan guzar gaya, gubaar dekte rahe- Neeraj

(The caravan passed, we just kept on watching its dust)

A new survey of shipowners and managers by Moore Stephens says that the expectation is that lube costs will rise the maximum- about 2.8% a year- within operating costs. The next biggest increase will be in crew wages- 2.3 per cent this year and 2.4 per cent in 2013.

One respondent claimed, “The biggest single factor in operating cost increases these days is the scarcity of Filipino and Chinese seamen.” An unremarkable statement, perhaps, except for the confirmation of the fact- long forecast by some of us- that the Chinese seafarer will seriously threaten his shaky Indian counterpart sooner rather than later. Has that time arrived? Is that statement being echoed by enough managers out there? Is the Indian seafarer not even fit to be mentioned in the same breath as his Filipino or even (gasp) Chinese colleague? Is the Indian mariner not even a serious contender anymore?

Ignoring for a moment the contradictory propensities of the average shipowner, who wants -above all else- cheap but competent crews happy to serve long contracts, statements excluding Indian seamen from a company’s long term plans are becoming less guarded and more commonplace. Sure, shipowners who have their eggs- figuratively speaking, of course- in different manning nationality baskets do not want to antagonise or panic any one nationality by indicating preferences or trends; they will continue to proclaim their commitment to Indian mariner right up to the time that they show him the door. 

To be fair, many managers have, both privately and publicly, expressed severe reservations about the competence, attitude and cost effectiveness of increasingly substandard Indian officers and crews currently coming out of the Indian seafarer factory. I share their angst, but I do not absolve them of culpability in the dismal state of affairs. The decline- or decimation, more accurately-  of the Indian seafarer’s  has more to do with the corruption and complete disarray within the country’s maritime establishment- both in government and the private sector- than with the motivation or seriousness of the youngsters entering the profession. Or even the lack of professionalism shown by more established seafarers, whether officers or crew.

Synchronicity of events cannot be avoided, and neither can be managed completely the paradoxical demand for higher numbers of competent crews that exists today in a market that is otherwise haemorrhaging. The thing is that, despite high demolition activity, the supply of new tonnage will continue to flow for some time to come. Newbuildings will continue to be bigger, more complex, greener, more fuel efficient and technologically more advanced, and environmental regulation will increase. All this will mean an almost exponential increase in demand for greater numbers of more competent, better educated and better trained officers and crews.   

Given the overriding proclivity of the average shipowner to seek cheap crews, it becomes clear to me that something has to give in this matrix; in any case, the notion that higher wages always lead to higher competence is fallacious.

Within all these contradictions lies a window of opportunity for the Indian seafarer, that is provided the country’s maritime establishment- government, private sector employers and MET setups- get their act together, weed out corruption and regain focus. The Indian mariner proved, not that long ago, that he is capable of handling evolving technology. That he is cost-efficient. That he can be motivated and professional. That he can make money for the shipowner, and that his wages are justified.

He can well prove this again, but the decaying establishment has to stop getting in his way.

That window of opportunity is small, though, mainly because the Chinese have not yet focused on marketing their seafarers to the extent that they could have. They have internal issues, sure- including local industry demand, language difficulties and circumspection on the part of many youngsters about working abroad at sea. But all this can change quickly. In fact, in China, with its authoritarian form of government by diktat, this can change very quickly indeed. When it does, if China gets even half as efficient as the Philippine seafarer factory- riddled with problems as it is- that window will slam shut in the Indian mariner’s face. 

The caravan will have passed and we will be left watching the dust.

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Crying wolf

Funny things are happening out there. For some reason, marine officer shortage stories have started circulating once again. No numbers are being pulled out of the hat so far, except tentatively- unlike the rubbish we heard up to two or three years ago- but the game is afoot again. You know, the old one where the shipping industry slyly cries wolf to swell the ranks of contractually paid seafarers, most of whom remain underemployed or unemployed. The industry doesn't have to pay these daily wage earners, so bloating the pool has always been to its advantage. Foxy, and I do not mean Megan Foxy.

So we are retold the old shibboleths once again with a straight face. The Baltic and International Maritime Council (BIMCO), says one tale, "sees an annual increase of 2.3 percent in the number of ships of the world’s fleet. This means a steady annual increase in the demand for seafarers to man these ships".

Another story from the Philippines says, half accurately, "The Philippine manning sector must step up its recruitment of competent Filipino officers, as the global maritime community is still reeling for officer shortage." From where I stand, the only people doing any reeling are the community of jobless or underemployed first-time seafarers. 

"The manning sector estimates that the Philippines will need to produce about 24,206 new officers by 2015 or an equivalent of 4,841 per year." the story continues.

Even China, the country that I think will benefit the most from the global economic shakedown in the long run, with shipowners and shipyards both growing enormously- never mind the present dreary situation - does not seem to be able to resist the game. "Senior officer shortages in China have become serious, numbering more than 50,000 vacancies," we are told, because- surprise, surprise- the social status of seamen is not high and the career is still believed not to be safe.

I don't take these fairy tales seriously, because I doubt the integrity and motives of the cry wolf brigade. They speak with a forked tongue even when they speak the truth. For example, the issue of seafarer competence is a good one to raise, and I whole-heartedly agree with anybody who says that there is a shortage of competent officers today and that it will worsen with time, unaddressed as it is. The problem is that many of those who raise it today- administrators and regulators, in particular- were tasked with implementing or overseeing maritime training in the first place. That they now obliquely bring up their own incompetence is bad enough; what is worse is that they have no plans to change themselves in the future. The problem is always somewhere else.

Some countries are thinking the right thoughts, at least. Nini Lanto of the Pre-employment Services of Philippine Overseas Employment Administration (POEA) wants to replace retiring European and Japanese seafarers with his compatriots. Philippines has already, thanks to some European pressure, begun to do something about the competence of its seafarers and the problems with its MET assembly line. Overall, it appears to be well positioned with seafaring still an attractive proposition for many.

Besides the Philippines, seafarer numbers have grown in the last six or seven years in regions as diverse as China, Indonesia, Canada and Scandinavia, although some of this growth is insignificant in terms of numbers that are not large enough to make a decent dent in global industry requirements. Maersk is looking at Angolan seafarers, and many are looking at greater numbers out of Africa or Eastern Europe- maybe even parts of Southern and Western Europe too, given the job pressures there today. Some are talking once again of luring women into the profession; call me chauvinistic, but I would hate the women in my family working in a profession that is hostile enough for us men.

The Indian MET setup is in singular disarray in all this. Much hand wringing and soul searching goes on but the systemic paralysis continues. Consequently, India is making it easy for others to take away from its global seafarer market share, low as it is; it has not even begun to address the issues that caused the crisis. For the life of me, I cannot see how India can produce- unless it overhauls the entire system- sufficient numbers of competent officers for the future. Jobs for Indian junior officers are rapidly dwindling. It is just a question of time before good senior Indian officers are threatened with extinction, for where will the experienced come from if junior officers are throttled?

Meanwhile, let us forget about spewing out creative seafarer shortage numbers. In any case, shipping does not have the competence to produce believable numbers without ending up with egg on its face- one has to just look at the figures that were bandied about five years ago to know that. Even for the serious analyst, there are simply too many variables here - demolition activity, overtonnaging, high order books and individual company plans are just some of them. Shipping has never played the numbers game with any accuracy- the last forty years bear testimony to that.

Instead, the game will go the way it always has- based on short-term supply and demand. Individual companies will factor in planned growth and look to meet their requirements a year or two down the line. A few owners from China may flag out if the manpower shortage gets too bad. Seafarer competence will become a bigger and bigger issue -bigger and more complex ships, overregulation and increasing environmental concerns will ensure that. The global economy will recover in one year or ten- or it will find a new level at which to stagnate. More people will want to join and sail or not, and that will determine wages in part. Decisions will be made, as they always have been - on short term considerations.

This is a fluid game, not a static one. This is a chess game with many opponents instead of one. The way shipping is organised now, it is an exercise in futility to try to produce seafarer shortage numbers for even five years down the line. That is a job for the bored or the idle. Or the manipulative.

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Burying the ass in the well

Every year, the first working day of July- today, as it turns out- is when the second batch of the six-month GP Ratings Pre-Sea course commences for the year across India. Unfortunately, the run up to the last two batches- including the present one, where the story still has to play out- has been anything but smooth. The acrimony, confusion and finger pointing between the regulators on one hand- the Directorate General of Shipping and its authorised body, the Board of Examinations for Seafarers Trust (BES) - and maritime training institutes on the other seems to be increasing, the largest bone of contention being a shortfall- through a BES controlled All India Common Entrance Test (CET) - in intake. The situation is complicated by the fact that the MET institutes cannot afford to antagonise the DGS beyond a point, subject as they are to the approval and audit regime of the regulator.  This didn't stop some of them from going to court last time, though.

The smaller problem is that everybody- including seemingly secondary players like managers and shipowners- is right, in their narrow-minded way; one has sadly come to expect such self-centred killing of the golden egg laying goose as a given in the industry. The bigger problem is that everything everybody- without exception- is doing is guaranteed, unless things are changed quickly, to destroy the seafaring profession. Because they are looking at numbers instead of quality of graduates- the only thing that will make Indians preferred employees with shipowners. Because they are looking at short-term profit instead of sustainable growth.  Because corruption and middlemen have taken over the game.

The last DG, Mr Agnihotri, made no secret about his opinion- valid, in my view- that too many in the MET establishment were profiteering instead of making a profit. The MET establishment- somewhat understandably- says that the infrastructure and faculty conditions of the DGS are such that costs are high. The first CET  last year (a series of CETs, actually) did not produce enough numbers to fill all the DGS approved seats across the country; this resulted in great confusion around the new year, with some institutes going to court and, based on the ruling (later reversed), taking in trainees all on their own. The DGS came down on this practice later. In any case, many institutes blamed the BES for the poor calibre of entrants- including some CET failures who were allowed to join. They also claimed- somewhat disingenuously, considering that touts were feeding the institutes, which they still do, through the CET apparatus- that they were able to get much better calibre of students earlier, and much higher numbers too. Other abrasive issues included high fees being charged by some institutes, which the BES claimed make them automatically less preferred. Some institutes said that a CET was not necessary, given that the BES was already controlling standards through the Exit Examination - written, practical and oral- being conducted by them for every graduating batch.

Of course, the elephant in the room was always the 'placement' issue- the organisation of the first on-board berth for graduates- which brings us to the story of the present batch. At the time of writing this, indications are that many institutes are up in arms because many of their seats remain unfilled after the CET. Indications are - though I can hardly be sure- that CET failures will not be accommodated this time around, and the last batch resultant 'management quota' is not an option, given court rulings and the hesitance from MET setups to go against the DGS wishes.

The placement issue is an old story; the twist today is that the regulatory and commercial arms of the industry are openly acknowledging what everybody has known for years- that graduates, even toppers from the Exit Examinations, are simply not finding any jobs without paying people sitting in shipowners' or shipmanagers' offices. These include more than a few Master Mariners, by the way, who seem to have graduated to becoming professional touts today. The bogey of 'agents' or middlemen that many of us raise is a red herring, therefore; after all, those agents are bribing people in those offices to give graduates a job.

While Indian shipowners refuse to fulfil their statutory responsibility (in some cases), training institutes are being held responsible for the no-job scenario. On the street, nobody is talking about raising standards of Indian seafarers or excellence at the MET level; training institutes just want to fill up their seats. Nobody is talking anymore about raising Indian seafarer market share to 9 percent- a figure some clueless management consultancy outfit threw at the shipping establishment a couple of years ago, and which was quickly digested without a single thing being done to make it happen. Instead, the commercial industry and the regulators are both clamouring for a reduction in intake- even zero intake, some of them are saying.

I have a sneaking suspicion that the shortfall in the present batch of GP Ratings is a managed affair. Somebody may have decided, in the corridors of power, that it is better to have some MET institutes shut down instead of producing people who do not get jobs. Unfortunately, this is the wrong end of the stick. It is also a vicious circle that will result in a further downward spiral in standards- squeezing the training establishment may well result in a fee war that will eventually guarantee this, as institutes bleed, some of them to death.

Right now everybody is covering their behinds. The blame game is on; everybody is protecting their own interests. Everybody is behaving like the farmer whose donkey fell in the well and who decided that it wasn't worthwhile getting the ass out since he was old and useless, and so decided to bury him there instead- alive. That is what the industry is doing to the profession, make no mistake.

Anyway, if I can complete the parable about the donkey. The farmer, having made the decision to bury the guy, grabbed a shovel and began to throw dirt onto the donkey in the well. After howling for sometime, the donkey became quiet, desperately thinking about survival. What he then started doing was simple- he would shake off each shovel of dirt and- as it built up in the well- take a step up. The farmer, shovelling away, was amazed when the donkey, having reached the edge of the well, happily trotted off.

The simple minded will say that there is a moral to this- when life shovels dirt on you, shake it off and take a step up- never ever give up. I am sure the preachers- of which they are many in our fraternity- will advertise this course of action as the best in our present predicament. They will point to the donkey for inspiration without doing anything else.

Actually, I like a different ending to the story. In that parable, the donkey, after trotting away from the well, becomes very angry at the farmer's betrayal. Enraged, he runs back and bites the farmer- no prizes for guessing where. The bite gets infected and the farmer dies of sepsis.

Moral of the alternative story? When you do something stupid, and then try to cover your ass, it always comes back to bite you.

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