Covid-19 and its impact on shipping #3: Crew change
Covid-19 has had a profound impact on the world’s supply chains in terms of availability, manufacturing, and transportation of various goods. The shipping industry on a whole has – with notable exceptions such as the cruise and car carrier industries – managed to hold up remarkably well. Or perhaps it is not so remarkable as the world keeps moving and international shipping industry is responsible for the carriage of around 90% of world trade.
As countries have locked down, reopened and locked down again, the importance of trade between those places where goods can be produced and the places where goods are consumed, has never been greater. Such trade is completely dependent on the world’s merchant fleet of around 50,000 vessels trading internationally, and in turn by the crew manning and operating those vessels. If there ever was an essential worker, it is the seafarer.
Unfortunately there is a big disconnect between on the one hand the importance, and on the other hand the treatment of seafarers during the ongoing pandemic. A great number of seafarers have not had the opportunity to disembark their vessel upon expiry of their contract, and have instead had to continue working, often for many months. Such unexpected delays, keeping the crew away from their families for extended periods of time, places enormous stress on the seafarers. Moreover, it increases the risk of fatigue, which is a primary source of accidents at sea of which about 80% is attributed to human error.
Restrictions on crew change
Measures implemented by port states to reduce the spread of Covid-19 have involved several restrictions on embarking and disembarking crew. For instance embarking crew arriving by plane have been under an obligation to go directly from the airport to the vessel, whereas disembarking crew have been required to produce negative Covid-19 tests, often with lacking test equipment available in ports.
Various testing regimes have been implemented in countries worldwide which often are coupled with quarantine measures. Indeed, many crew members are now being required to quarantine for 14 days prior to departure in a dedicated facility, but in many cases without receiving additional compensation.
With strict port requirements and a significantly reduced number of flights, all crew have had to plan out their itinerary well in advance with little room for changes, something which is a logistical headache with ever changing vessel schedules and a greatly reduced number of flights.
In addition to the humanitarian aspects of the crew change situation, significant commercial problems also arise. Owners and shipmanagers are currently having major discussions regarding who should cover quarantine and testing, and where the risk lies if a seafarer tests positive prior to departure to the vessel when P&I insurance takes effect.
Moreover, Owners and Charterers are having equally difficult discussions as to who should ultimately bear the additional costs. The Charterers will argue that the obligation to man the vessel rests with Owners, whereas the Owners will point to the fact that this is an unprecedented situation. Unfortunately for Owners the standard charterparty forms generally do not contain relevant force majeure or similar provisions that aid their position to any great extent. Similar discussions will arise where the vessel’s operations are affected by crew members testing positive for Covid-19.
From a manning perspective significant more work goes into crew changes during a pandemic. The co-ordination in an ever-changing landscape of regulations is very challenging. Much care must also be taken to consider the vessel’s schedule following the onboarding of new crew as for instance China has implemented strengthened measures with respect to vessels with crewmembers that have spent less than 14 days onboard.
With many of the major suppliers of seafarers such as the Philippines, Indonesia and India experiencing widespread infection with a lacking healthcare system, owners are now looking closer at alternatives such as the Ukraine, Poland and Romania. Eastern Europe has very capable seafarers, competitive wage levels and relatively low Covid-19 infections rates. This could result in a shift in manning patterns that may not be easily reversible.
As time marches on, the International Transport Workers’ Federation (ITF) and various port states are getting increasingly impatient with owners that have crew onboard for extended periods of time. In August a vessel was arrested by the Panama Port State Control Agency and in October a vessel was detained in Australia, both due to extended crew contracts. It is to be expected that we will see more such cases going forward.
The new normal?
To their credit some of the major maritime nations and ports have stepped up to alleviate the challenging situation. Notably Singapore and Hong Kong have taken the lead in Asia, whereas Norway has been one of 13 countries to sign a pact with the aim to facilitate crew changes. Norway’s Prime Minister Erna Solberg has also addressed the growing humanitarian and trade crisis by pushing for the recognition of seafarers as essential workers at the UN’s General Assembly.
There are also more recent signs that the crew change situation is improving. For instance China has recently stepped up by opening 10 port cities for foreign crew changes. Hopefully this is an indication that the tide is turning and that more ports will find safe and practical ways of repatriating seafarers.
Other hopeful developments are industry efforts, for instance with various stakeholders pooling their resources to charter planes for their respective crews. Another example is industry stakeholders having joined forces in the Philippines by establishing quarantine centers for departing seafarers where Covid-19 tests, recognized by third parties, are administered.
Notwithstanding all the efforts made by the industry, and the recognition by authorities of the difficult situation, it remains uncertain when any significant improvement will take place. Indeed, it may be that the current situation constitutes the «new normal» which will remain for quite some time.