- Normal trade operations struggle to resume with the coronavirus-induced restrictions.
- Regular crew change process now turned a lengthy, complicated and a costlier process.
- Charterers demand “no crew-change” clause.
- Operations affected as crew change rules are not uniform across all ports.
- Maritime insurers are extending the validity of these PEME certificates.
- Personnel who “sign-off” at one port finds it difficult to return to their country of origin.
A natural and regular transition from one set of crew to another has now turned into a complicated, expensive and a lengthy process, says an article published in Platts.
Impact of Coronavirus restrictions
Trade operations
Global shipping is struggling to resume normal trade operations with the coronavirus-induced restrictions.
The restrictions take toll on logistics chains, threatening earnings prospects and ramping up freight as well as demurrage costs.
The recent government restrictions imposed by countries such as the Philippines and Hong Kong add to the woes and expenses of shipowners and operators alike.
Crew change process
A natural and regular transition from one set of crew to another has now turned a lengthy, complicated and a costlier process.
A dry bulk ship owner said the estimated time to replace crew at Manila in the Philippines is now taking two-three days compared with just 12 hours a month ago.
No crew-change requests
Charterers’ request for a “no crew-change” clause to be added into the charter party while fixing dry bulk vessels. The owners are also asked to bear the cost related to deviation and time lost.
14 day quarantine
According to a Medium Range tanker owner, “If the crew is from the Philippines then operators will disembark them in Manila but otherwise replacement [either] there or in Hong Kong is now out of question”.
- Hong Kong mandates merchant ships calling for purposes other than loading or discharging cargoes to undergo 14 days compulsory quarantine.
- This directly hits crew replacement by those ships which do not have to unload or load cargoes.
Such crew related measures have come at a time when iron ore demand in China is on the rise and bad weather has already disrupted supply of ships.
Rates and demurrage
The Platts Cape T4 index for non-scrubber fitted ships — which takes into account various global routes — has increased by about 60% during H1 August.
In tankers:
- the rates have so far not been supported because of limited demand and ample supply,
- earnings of owners is adversely affected,
- but owners are now pressing for higher demurrage in spot voyages due to uncertainties.
“Freight is still low because there are less cargoes moving around but if the problem [in changing crew] continues it will definitely push up the rates,” a chartering executive with a tanker owner said.
Crew change rules not uniform
As the crew change rules are not uniform across all ports, the operations are getting badly affected.
Each port has its own rules and they keep changing them with alacrity.
“Regulations change daily. What can be done today, does not mean that it can be done next week, too,” said a Greek tanker owing source, whose ships have crew stuck onboard for more than 14 months.
Indefinite delay
Ships on arrival at quarantine anchorage of ports have to notify the port sanitary authorities through their agents.
Before the quarantine procedure is completed, none other than quarantine officials is allowed to embark and disembark, a maritime insurance official said.
This could lead to indefinite delays, the official said.
Seafarers trapped onboard and onshore
The duration crew spends onboard is governed by the United Nations’ Maritime Labor Convention. The extraordinary situation has resulted in the crew of many ships staying onboard for months.
While, thousands of seafarers are unable to take up duties onboard as they are stuck at homes.
No wage
According to a tanker broker, though it is affecting both ways, at least those onboard will earn salaries, those not getting deployed are not even on payroll.
Stuck due to crew change crisis
There are around 300,000 seafarers stuck working onboard ships due to the crew change crisis and an equal number of unemployed seafarers onshore waiting to join them, according to the International Transport Workers’ Federation estimates.
For more information read our article Covid 19 Leaves 200,000 Seafarers Distressed and Stranded in Sea
Validity of PEME certificates
A key rule governing the crew deployment is the pre-employment medical examinations, or PEMEs. Maritime insurers are extending the validity of these PEME certificates month after month to ensure continuity in global shipping operations.
Returning home remains difficult
Ship operators complain that even if personnel are able to “sign-off” at one of the ports, returning to their country of origin is extremely difficult.
Expensive chartered flights
To move seafarers from the port of disembarkation to their country of origin, crewing companies are now chartering flights and this has ironically emerged as a profitable operation.
Even if there are only a dozen crew members to be moved to the same location, crewing companies charter a flight and offer the remaining seats to other passengers at commercial rates, said sources familiar with such deals.
Doha has emerged as a major hub for such transition of shipping crew from port to airport.
At least three shipping companies in Mumbai alone are now operating regular chartered flights for crew members, said a source.
“[The companies are] making a neat profit of around $200,000 for each trip from Doha,” said the source, by selling vacant seats to others.
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Source: Platts
