- A standoff between commodities giants and shipping companies is prolonging the labor crisis at sea.
- An estimated 200,000 seafarers still stuck on their vessels beyond the expiration of their contracts and past the requirements of globally accepted safety standards.
- In an effort to keep deliveries of food, fuel and other raw materials on schedule, some of the big commodities firms are avoiding hiring certain vessels.
A Supply Chain Brain news reveals that fight between commodities giants and shippers leaves seafarers stuck.
Outcomes of the fight
The companies are trying to steer clear of crew changes, which have become far more expensive and time-consuming during the coronavirus outbreak.
In an effort to keep shipments on schedule, some firms have asked their shipping partners to guarantee that no change will take place, according to emails and contracts reviewed by Bloomberg.
More than a year into the pandemic, hundreds of thousands of mariners are long overdue for shore leave.
Some have been working without pay or a firm plan for repatriation, and many have taken desperate measures: in one instance, a captain diverted his ship to the middle of the ocean and refused to return to course without a guarantee of relief.
Signing of the pledge
In January, around 300 companies, including Vitol Group, the world’s biggest independent oil trader, and Australian mining behemoth Rio Tinto Group, signed a pledge to take action to resolve the crisis for seafarers.
Called “the Neptune Declaration,” signatories recognized a “shared responsibility” and promised increased collaboration between ship operators and charterers to facilitate crew changes.
The fight over cost of crew changes
The fight over who should pay for the higher costs of crew changes is most acute for commodities companies and their shipping partners, which carry out what are called spot charters.
Crewed vessels available on demand for anywhere from a few days to several months, spot charters make up 85% to 90% of dry bulk and tanker shipments in the commodities industry, according to industry group BIMCO.
What does the industry say?
The industry says it is the responsibility of ship owners to arrange crew changes and to ensure the safety and well-being of the seafarers on their vessels.
BIMCO has encouraged charterers to share the costs of crew changes and developed contract language that requires companies that hire vessels for a fixed period of time — called a time charter — to do just that.
Owners of ships available for spot charter, the group said, should change crews when the ship isn’t out for hire.
“The crisis is still ongoing,” said Guy Platten, secretary general of the International Chamber of Shipping, which represents more than 80% of the world’s merchant fleet. “Governments will not be able to vaccinate their citizens without the shipping industry or, most importantly, our seafarers.”
The Neptune Declaration
The Neptune Declaration also calls on world leaders to change their port and border policies to ease the burdens on seafarers, following a September statement from consumer companies including Unilever Plc and Procter & Gamble Co. to do the same.
Last month, the IMO recognized 55 countries that agreed to consider seafarers “essential workers” and encouraged nations that hadn’t yet to do so.
That designation has no official definition, and the countries weren’t specific about what if any change it would bring to the port procedures.
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Source: Supply Chain Brain
