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January 20, 2021

Voyager News, Voyager Blogs

The invisible industry?

There are lots of good things to be said for shipping; its position as the fulcrum on which the global economy turns, success in reducing major accidents and spills, the continued pushing of technology boundaries to name just three.

As we know though, there are problems too and as shown by the ongoing pandemic, these problems are not confined to the industry. It has shown governments in fairly poor light too, despite the hard work done by some to find short term solutions.

The coming year promises more not less pressure on seafarers, since even with a vaccine, the process of managing population behaviour remains difficult in some regions and close to impossible in others.

There is a clear argument for removing people from the dangerous business of running ships, or at least some people, since technology and connectivity are both better than they were 10 years ago. Whether the industry has fully considered this problem, with the attendant social costs that would follow from mass redundancy of seafarers is open to question. Whether it is really possible is another.

But the clock is ticking either way. The industry needs to find a solution to the challenge keeping people on ships safe and allowing them the same human rights as anybody else. The risk to the industry of not achieving that is huge in terms of potential disruption and incalculable in terms of liability.

In 2020 shipping found out how little influence it has in the corridors of power as well as in the boardrooms of its customers. There is an obvious correlation between shipping’s preference for a low profile and its recognition by governments; there is no question that they understand the value, but the relationship is not one based on mutual trust and admiration.

Writing to everyone from the Pope to Amazon boss Jeff Bezos for help in persuading governments to act probably seemed like a good idea but it’s fair to say that neither were feeling the same level of pain as a seafarer, so the impact was minimal.

This is not to knock the efforts of the organisations that are still trying to make a difference; more to point out that it is time for the industry to decide if it wants another decade in the dark, or whether it is time to learn the value of people rather than simply calculate their cost.

It could be that in next five to 10 years that shipping is to some extent overtaken by events. The trend certainly suggests it will need to evolve very fast to meet the demands of customers and comply with the demands placed upon it.

This year – and increasingly in coming years – borrowers from mainstream finance providers will be faced with constraints on the availability of capital dependent on their environmental performance. They will probably also face a rising tide of regional regulation, however misconceived and patchily enforced. The tide here seems to have turned against the ability of global standards to provide for anything but the lowest common denominator, a level that increasingly will not be high enough.

Much more important is what happens when charterers start to take more of an interest in events in their supply chain – effectively in their names – and demanding transparency in terms of safety and quality, environmental performance, decarbonisation and working conditions.

The scale of the challenges suggest a need for a complete re-thinking of how the industry is structured and how much of it functions well enough to be sustainable.

But for the short term, human factors continue to pre-occupy the minds of owners, much as it has ashore as we understand anew the importance of workers whose work we take for granted. And it is not just owners but their ultimate customers and investors who are moving faster than governments on bringing renewed pressure to end the crew change predicament.

In late December, a group of leading investors wrote to the UN secretary general calling for an end to the crisis, warning that the situation was creating bigger risks every day. The investor group, which represents over $2 trillion in assets, said that it was ‘no longer solely a shipping industry problem’ calling crew change ‘a humanitarian tragedy as well as a major supply chain risk for many companies.”

“if nothing is done, it’s just a matter of time before something disastrous happens,” said Jenn-Hui Tan with Fidelity International. “The performance of some of the companies we invest in will ultimately be linked to the safety of cargoes being handled by seafarers. Ensuring that the rights and interests of seafarers are represented helps lower the operational risks.”

In the latest development, the Global Maritime Forum will use the online Davos meeting to launch the Neptune Declaration on Seafarer Wellbeing and Crew Change with the aim of securing recognition of seafarers as key workers and obtain early access to Covid-19 vaccinations.

Its members also want to see high-quality health protocols introduced, with increased collaboration between ship operators and charterers to facilitate crew changes, while ensuring airline connectivity between key maritime hubs. The declaration is designed to be a global initiative, focusing on actions that will ease crew changes and keep supply chains functioning, though some would argue the latter is not the problem.

What these initiatives must do – and urgently – is demonstrate to governments and the public alike that, for all the talk of autonomous ships and remote control, people are shipping’s most valuable asset.

And since it is people, not algorithms, that will decide whether the case has been made with enough force, it could be an important test of what the industry has learned over the last terrible 12 months.

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