Bloomberg
The battle between raw material giants and shippers leaves seafarers stuck
(Bloomberg) – A stalemate between commodity giants and shipping companies prolongs the labor crisis at sea. An estimated 200,000 seafarers are still stuck on their ships after their contracts expire and according to the requirements of globally recognized safety standards. To keep supplies of food, fuel and other raw materials on schedule, some of the large raw materials companies avoid hiring certain ships or imposing conditions that could block relief for exhausted seafarers. Companies are trying to avoid crew changes, which have become far more expensive and time consuming during the coronavirus outbreak. To keep shipments on schedule, some companies have asked their shipping partners to ensure that no changes are made, according to emails and contracts reviewed by Bloomberg. These requirements could worsen a labor crisis as early as month 12, according to Schiff owners, unions and the United Nations. More than a year after the pandemic began, hundreds of thousands of seafarers are long overdue for shore leave. Some have worked with no pay or a set repatriation plan, and many have taken desperate measures: in one case, a captain diverted his ship to the middle of the ocean and refused to return to course with no guarantee of relief when a pandemic could emerge Ship owners hire new crew members during routine port stops. This common practice has become a logistical nightmare with Covid border lines. Some ports require lengthy quarantines for inbound and outbound workers, while others refuse ships that have had their crew changed within 10-14 days because of fears that seafarers could spread the virus. In January around 300 companies, including Vitol Group, the world’s largest independent oil trader, and Australian mining giant Rio Tinto Group signed a pledge to take action to resolve the crisis for seafarers. The signatories, known as the “Neptune Declaration”, recognized a “shared responsibility” and promised increased cooperation between ship operators and charterers in order to facilitate crew changes. So far, however, some shipowners and labor representatives say that little has changed and not all of the largest charterers have signed up. “We chose not to sign because we believe our current crew change practices are fair and fully respect the need for regular crew changes,” said a spokesman for Equinor ASA, a major oil, gas company – and energy company based in Stavanger. Norway. “We do not charter ships for a voyage if a crew change is required that is not on our delivery schedule.” Exxon Mobil Corp., the largest US oil and gas producer, has also declined to sign. A spokesman said the company was considering “next steps.” The pact is “in the works,” said Rajesh Unni, captain and general manager of Synergy Marine, which manages more than 375 ships, including container ships and merchandise carriers. Shipping has always had competing interests, he said, but companies that sign the Neptune Declaration “at least commit to following the standard protocol, which should be much more convenient for you now that we are all on the same page . “What you need to know: Tracking the labor crisis at sea The dispute over who should pay the higher costs of crew changes is most acute for raw materials companies and their shipping partners who carry out so-called spot charter. According to the industry group BIMCO, spot charter accounts for 85% to 90% of the deliveries of bulk goods and tankers in the raw materials industry. Some companies have not specified crew changes or asked for verbal guarantees prior to renting a charter according to emails and contracts reviewed by Bloomberg. Charterers have also used questionnaires to find out whether ships are planning crew swaps according to shipowners. In one case, a ship owner told Bloomberg that in order to secure a charter with Rio Tinto, he would have to renew contracts, pay additional salaries and promise to relieve them when the voyage was complete. He also had to confirm that no crew change was planned for the duration. “Rio Tinto does not use” no crew change “clauses in charter agreements,” the company said in a statement. “Rio Tinto wants to support the shipping industry and the human rights of the seafarers on which it depends. This requires cooperation between shipowners who employ seafarers, charterers and regional port authorities for transparency of information and flexibility in the schedule. “The problem, say workers and seafarers, is that workers have absolutely no choice. Ship captains often have their crew’s passports – a port stop convenience, they say – and ports are tightly controlled borders. Even if a worker wanted to get off his ship, he wouldn’t get very far home without a passport, visa, or plane ticket. The International Transport Workers’ Federation (ITF), which represents seafarers, urges the industry to do more to alleviate the crisis. “There are still charterers who refuse to charter unless they are given an assurance that no crew changes will take place,” said Stephen Cotton, ITF general secretary. “It may not be as obvious as in writing, but it goes on As long as the lives of seafarers remain subordinate to the profits of the corporations, this crisis will continue to unfold. ”Read more: What happens if tycoons abandon their own giant cargo ships? The industry says it is the responsibility of ship owners to arrange crew changes and ensure the safety and wellbeing of seafarers on their ships. BIMCO has encouraged charterers to share the cost of crew changes and has developed a contractual language that obliges companies to rent the vessels for a set period of time – called time charter. Exactly that. Owners of vessels available for spot charter should change crew if the ship cannot be rented. Work and industry groups want businesses to be more flexible and allow tankers and bulk carriers to reroute or delay shipments Shareholders: A group of 85 investors who manage more than $ 2 trillion in assets, including Fidelity International, said in January, that this is often the case. Rers should be flexible in allowing crew changes and should consider providing financial assistance to seafarers who need to be repatriated. “Charterers at this point have to share the costs and cover the delays they may face,” said Laura Carballo, director of maritime law and policy at the World Maritime University in Malmo, Sweden. “That’s their biggest argument: it’s about the delays. Sorry, we are all facing delays now. The world is running only because seafarers are doing their job. “Koch Industries, of Wichita, Kansas, has interests in petroleum and agriculture and has instructed ship owners not to make crew changes during the charter, according to someone with direct knowledge of the terms and who asked not to be identified because the conversations are private were. The questions were submitted orally and not in writing. When asked about the destination, the company responded in a statement: “Koch works closely with ship owners to ensure the safety and well-being of crew members. This is a problem that we are closely monitoring and looking for possible solutions. “Rotterdam-based Vitol has asked ship owners not to make changes to the crew on some spot charters, according to people familiar with the company’s terms and conditions who asked not to be identified. They were not allowed to speak publicly. According to Vitol, the company has “tried to manage our mail order business according to the standards set out in the Neptune Declaration”. “Wherever this is economically and operationally possible, we facilitate the change of crew,” said company spokeswoman Andrea Schlaepfer in a statement. “As a ship owner and manager, Vitol appreciates the challenges of the current situation, but believes that if well managed, owners can maintain high standards for the welfare of seafarers.” The Neptune Declaration also mentions world leaders urged to change their ports and borders policies to ease the burden on seafarers after a September statement by consumer companies such as 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 had not already done so. This term has no official definition and countries were unsure of what changing port procedures would mean. On Friday, the shipping industry voiced concerns that the number of seafarers stranded has fallen since its peak, and the improvements may be short-lived as governments and port authorities respond to the threat of new variants of Covid-19 with tighter restrictions. Seafarers, many of whom are from developing countries, could also miss the ongoing vaccination campaigns, which could lead to further delays and disruptions in the supply chain. “The crisis is still ongoing,” said Guy Platten, Secretary General of the International Chamber of Shipping, representing more than 80% of the world’s merchant fleet. “Governments will not be able to vaccinate their citizens without the shipping industry, or especially our seafarers.” (Updates with recent statements from the shipping industry on the threat of new variants of Covid-19 in efforts to relieve seafarers.) For more information articles like this, please visit us at bloomberg.com. 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