Stranded crew crisis is ticking time bomb for global trade
You may have read those Kafkaesque stories about seafarers marooned on cargo ships month after month, unable to go home at the end of their work contracts due to COVID-19 travel restrictions.
You may have thought, “How unfortunate,” then turned your attention back to your own pressing business problems amid the pandemic.
A crisis for an Indian seafarer stuck on a Liberian-flagged ship because Indonesian authorities won’t allow passage to the airport may seem distant from the challenges of a U.S. cargo shipper struggling to restock his or her shelves with goods from China and Thailand as social distancing eases.
But it’s all connected. The plight of international seafarers is a ticking time bomb for the U.S. supply chain because ship crew cannot be forced to keep working forever and there are only two ways this impasse can end: Either governments finally ease travel restrictions, allowing crew to get home and replacement crew to restaff ships, or ships will start to be removed from the trading fleet.
If seafarers with expired employment contacts decline contract extensions — or their unions do not agree to extensions under collective-bargaining agreements — on-duty crews will fall below the minimum number of seafarers set by safe-manning requirements, at which point vessels may be considered unseaworthy.
Time is running out
Labor leaders representing seafarers want to start seeing evidence of progress just a few days from now, beginning this Saturday, and they want to see this issue on its way to resolution by June 15.
“Most of the countries of the world are trying to get back to normal, whatever normal looks like, and restart their economies, but if the ships aren’t able to carry what they normally carry, the countries of the world will not be able to restart,” warned Fabrizio Barcellona, assistant secretary of the seafarer section of the International Transport Workers Federation (ITF), the union that represents seafarers globally and coordinates with affiliated regional seafarer unions.
Barcellona said in an interview with FreightWaves, “There have been delays [since the outbreak], but the ships have continued to carry cargo. If the governments do not take this opportunity to allow seafarers to be repatriated, the ships will need to stop, and countries will not get what they need.
“We’re not talking about not getting the latest model of the iPhone. We’re talking about not getting the iron ore needed to make steel and not getting the fruit from Latin America needed in places where there is no fruit. Like it or not, with globalization, no country is self-sufficient.”
Seafarer labor interests agreed to not stand in the way of one-month extensions to employment contracts on March 15 and again on April 15. The extension on May 15 is different. “We reject calling this one an extension; this is not an extension, it’s a transition,” asserted Barcellona.
“Starting May 16, we need to see companies replacing their crew and governments allowing crew changes to happen, starting with those who have been on board the longest. We need to see something changing on the 16th of May, not the 15th of June,” he stressed, adding that if no progress is made by June 15, “there won’t be another extension [or transition] after this one.”
Coronavirus still blocks shore access
Prior to the coronavirus, about 100,000 crewmembers were repatriated per month; employers are required to fly them home at no charge at the end of employment contracts. Crew tours of duty are limited to no more than one year by international labor convention, although different companies have different multimonth schedules.
The outbreak halted virtually all repatriations, so crew have kept working beyond their original terms.
Governments have also barred crew from shore leave. In fact, fear of COVID-19 has become so intense that a Russian seafarer who had a stroke while working on a ship off Indonesia was recently barred from going to an Indonesia hospital, said Barcellona.
Because cargo-ship crew have been stuck out in the ocean, almost none have been infected with COVID-19. “The number of cases on board [cargo] ships are minimal. For us, the concern is that if seafarers become very ill or there is an accident, they’re not even allowed access to a [shoreside] doctor and medical facility,” he said.
Industry pushes for a solution
The ocean shipping industry has been working aggressively to solve the crew-repatriation issue, urging governments to designate seafarers “key workers” and allow them to transit regardless of nationality. The ITF meets frequently with delegates of the International Chamber of Shipping (ICS), which represents the ship operators; the World Health Organization; the International Maritime Organization (IMO); and the International Labor Organization (ILO).
Appeals have been made at the United Nations, the largest public shipping companies have been vocal on the urgency of resolving the issue, and industry forums are focusing on the crisis (a Capital Link forum scheduled for June 15-16 will feature the secretary general of the IMO, among others, right at the deadline cited by the ITF).
International groups coordinated to put out a 12-step roadmap on May 5 detailing how governments can end the “crew lockdown.” At the time the roadmap was released, its authors estimated that 150,000 crew needed to be repatriated by midmonth to comply with the one-year regulatory limit on employment contracts.
According to Barcellona, “We are mindful that we have the goodwill of most of the shipowners in trying to replace the crew. We are mindful of the problems. No one expected the scale of how many countries would impose lockdowns. We originally agreed to extending [employment] contracts to give governments a chance to come up with [policies on] easing restrictions. But we are of two minds on this, because it might give the impression of: ‘We’re just postponing the decisions and there will just be another one-month extension so why bother [fixing it]?’
“All of the steps that the industry and the regulatory bodies could do have been done. Everything has been explored and put forward. But until the governments lift the restrictions, the crew changes won’t happen,” he said.
It has been three months since the crew-repatriation issue first arose and despite a major lobbying effort on the part of the shipping industry, there has been remarkably little progress in terms of actually getting crewmembers home.
The U.K. government allows crew passage and China is allowing crew transfers for Chinese crew aboard Chinese ships. Singapore had previously been cited as a solution, a potential hub for crew changes, “but with the increasing number of cases in Singapore lately, it seems the situation there is not ideal,” said Barcellona.
Restrictions on international crew air travel remain so extreme that Carnival Corporation is using nine of its own cruise ships to bring over 10,000 of its crewmembers home by sea.
The tragedy of the commons
In the best-case scenario, governments relaxing restrictions via multiphased approaches and becoming less fearful of COVID-19 risks would finally be more open to crew transits and allow passage — and do so within the next month.
It seems more likely that this is a “tragedy of the commons” in the making. Economic theory defines a tragedy of the commons as a situation involving a shared-resource system (in this case, the seafarers who enable global ocean trade), wherein independently acting individual resource users (in this case, governments representing cargo shippers) act in their own self-interest (seeking to protect their citizens from COVID-19), and in doing so, collectively behave contrary to all users’ common good by depleting the shared resource (seafarers and, by extension, ships to move goods across the oceans).
Most crew on non-Chinese ships are Filipino, Indian or Indonesian, with Chinese crew predominating on Chinese ships. Most ships are not registered or “flagged” to the home country of the owners, but rather, to a so-called “open registry,” primarily Panama, the Marshall Islands or Liberia.
Excluding Chinese shipping, which is allowing crew changes for its own nationals and its own ships, there are no nations involved in the crisis powerful enough to force the issue (India is the largest among them).
According to Barcellona, “As a trade union, we are always accused of being critical and cynical about flags of convenience [open registries], but the reality of this crisis has highlighted the issue, because if half the world fleet had been under the flag of the USA, something would have happened by now.”
What happens on June 16 if the governments don’t do anything, particularly given that international bodies like the IMO and ILO have zero authority to enforce their decisions on member countries?
If governments don’t act to restart crew repatriations and crewmembers stop agreeing to contract extensions, who would declare a ship unseaworthy and unable to sail if it does not have the minimum number of personnel on employment contracts? The master? The flag state? The port state the ship is calling at?
“As you can imagine, we spend day and night thinking about Plan B if nothing moves,” said Barcellona, who argued that if governments do not remove crew-transit restrictions, “the flag state is ultimately responsible.”
“The master has the overall responsibility to evaluate whether the ship and its workers are safe and secure,” said Barcellona. “But we are very much concerned that the master would be placed in a very awkward position of putting the ship offline. If the crew take the decision not to sail, the crew could be criminalized.”
FreightWaves asked Barcellona whether there could be an action — potentially through crew covered under collective-bargaining agreements — that could render ships without the minimum required crew aboard with active employment contracts after June 16.
“We are looking at options and plans on how to respond, should the restriction and the industry efforts to ease them fail,” he replied. “There are a number of legal implications and regulatory instruments that could be looked at. I cannot reply directly to your questions as we are still looking at things as we move along.”
If not the master, would flag states declare ships unseaworthy and prevent them from sailing if there were insufficient crew with employment contracts aboard?
“Should this scenario arise, it will be addressed on a case-by-case basis, always taking into account the safety of the crew, the ship and the environment,” answered Laura Sherman, director of marketing and communications for International Registries Inc., the administrator of the Marshall Islands flag.
In other words, maybe, maybe not.
The only thing clear about the endgame is that it’s going to get messy if crew repatriations don’t start soon, creating disruptions across container, tanker and dry bulk supply chains.
And cargo shippers are not the only ones at risk, added Barcellona. “Crew who have exceeded their tour of duty are stretched, tired and stressed. There is depression and anxiety. This creates a serious risk of increased marine accidents and pollution,” he warned.
“What we’re concerned about is that we wake up tomorrow and see on the news that because the crew is overstretched and overtired, two ships have collided off Tokyo or the U.K. and there is a massive environmental disaster.”
Source: FreightWaves by Greg Miller https://www.freightwaves.com/news/stranded-crew-crisis-is-ticking-time-bomb-for-trade