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 shipping 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 can worsen the labor crisis as early as the 12th month, 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 vessels, 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 seaThe 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 dry bulk and tanker ships in the extractive 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 he would need to renew employment contracts, pay extra salary and promise to relieve them when the voyage was completed in order to secure a charter with Rio Tinto. 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 advocates, is that workers have absolutely no choice. Ship captains often hold their crew’s passports – a port stop convenience, they say – and ports are tightly controlled borders. Even if a worker wanted to leave 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, is calling on 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 writing, but it always works As long as the lives of seafarers remain subordinate to corporate profits, this crisis will continue to unfold. ”Read More 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 contract language that dictates that companies leasing vessels for a set period of time – called time charters – do just that. Owners of vessels that are available for spot charter should change crew if the ship cannot be rented. Work and industry groups want companies to be more flexible and allow tankers and dryers to reroute or delay shipments Shareholders: A group of 85 investors managing more than $ 2 trillion in assets, including Fidelity International, announced in January That this is often the case Skippers should be flexible in allowing crew changes and should consider providing financial assistance to seafarers who need to be repatriated 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, such a person with direct knowledge of the terms and who did not want to be identified because the conversations were private. 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 with good management, owners can maintain high standards for the welfare of seafarers.” The world also urged the world to change its ports and border policies to ease the burden on seafarers, following a September statement from 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 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 improvements could 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.) Articles like this, please visit us at bloomberg.com. 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