NAUTILUS P01 NOVEMBER 2009.qxd - Nautilus International

November 2009 | nautilusint.org | telegraph | 19
SAFETY AT SEA
Crewing
issues were
high on the
agenda when
international
marine
insurers held
their annual
meeting,
Denzil Stuart
reports…
The Turkish bulk carrier
Seli 1 has been abandoned
by its owners and insurers
after running aground off
South Africa Picture: Mike
Hutchings/Reuters
Try talking to officers,
ship insurers are told
C
“
Isn’t it time to get
closer to the business
you are insuring?
”
Are you experienced? Insurers are concerned at the
marked fall in average time in rank for chief officers
Graphic: June Cattini/UK P&I Club
Marine insurers ought
to visit the ships they
insure and talk to the
seafarers onboard to find out the
realities of life at sea, the annual
conference of the International
Union of Marine Insurance was
told.
This year’s conference, held in
Bruges, was extremely well
attended and was judged very successful
— yet the underlying
mood was sombre.
President Deirdre Littlefield
set the scene at the outset of the
three-day meeting. She said the
common theme selected this
year, ‘Marine insurance — mastering
rough seas’, was intentionally
broad to address the global
economic storm ‘that continues
to batter all of us personally and
professionally, and the issues we
must all understand and hopefully
master to ride out this storm
successfully’.
Where only a short time ago
there were shortages of vessels,
now there was a glut, the meeting
heard. HSBC Global Research had
reported that about 45% of new
boxship capacity scheduled for
delivery in 2010 would be delayed
or cancelled over the next two
years. And Lloyd’s Marine Intelligence
Unit estimated that around
10% of the global boxship fleet
was sitting idle due to slumping
world trade.
‘Unfortunately, despite the
delays and cancellations and
plans for accelerated scrapping,
there are still too many ships
chasing too little cargo, and a huge
amount of new tonnage is still on
order,’ Ms Littlefield warned.
Indeed, IUMI’s facts and figures
committee reported that the
world fleet in 2008 showed a net
growth of 7% in gross tonnage and
3% in volume over 2007. The
growth in the fleet over the last 10
years is a staggering 46% in gross
tonnage and 12% in volume.
This growing tonnage oversupply
problem impacts on the
question of crewing — and that
was why IUMI’s loss prevention
committee focused on seafarers
in its workshop in Bruges.
In a very challenging but comprehensive
presentation, principal
speaker Guy Morel — general
secretary of InterManager, the
International Ship Managers’
Association — put underwriters
on the spot by urging them to visit
the ships they insure.
His blunt message was: ‘You do
not generally have direct contact
with our crews, but your business
profitability depends to a substantial
degree on these crews. So,
isn’t it time to get closer to the
business you are insuring?
‘Send your inspector on board,
and let him take time to interview
the crews — mainly the officers,’
Mr Morel added. ‘You will learn
greatly from their comments on
their relationship to shore and on
their general approach to loss prevention.
Do not hesitate to visit
your ship managers and talk to
their crew department. Ask them
what they are doing in terms of
crew training, how they are developing
their crew loyalty programmes.’
Earlier, he showed two slides.
The first — thanks to the UK P&I
Club — showed the distribution
of experience in rank for chief
officers. It indicated that in 2007
the median experience in their
rank was 2.8 years — down from
4.3 years in 1995.
The second slide — from Intertanko
— showed how incident
rates on tankers had bottomed
out between 2000 and 2005,
thanks to the development of a set
of regulations that had had positive
effects on security and safety.
But it also showed that incidents
were rising again.
‘It may be a bit of a shortcut to
equate this rise in incident rates to
the shortening of experience in
rank, but it is also difficult to discard
it completely, Mr Morel said,
adding that ‘an obvious case of the
correlation between loss prevention
and crew training and skills’.
Mr Morel said that the function
of ship manager was becoming
more and more central to the
shipping world. In fact, the last 10
years had seen the transfer of
responsibility for crew recruitment,
training and management
slip away from owners to managers
— be they ship managers, crew
managers or crew agents. The
activities of InterManager had
further enhanced this situation.
His association — representing
some 3,500 ships — is promoting
a number of actions, including
a code of conduct promoting
transparency and ethics in ship
management, training of cadets,
and the unfair criminalisation of
officers.
Reviewing the current environment,
the InterManager general
secretary gave a downbeat
prognosis as the deepest down
cycle experienced in shipping for
decades continued. He thought
the chances of getting out of trouble
soon were very slim for several
years ahead — so people would
suffer more and bankruptcies
would become more and more
common.
And owners would try to
reduce running costs to the maximum,
instructing their ship managers
accordingly, while all
expenses without any immediate
justification were or would be
slashed — including the cost of
crew training, as this was an
investment in the future. So all
the signs pointed to a worsening
crew shortage situation for the
future, he added.
Examining the question of
shortages, Mr Morel said they had
to differentiate between the
immediate problem and the
future. In the short term, the pressure
for quality officers had been
great, leading to a massive increase
in crew wages in the last four
years. However, it was correct to
say that the numbers had still
been sufficient to avoid a ship
remaining stuck alongside due to
lack of crew.
For the longer term, however,
all agreed that the potential shortage
was massive. At the height of
the booming market, last year,
some were forecasting a shortage
of up to 50,000 officers for 2012. If
the shortage was evenly distributed,
and assuming an average of
10 officers per ship, and an average
of two officers for each position,
this would mean that 2,500
ships would not be able to leave
port by 2012. And if the shortage
concerned mostly the three top
officers, then the number of ships
affected could be closer to
10,000.
It was generally agreed that the
number of ratings was sufficient,
so the shortage was only concentrated
on officers — most acutely,
senior officers. Mr Morel said:
‘This was the result of decisions
made some 10-15 years ago. At that
time, the world of shipping was
discovering Asian crews, with
their cost advantage. So we
thoughtlessly dropped the
employment and training of
young European officers to
replace them with junior Asian
officers. After 10-15 years, the then
senior European officers had
retired, and the ex-junior Asian
officers have not been trained to
take up senior positions.’
Could the present economic
crisis reduce the need for additional
crews, Mr Morel asked. ‘We
have seen that we need to eliminate
a minimum of 2,500 ships. Is
that possible? If we assume there
are about 50,000 oceangoing
ships today, and another 10,000
on order, this means that 4% to 5%
of the world fleet would be without
crew, thus inoperative.’ This
might be possible, he thought, but
demand needed also to be analysed,
or the industry might find
itself in a situation where more
ships were needed but could not
be manned.
‘Finally, even if the present crisis
gives some breathing space,
the shortage would only be postponed,
not solved,’ he warned. ‘I
believe therefore it is essential to
act today for the potential shortages
of tomorrow.’
Piracy was another hot topic at
IUMI, as might be expected, and a
special workshop was devoted to
the subject. One speaker predicted
that the coalition naval forces
in the area will improve their
cooperation. The pirates’ success
rate would reduce and ransom
payments would drop, too, to a
much more manageable level.
However, he added that no one
knew if ransom payments were
used to fund terrorism.