SHIPPING Shipowners' perspective
Laying up a ship is not a simple matter By Captain Stephen Brown Owner and Director, West Pacific Marine
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s the world continues to wrestle with the challenge of COVID19, the immediate, medium, and even long-term implications for the maritime sector appear to be gaining recognition. The decision to lay-up a vessel is usually financial, sometimes operational, but on a personal note and for any seafarer, the experience is always emotional. Accustomed to running hard 24/7/365, when everything comes to a grinding halt and the vessel is left with a skeleton crew the question begs, where from here? Facts dictate the business decision to layup a vessel but the personal uncertainty of those impacted can often be overlooked. It is rarely so simple as switching to another vessel when
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16 — PACIFIC PORTS — August 2020
The estimate is that Q2 of 2020 has seen 250-300 cancelled sailings, primarily on the Asia-Europe and transPacific trades, with those ships still in employment often sailing at below economically optimum capacity. the whole future of a company, or even an entire sector of the marine industry is in a crisis of the magnitude of today. On the container front, at the time of writing, around 15 per cent of container capacity is idled which translates to something approaching 3.5m TEU. The estimate is that Q2 of 2020 has seen 250300 cancelled sailings, primarily on the Asia-Europe and trans-Pacific trades, with those ships still in employment often sailing at below economically optimum capacity. The consequential impacts through global supply chains are enormous. Likewise, for car carriers, given the global collapse in demand for new vehicles, the fleet is significantly under-employed, resulting in layups and/or early scrapping. When it comes to ports, the impact of falling volumes has been equally dramatic. Reduced revenues equate to shrinking operating budgets, deferment of capital expenditures and pressure to reduce overheads. There may also be pressure from terminal lease holders to reduce or defer payments, and of course, reduced working hours in the longshore community can quickly impact the economies of local communities. For the cruise industry, these past months have been punctuated by one blow after another. Subject to exclusion orders from several countries, uncertain return to service dates, securing of suitable lay-up locations, and the nightmare of arranging crew repatriations have, in combination, plunged the sector into an unprecedented crisis from which some may not emerge intact. To their credit,
having explored every option to resolve the problem of repatriating crews, compounded by limited flight availability, the cruise lines have themselves switched crews between ships and taken them home by sea, or at least to a close port. As an example of this, there are around 25 large cruise ships anchored in Manila Bay, many having repatriated their Filipino crews but who are then subject to a long wait for COVID-19 testing followed by a period of mandatory isolation before being allowed to complete the trip home. Similar repatriation exercises have taken place elsewhere in Asia, Europe, South America and the Caribbean. The importance of this unprecedented move by the cruise lines is underlined by increasing reports of stress among crews which, sadly, has resulted in a number of suicides. Despite the best efforts of shipowners across all sectors of the industry, it is estimated by the International Labour Organization (ILO) that some 150200,000 serving seafarers are currently at the end of their contracts with many being forced to work well beyond their expiration date. Seeking to address the severity of the situation, the International Maritime Organization (IMO) has issued a 12-step plan to assist governments to enact coordinated procedures for the safe movement of seafarers. The aim is to provide its 174 member states with a roadmap to free seafarers from their Covid-19 lockdown and allow appropriate exemptions for vessels to change crews. The plan is supported by a coalition of seafarers’ unions, shipping industry associations
