Shipmanagement

Bernhard Schulte:

Crew safety is paramount

The safety and welfare of ship crews in the pandemic is the main priority of Bernhard Schulte Shipmanagement (Hellas), says its managing director, Theophanis Theophanous. That said, however, shipping has proved able to weather the Covid storm as digitization, for example, has improved operational efficiency. Thus, rates are expected to rise later this year.

According to the data so far, the market shows some improvement compared to the first months of the epidemic. What exactly is happening? Have we adapted to the new situation? Have the risks been reduced? Are you afraid of the situation deteriorating due to mutations in the virus and new lockdowns?

We certainly predict more positivity because of the widespread vaccine rollout and now that we are more comfortable with working conditions that became the new normal as a response to COVID-19. After handling more than a decade of challenging times, it is safe to say that shipping companies have abundant experience to draw upon and are fully capable of adapting and evolving. This is one of the reasons why Bernhard Schulte Shipmanagement (BSM) Hellas handled the downturns and adversities the industry faced in 2020, proficiently and at the same time, managed to limit potential detrimental consequences.

The pandemic certainly accelerated the adaptation of digital technology as well as remote service provision. This paradigm shift stays with us, but not as a burden: it will enrich our industry in the long run. The next step in this area however, is to make sure we have all necessary protection in place, such as cyber security, so that we can reap the benefits of our technological advancement with minimal exposure.

Any slowdown in the world economy logically has a knockon effect on the shipping industry, although the predicted COVID-19 induced market downfall turned out to be less damaging than expected. Realistically, an increase in demand and subsequent market rates should be anticipated later in 2021, due to the accumulated backlog of commodities that have not been shipped as a result of the pandemic. On the other hand, markets that thrived as a result of the global epidemic will likely return to their normal pace of business. Even with impending mutations and further lockdowns, the situation still does not foreshadow a major deterioration.

Statistics indicate that the issue of crews being isolated due to coronavirus restrictions has been addressed to a degree. Is that so or is the matter just being glossed over?

The situation is now slightly better than it used to be, as we have received support from the industry to obtain key worker’ status for the seafarers. This allowed the needed exchange of crew that had indeed been onboard over and above their agreed contract period. Nonetheless, restrictions preventing crew from going ashore and thus being isolated onboard still exist and will remain in place as long as COVID-19 is rampant. In reality, this is similar to the imposed quarantine in most countries are experiencing also, with restrictions of movement and typical day-to-day activities and the closure of retail stores, entertainment facilities and more.

Just like their shore-based families, friends and colleagues, seafarers are also obliged to follow restrictions; so it is pleasing to see incentives implemented by owners to reward their crew and to make time spent onboard more pleasant for them. It is a huge responsibility to support the crew by avoiding frustration and plummeting morale; and by keeping up communication and information flow until more normal practices return.

How does the market view the change of leadership in the US? Do you expect conditions in international transport to improve or will we go through a long “transitional period”?

It is challenging to predict the condition of the international transport market since the increase or slowdown of charter rates and industry in general is extremely multifactorial. While the current COVID-19 situation casts a heavy shadow on all parameters, and it is too early to foresee the definite impacts of the change of leadership on the maritime sector, we as a shipmanager are hopeful that the new US administration will benefit global trade.

How much will Brexit affect the shipping sector and Greece? Have you observed any changes? Are you concerned or is everything going well?

The shipping sector is enormous in its global scale and therefore should not be heavily affected by Brexit, especially since an agreement with the EU has been reached. The maritime industry is responsible for a worldwide transport of goods, between countries with different trade regimes, local laws and legislations, thus it is imperative that we overcome all barriers. As such, the core of the shipping sector is not expected to be adversely affected and any difficulties should eventually become a paper exercise.

What are your plans for the near future? What is it like to make plans in the midst of a pandemic?

BSM’s main priority during the COVID-19 pandemic remains seafarer safety and welfare. We are determined to secure the ‘key worker’ status for all, to make sure they are vaccinated and able to work, travel and fulfil their contracts safely, and return to their families without delay. Therefore, a common global approach is still urgently needed, and more governments must grant seafarers priority access to the vaccine.

As for the operations, we strive to support our clients with service stability and provide adaptive solutions where required. To achieve this in these unprecedented times, we optimise our synergies, focus on an even closer collaboration and open communication with our customers to ensure our services match their needs and therefore we can evade any business disruption.

For 2021 and for the upcoming few years, BSM Hellas is going full steam ahead to implement a strategically planned expansion. We expect a fleet increase in all vessel sectors, most notably in the LNG field, as well as an expansion of our local crew and shipmanagement teams to match this growth.

2021 Prospects from a Ship Manager’s point of view

Despite the widespread dislocation caused by the Covid 19 pandemic, it seems to have made management more efficient, says Agamemnon Apostolidis, technical manager (Greece) of Central Ship Management Ltd (DMCC Branch), UAE. It has encouraged the growth of the paperless office and remote management, partly offsetting the devastating effect on crewing, for example. Whatever the cost, world shipping will survive.

What makes 2021 much different compared to the previous years from a ship manager’s point of view?

Definitely Pandemic is the strongest ‘wild card’ on the table. This word is coming every ten minutes on our screens. The worst consequence of pandemic are the restrictions imposed in personnel’s mobility. People cannot travel, arrive or leave in the majority of the countries.

Crewing is significantly affected by the aforementioned restrictions. There is the one side – the human one, where we see our seafarers obliged to stay long time working on board against their willing and fatigue limits. Regretfully, very few things have been done towards this direction. During 2020, many voices, through almost all International Maritime Bodies, tried to urge IMO member nations to give seafarers the key worker status that would help them return home. This attempt was largely failed, because countries either feared bringing Covid-19 to their land or had other priorities.

In the past, so many ‘Maritime Stars’ used to talk in international Fora about the human element, their training, their conditions of living on board etc. In addition, a number of Port State Controls were very strict with Resting Hours and easily raised deficiencies for deviation (even if in most of the cases, they were clerical errors). But with this crew human tragedy? Seafarers left helpless and this confirms what we know since long time, that States are not consider International Shipping unless they can have some benefit (e.g. EU Carbon Tax).

There is also another – not so highlighted – side in the crewing developments at the Pandemic times. China and India restricted considerably the crew changes in their ports. They almost allow only national crew to sign in. As a result, Chinese and Indian crew numbers are booming now. However, there are doubts whether so many new crew members were ready and adequately trained to serve onboard the vessels.

For example, we witness Chinese seafarers to start replacing Filipino seafarers for newbuilding deliveries. The deployment of Filipino crew, which sums up to more than half of the world’s seafarers, has fallen dramatically due to the pandemic, according to official figures. The figures from the Philippine Overseas Employment Administration (POEA) show that total deployments for 2020 dropped to 217,241 compared to 518,519 in the previous year. Around 50 local recruitment agencies are reported to have closed because of the collapse in placements. At the peak of the pandemic in April last year, deployments dropped to a low of just 597 compared to 40,595 in the same month in the previous year.

Last but not least is the ‘Pandemic’ OPEX increase by 2% to 3%. Crewing was again the most affected cost element due to increased air ticket fares, prolonged stay of crew in the signing in ports and a number of frequent Covid tests. Sometimes companies were obliged to keep crew in a two-week quarantine for new deliveries – meaning, more than a hun-

dred thousand USD expense. Besides crewing, cargo freights (both air and sea) for spare parts were increased and in all kinds of services rendered there is always an additional small amount related to covid reasons.

Is there any positive contribution, any lessons to learnt, from the Pandemic?

Pandemic gave us great lessons until now. Terms like emergency preparedness, business sustainability or digitalization came into light with their physical dimensions. From PowerPoint presentations we reached very shortly the implementation stage. Service or equipment providers and our personnel ashore and on board had to deliver results now, and they did.

Most of the companies had always an ERP system but excel sheets and printouts with stamps and signatures had never have lost their shine. During Pandemic, Shipping discovered what Stelios Hadjioannou introduced in 1995 by his paperless shipping company. No papers are needed. Communication, decision making, training and approvals need just a keyboard. Digitalization is here. Almost everybody can work remotely without jeopardizing process efficiency and outcome. Companies discovered that business can continue without long travelling and hotel expenses, without days lost in airports and planes. Latter will definitely influence how business will be conducted ‘the next day’.

The extensive use of ITC (Information Technology and Communication) brought more products, more providers and more affordable prices. Replacement of expensive FBB technology by VSAT unlimited data at high speeds can be a good example.

Aren’t remote surveys and inspections also good news due to Pandemic?

Pandemic has given us a head start on a number of initiatives and remote surveys or audits are among those ideas. We witnessed a strong promotion of remote surveys by a number of surveying entities. However, reading the technical prerequisites such as 3G connection and Wi-Fi coverage in enclosed areas like ballast or cargo tanks and engine room, doubts may come up about the entire outcome of such surveys. As is becoming clear, it is very difficult to replicate the role of the surveyor entirely with technology.

Surveys were always a blend of documentation control (certificates, log books, records) and physical inspection. The former can be easily reached by remote tools, however the latter almost certainly not. Therefore, in practice, we experience much shorter than before inspections on board, especially in troublerooted areas, whereas validation of documents is taking place via transfer of files and scanned documents. Shorter visits on board also minimize the exposure of crew clean from Covid-19 to external potential sources of the virus.

Was the ‘Green’ agenda left behind due to Pandemic?

Not at all. First, we have to distinguish that there are two levels in this agenda. The long one that is related to new fuels and engine designs and the short one, that is much closer to our daily operational issues. The former one has been undertaken by engine designers and fuel producers. Many ideas seem to be on the table. Ammonia, Fuel Cells, Methanol, Hydrogen and Bio-LNG are amongst the most frequently proposed ideas. On the other hand, asset investors, the shipowners and their financiers, remain skeptical at the moment. Understand that the biggest drawback on each idea said is the life span of the proposal. A return on investment needs a certain life span that cannot be guaranteed so far. Nevertheless, as ship managers we will follow ship owners’ decisions, not underestimating the crew and shore personnel skills to deal with the new fuels. It is going to be a revolutionary period to adopt from ‘sails’ to ‘new steam’ again.

The short agenda is already here. Presently, we are working closely with Shipowners to meet the new regulation that will likely be enforced from 01-01-2023. Energy Efficiency Existing Ship Index (EEXI) will drive older bulk carriers and tankers to officially declare a new maximum speed and consequently operate at lower speed. Some older ships are favored by this approach, some others are not. At the moment we are verifying where our existing ships are standing against EEXI, whereas we are scanning the second hand market to find ships that can reach a good EEXI.

May all above topics like the pandemic or the highly cost green agenda (become obstructions to) hinder the development of the international shipping?

As long as the world population is growing, the international shipping will grow as well. Shipping is the only way for efficient transport of food and energy, the two pillars of the human development. When I was born in 1970 the world population was 3.7 billion, whereas today is 7.8 billion; more than double. By 2025 the world population will reach the 8.5 billion. Such increases never happened before.

In 2006, the world fleet was just passing the 70,000 mark, but in less than four years later, this total had hit 80,000. Another four years passed before the 90,000 figure was reached. Recently, the world fleet has topped at 100,000 ships for the first time.

Both above parameters, the rapid increase of the world population and consequently the world fleet, are not often taken into consideration in the international or regional regulatory bodies. Nine out of the 10 faster growing nations are away from US and Europe and their priorities are much different than those of the ‘old world’. A much more holistic approach is needed, in order to outlook and design the future of the international shipping.

IMO and WISTA International launch first Women in Maritime Survey

IMO and WISTA International survey will obtain baseline data on number of women and their positions in maritime and oceans fields

The International Maritime Organization (IMO), and the Women's International Shipping & Trading Association (WISTA International) have launched the inaugural Women in Maritime – IMO and WISTA International Survey 2021 to examine the proportion and distribution of women working in the maritime sector, from support roles to executive level positions. The survey is part of a series of activities aimed at laying the groundwork for further discussions on how to build a more diverse workforce within the maritime sector, essential for a sustainable future. The data obtained by the survey will help build a picture of diversity and gender equality in the industry. The launch of the study follows the 2020 signing of the IMO-WISTA Memorandum of Understanding (MoU) on promoting greater diversity and inclusion through enhanced cooperation activities in the maritime sector. The MoU was signed by IMO and WISTA International, an international organization whose mission is to attract and support women at the management level, in the maritime, trading and logistics sectors. The MoU aims to set a framework for both IMO and WISTA to promote gender diversity and inclusion as vital factors in providing a sustainable future for the shipping industry worldwide.

IMO Secretary-General Kitack Lim said: "Diversity in maritime matters. Empowering women fuels thriving economies across the world, spurs growth and development, and benefits everyone working in the global maritime community and beyond. We need solid data on female participation, as this will enable us to track and quantify our ambitions in what has traditionally been a male-dominated sector. I am pleased to invite all Member States and maritime stakeholders to take part in this important survey."

Despina Panayiotou Theodosiou, President at WISTA International said: "Having comparable data is a key component when creating programmes and proposing policies that will increase the participation of women in maritime. It is an essential step forward in creating a more diverse and inclusive environment in our sector. With our global reach we can amplify the strength of this survey to show real results and back our drive towards an inclusive maritime sector."

In addition to the just-launched survey, other initiatives under the IMO-WISTA MoU include developing a database of female experts in a wide range of maritime subjects who are available for speaking engagements. This will contribute towards more diverse panels.

Another key objective of the IMO-WISTA MoU is to strengthen cooperation and share best practices between the IMO-established regional Women in Maritime Associations (WIMAs) and WISTA International's National WISTA Associations (NWAs).

In 2019, the IMO Assembly adopted Resolution A.1147(31) on Preserving the legacy of the World Maritime theme for 2019 and Achieving a Barrier-Free Working Environment for Women in the Maritime Sector, which urges firm action in coming years to advance gender equality throughout the maritime sector and help create an enabling work environment that embraces equality, diversity and reduces bias. The resolution was adopted following a year of action to promote diversity under the World Maritime theme, "Empowering women in the maritime community”. This work continues, including under the IMO women in maritime programme.

Women in maritime survey

The IMO and WISTA International survey is open to IMO Member States, IGOs, NGOs, public and private companies in the maritime sector and maritime training establishments. There are two separate surveys to be completed by Member States and industry.

The 2021 inaugural survey is being carried out by IHS Markit on behalf of IMO and WISTA International. The intention is to repeat the survey every three years. The aim is to support implementation of the United Nations Sustainable Development Goals (SDGs), in particular SDG 5 on gender equality, SDG 8 on decent work, and SDG 17 on partnerships. The data collected will assist in creating programmes and proposing policies that will increase the participation of women in maritime, thereby creating a more diverse and inclusive environment in our sector.

Leadership Insights Series: Cybersecurity roundup

Shipping has taken important steps in gain access to its IT systems; the equivalent of a burglar breakcyber security, but leaders must contin- ing into your poorly protected garage to gain access to your ually address cyber risks that are unique heavily protected house. Clark said there has been a 900% to their organisations and operating increase on OT cyber incidents in the last three years. environments. Chronis Kapalidis, Associate, International Security DepartThis was a clear message from all ment, Chatham House, warned of the sophistication of cyber speakers at the latest ICS Leadership criminals targeting shipping, from hackers utilising open Insights dialogues on 10 February source information on Internet of Things devices to gain 20201, focusing on cyber security. access to a companies’ IT systems through Wi-Fi connected Esben Poullson, ICS Chairman opened ‘smart’ lightbulbs. the discussion and stressed that cyber In another case a shipping company was experiencing multiple risk management should be high on pirate boarding’s in the Gulf of Aden. It was later found that the shipping’s agenda: pirates were paying hackers to gain access to voyage plans to “Cyber security is more than just the optimise their attacks. digital equivalent of the guns, guards and Promisingly, it is shipping’s own workforce that can be part of gates of the physical world. The internet the solution. Contrary to popular belief, Phillip Morgan, Prois global, and attacks can spread across fessor of Human Factors and Cognitive Science, CardiffEsben Poullson borders and through corporate networks. University & Airbus, said, “Humans can be the strongest line

“And cyber security is more than just an insurance policy – it is of defence against cyber incidents.” potentially all about business survival. A breach of cyber security Morgan added that it is vital not to assume what the human might not just damage a business; it could bring it to a standstill vulnerabilities are in a company, but rather to measure it at an causing losses of tens if not hundreds of millions of dollars.” organisational level.

Paivi Brunou, Head Cyber Security, Wartsila Voyage, stressed “Human cyber vulnerabilities are not always obvious. Impulsivit is important for the shipping world to capitalise on the benefits ity, gender, an extrovert personality are not always good measof becoming more digitally connected, ship to ship and ship to ures of who will be a more successful target. Threat appraisal, shoreto optimise operations. However, Brunou warned that as security self-efficacy and an affinity with the devices we use are digital systems become more interconnected and complex, so often more key.” too does identifying and managing the cyber risks: Morgan stressed there is a need not only for traditional surveys

“A cyber incident is not always like a massive fire; it is not to assess human risks but also “cutting edge” research on how always easy to see something going on with system. The 4th people use and interact with technology by tracking eye moveindustrial revolution has changed how we work, where we work ments, pupil dilation, pulse and heart rate. “We need toolkits and and the skills we need in the last decade. to be more specialist in the realms of sociotechnical cyber secu-

In the next decade it will be even more difficult to identify and rity,” he said. manage cyber risks due to the growing complexity, greater con- Shipping must also address existing gaps in international connectivity and an expansion of the attack surface. ventions and regulations and the impact it has on insurance,

Ships are carrying a plethora of people, cargo and information noted Clark. If a cyber incident means a vessel is deemed unseaand we need to find new ways to protect them.” worthy, for example, issues of due diligence will arise. “What

Cyber risks for maritime are on the rise. As a result the IMO has happens if there is a cyber incident in a new build and it is found set out Resolution MSC 428(98) which identifies cyber security that it arose due to a defect in a ship’s system? It could be as a risk to be addressed in safety management systems and to arguable that is within the owners scope of due diligence and if it be verified in audits from 1 January 2021. However, for many, is what does the owner have to do?” addressing cyber risk is still in its infancy. Speakers agreed ship- Clark put forward the notion of a cyber security kitemark for ping must step up its game. shipboard systems that can be regulated and recognised as a

Julian Clark, Global Senior Partner, Ince, said: trusted standard.

“The maritime sector is seen as soft target in relation to cyber Ultimately, the message is that shipping must not take its eye exposure. The aviation sector, for example, are well ahead of us of the ball as cyber risks continue to increase and evolve. and the statistics speak for themselves. There has been a 400% “We need to be prepared to change. What protected us one increase in cyber incidents in the maritime sector in last 12 week may not work the next. We need to be aware and apprecimonths.” ate how great we are as human beings at being adaptive, and

Speakers urged shipping not to overlook the threat of cyber there is no reason we shouldn’t be adaptive for cyber security. It criminals utilising weak points in operational technology (OT) to is the only way we can win,” Morgan concluded.