1. Memories of Odessa
2. IFSMA Ukraine statement
3. Marsh advice
4. Deep sea mining
5. In-transit cargo loss
6. Crews refused treatment
7. Supply chain disruption
8. Crew claims and contracts
9. Herald of Free Enterprise
10. Lines skipping port calls
11. Emerging port technology
Notices & Miscellany
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1. Memories of Odessa
By Michael Grey
“They are lovely people who are going through hell”. It was a surveyor from DNV, who we happened to meet at Odessa airport, as we clutched our cardboard exit documents in the queue for what served as a departure lounge, whose words came back to me this week. It was a freezing December in 1994 and he was returning home after attempting to instil some order into ship construction in a chaotic Black Sea shipyard, where the legacy of Soviet inefficiency was dying very hard. He seemed glad to be leaving.
We were a BIMCO delegation, which had been providing a training course to the Black Sea Shipping Company. Our two experts had been tasked to provide what can best be described as some lessons in best commercial shipping practice, to people whose entire policies had been prescribed 1000 miles away, by the ministry in Moscow. Now, Blasco was a limb without a heart, having to learn the basics in order to keep its inherited 300 unit fleet, with its 26,000 employees, trading and earning for their newly independent country. Much of the fleet was technically redundant or impractical, in the new commercial maritime world in which it now floated. They were trying to sell some of the uneconomic units, and I recall a series of 28 knot gas turbine propelled container ships, which had been built to suit the requirements of some Soviet Navy directive, rather than commercial utility, and drank 280 tons of fuel per day. They were not optimistic of an early sale.
We stayed at a sort of holiday complex which had been built for Sovcomflot where merchant mariners and Soviet shipping company workers could have enjoyed some sun and seaside attractions. We lived in an elegant villa where the top people (there had been no “classlessness” in Soviet society) had been housed, in some luxury, although the lights and heating were apt to be extinguished for several hours every day. On the other side of the road was a more impressive and heavily secured complex, which, we were told, had been operated for the KGB, where the torturers and their families had enjoyed relaxing holidays by the seaside.
The BIMCO course was well attended, although it developed into a sort of surgery, where the speakers, hugely experienced, spent a large amount of time trying to sort out real commercial disputes and problems brought along by our “clients”. For people, whose every move had been dictated by Moscow, it was almost a matter of getting back to basics, with every crook in Christendom beating a path to bits of the former Soviet Union with their “attractive offers”.
After the formal events, we would spend time with our hosts and it became clear just how difficult their problems were, as they attempted to change the old Soviet mindset after so long, when every decision was not your own. Where were any incentives for decision-making in cradle to grave communism, where there was no perceived need for punctuality, alertness and the sort of virtues young brokers learn practically in their prams? They were, as the DNV surveyor said, “lovely people”, but they were indeed going through hell as they attempted to make sense of their post-Soviet legacy. “It will take two generations to sort our problems out”, said a visibly exhausted senior Blasco manager, with every day bringing forth new crises, as they struggled to find the working capital for the paint and canal dues and pensions and the pitiful wages they were all paid. But with the currency crashing and ships being arrested for detentionable defects and financial defaults, the company’s legacy seemed positively toxic. One of our hosts, a cheerful ex master who told us he was making $50 per month, told us, as well he might, that he was beginning to doubt the manifold advantages of the new world of capitalism.
Odessa, the “pearl of the Black Sea” was a beautiful city, designed by the same French architects who had given the world Paris 200 years before and the loveliness showed through the years of neglect, with stately buildings, and tree-lined avenues. Somehow they had managed to renovate the opera house and we were taken to a performance of Giselle, with a full house of people who were able to forget their problems for a few hours, in a wonderful setting. But half the population, in this beautiful European city was starving, after the disappearance of the welfare net. And there were some bad signs; the local mafia with their sunglasses and BMWs, openly in the streets. A group of them warned us away, meaningfully patting their pockets, as we watched them unloading a beaten-up freezer trawler with a cargo of oranges, at the foot of the Potemkin Steps., in some twisted derivation of international trade on their terms.
All that was 28 years ago and it has come flooding back, with the appalling scenes from Ukraine this week. Blasco, of course, is long gone, but maritime Ukraine has developed a reputation for fine ships’ officers in the global fleet. Progress was being made. There were pictures of beautiful Odessa, its centre lovingly renovated, as its inhabitants erected makeshift defences against the anticipated invasion in the tree-lines avenues, and you cannot but fear the worst. After all the invasions, revolutions, wars, pogroms, genocides and mass deportations, over the ages, they deserve something better in this so-called civilised century. Your heart must surely go out to these poor, lovely people, as they go through their latest sort of Hell, as Putin blasts their country apart.
Michael Grey is former editor of Lloyd’s List.
2. IFSMA Ukraine statement
The following statement was released by IFSMA with reference to the situation in Ukraine.
“The International Federation of Shipmasters’ Associations (IFSMA) is an apolitical organisation dedicated solely to the interests of the serving shipmaster and to uphold International Standards of Professional Competence of Seafarers commensurate with the need to ensure “Safe Operational Practices, Preservation from Human Injury and Protection of the Marine Environment”.
On the 24th February 2022, IFSMA was shocked and greatly alarmed to hear of the invasion of Ukraine. This ongoing invasion has led to the United Nations General Assembly Resolution on the 2nd March calling for the end to all hostilities and the withdrawal of the invading forces with immediate effect. It further stated that the territorial integrity and sovereignty of Ukraine must be respected in line with the UN Charter. The invasion of Ukraine poses serious challenges to global shipping and maritime leaders just as it is starting to recover from the effects the COVID pandemic has had on the maritime industry and its 1.5 million seafarers and their families. With around 90% of global trade taking place by sea, a continuing and escalating conflict in Ukraine will affect security of supply and, not least, the security of the many seafarers who supply the world market with food, fuel and other essential goods on a daily basis. The shipmaster of today has many challenges, but not least being that the average ship has at least three nationalities amongst its crew, with some employing as many as thirty different nationalities.
The escalating crisis in Ukraine makes the shipmaster’s role even more difficult with Russian and Ukrainian seafarers accounting for 14.5% of the global workforce. We call for the immediate cessation of hostilities in Ukraine and for the immediate withdrawal of forces and the territorial integrity and sovereignty of Ukraine be respected We further call on shipowners, ship managers, flag and port states to provide continuous assistance and guidance to shipmasters on how to handle these onboard challenges and ensure that all seafarers are handled with respect and not put in harm’s way.”
3. Marsh advice
Marsh has issued some insights and resources to help navigate the Russia – Ukraine conflict. Marsh says the conflict between Russia and Ukraine has resulted in tragic losses of life, the displacement of hundreds of thousands of people, and political and economic disruptions on a global scale. As the situation evolves, businesses should be mindful of potential risks to their people, assets, operations, or supply chains in the region and globally. The website includes information and insights, along with strategies and guidance that can help people navigate the challenges.
4. Deep sea mining
Following the publication of part one of Watson Farley Williams’ deep sea mining assessment in our last edition, in part two of the series, WFW examines the international legal and regulatory framework and the significant risks that deep-sea mining has the potential to create.
5. In-transit cargo loss
It is common for charterers to make claims or apply deductions based on ‘in-transit loss clauses’ in the crude oil trade. North P&I Club’s David Patterson, Loss Prevention Executive, and Simon Clarke, Senior Claims Executive, explain why it is in the shipowner’s best interests to avoid this type of clause.
In-transit cargo loss clauses generally define an in-transit loss as the difference between the vessel’s gross observed volume (GOV) on completion of loading and before unloading at the discharge port. While this may seem a simple comparison, it is a fundamentally flawed measurement, reflecting a ‘paper shortage’ rather than any physical loss.
One of the main problems with these clauses is that owners may not have the defences that would otherwise be available for an alleged shortage if the claim had been assessed with reference to, for instance, the Hague/Hague-Visby Rules. In addition to putting owners in a difficult position when trying to defend claims made by charterers referencing these clauses, this may adversely impact upon the scope of club cover available in respect of the claim.
During measurement, the GOV is established by subtracting any free water and sediment from the total volume of fluids in the tank, providing the quantity of oil at the given temperature upon loading.
On the voyage to the discharge port, two factors can result in changes to the gross observed volume: a decrease in cargo temperature and an increase in free water.
Cargo temperature decrease
Cargo is likely to cool during the voyage, increasing in density and therefore reducing in volume while its mass remains the same. Even when cargo heating is employed, it is unlikely that tank temperatures at the discharge port will be same as they were at the load port during the tank survey. When the two gross volumes are compared – as required by in-transit loss clauses – this reduction in cargo volume will indicate a paper shortage.
Free water increase
The crude oil production process consists of separating fluids from an oil well into crude oil, gas and water/sediment. While this can be a highly efficient process, crude oil cargoes usually contain a small amount of water and some solids –known as the cargo’s ‘base sediment and water content’ (BS&W).
To put this into context, if a vessel loads 1 million barrels of crude oil with a BS&W of 0.3%, 997,000 barrels of the cargo will be crude oil while 3,000 barrels will contain water and some sediment. Free water is the term used to describe any water that has separated from the crude oil at the bottom of the cargo tank.
This can result in a difference in the reported amount of free water detected upon completion of loading and arrival at the discharge port. Typically, the tank survey at the load port will commence as soon as is practicable after the completion of loading. There is therefore minimal time for any water in the cargo to separate out, and the survey may detect only trace amounts of free water. Consequently, the GOV will be calculated as the entire volume of the cargo tank contents, including any water and sediment.
During the voyage, water and sediment contained in the cargo will have time to separate out, meaning that free water can be detected more readily in the discharge survey. This is done by establishing the interface between the water and oil. While the amount of sediment is not accounted for directly, it is included in the free water figure as the sediment will settle below the water.
When the GOV is re-calculated, free water and sediment is subtracted from the total contents of the tank, with the difference between the volume of free water and sediment detected at the load and discharge ports indicating a paper shortage.
Performing correct calculations
To account for variations in cargo temperature at the load and discharge ports, the cargo must be compared at a standard temperature. This is achieved by applying a volume correction factor to calculate the quantity of cargo at 15o C or 60o F. The term ‘gross standard volume’ (GSV) is used when the GOV is calculated at a standard temperature.
To ensure that any free water and sediment is accurately accounted for during the tank surveys, the total calculated volume of the cargo should be established. This is achieved by adding free water and sediment calculations to the GSV.
Checking cargo documents
The cargo documentation should provide details of the total volume of water and sediment for the cargo. This can be established by subtracting the gross and net quantities listed on the bill of lading or by the BS&W as stated on the Certificate of Quality.
For owners, it is better to avoid any in-transit loss clauses that may override clauses incorporating the Hague/Hague-Visby Rules, such as a Clause Paramount.
The standard pre-printed charterparty clauses are preferable from an owner’s perspective. For example, the widely used Asbatankvoy voyage charterparty has a Clause Paramount (clause 20(b)(i)) that incorporates the Hague/Hague-Visby Rules, as does BIMCO.
6. Crews refused treatment
The International Chamber of Shipping has called on governments around the world to ensure access to medical care for seafarers, after it emerged that crews continue to be refused urgent treatment at ports during the pandemic.
In a recent report, the ILO’s Special Tripartite Committee of the Maritime Labour Convention, commenting on the latest report of the Committee of Experts (made up of 20 eminent jurists) noted “…with deep regret the existence of cases of denial of access to medical care ashore for seafarers, even in situations of the utmost urgency”. Publicly reported examples throughout the pandemic include seafarers with broken limbs being asked to remain on board and take painkillers, a chief engineer vomiting blood not allowed to disembark, and even the body of a ship’s master who suffered a fatal heart attack being refused repatriation.
Governments, many of whom are yet to recognise seafarers as key workers despite encouragement to do so by the UN, have relied on broad ranging ‘force majeure’ defences to deny seafarers medical treatment. Citing ‘force majeure’, governments have bypassed fundamental standards on seafarer wellbeing, such as those contained in the Maritime Labour Convention. However, the ILO found that given that almost two years had passed since the beginning of the pandemic, “…’force majeure’ should not be regarded as a valid reason to deprive seafarers of their rights.”
ICS, which represents 80% of the world’s merchant fleet, echoed the ILO report’s recommendations, urging governments around the world to designate and treat seafarers as key workers, provide access to medical care ashore when needed, and prioritize seafarers for Covid-19 vaccinations.
The ILO’s committee also indicated that denying seafarers medical treatment could further increase pressure on stretched global supply chains. It noted that “…the crew change situation remains critical and appears to be deteriorating, which jeopardises the safe and uninterrupted delivery of vital supplies.” After a peak of some 400,000 seafarers being unable to leave or join ships due to Covid restrictions at the height of the pandemic, a significant proportion remains impacted, according to ICS figures.
ICS’s principal legal director Kiran Khosla said: “The latest report of the ILO’s Committee of Experts follows its landmark finding of 2020, which sent out a strong message to governments that they had failed in their duty of care towards seafarers under international law during COVID-19. Then, the ILO called on governments to recognise seafarers as key workers and to give this practical effect – including allowing them to disembark in port for medical care.
Now the Committee has made it clear that governments can no longer hide behind a so-called act of God to deny seafarers these fundamental rights. “Throughout the pandemic, shipowners, with their ships and crew, have been keeping the world supplied with food, fuel and medicine. But governments have been too slow to recognise seafarers as key workers, harming both their health and the health of global supply chains. Two years after the pandemic began, governments have no excuse for hiding behind force majeure.”
ICS recently released its latest round of medical guidance for ship operators and shipping companies, covering seafarer health and wellbeing, and vaccination best practice. The guidance provides updated information on embarking and disembarking seafarers in accordance with relevant COVID-19 regulations, and new advice on the repatriation of deceased seafarers.
7. Supply chain disruption
The International Chamber of Shipping has warned of supply chain disruption should the free movement of Ukrainian and Russian seafarers be impeded. The Seafarer Workforce Report, published in 2021 by BIMCO and ICS, reports that 1.89 million seafarers are currently operating over 74,000 vessels in the global merchant fleet.
Of this total workforce, 198,123 (10.5%) of seafarers are Russian of which 71,652 are officers and 126,471 are ratings. Ukraine accounts for 76,442 (4%) of seafarers of which 47,058 are officers and 29,383 are ratings. Combined they represent 14.5% of the global workforce.
Shipping is currently responsible for the movement of near 90% of global trade. Seafarers have been at the forefront of the response to the pandemic, ensuring essential supplies of food, fuel and medicine continue to reach their destinations.
To maintain this unfettered trade, seafarers must be able to join and disembark ships freely across the world. With flights cancelled in the region, this will become increasingly difficult. The ability to pay seafarers also needs to be maintained via international banking systems.
ICS has previously warned of a shortage of merchant sailors to crew commercial ships if action is not taken to boost numbers, raising risks for global supply chains. This has been compounded by draconian travel restrictions, brought on by the pandemic, that saw seafarers unable to crew change and resulted in 100’000’s overstaying contracted periods at sea.
Research carried out by ICS reported that the average ship has a mix of at least three nationalities on board, and sometimes as many as thirty. Three languages were the minimum spoken on the average ship.
Guy Platten, Secretary General of the International Chamber of Shipping said: “The safety of our seafarers is our absolute priority. We call on all parties to ensure that seafarers do not become the collateral damage in any actions that governments or others may take.
“Seafarers have been at the forefront of keeping trade flowing through the pandemic and we hope that all parties will continue to facilitate free passage of goods and these key workers at this time.”
8. Crew claims and contracts
Many Gard Members employ Ukrainian and Russian seafarers. Gard outlines some of the Frequently Asked Questions related to employment terms and also the impact of the war on P&I cover for crew claims. The P&I club also considers the effects of the war in Ukraine on contractual obligations in another brief.
See https://www.gard.no/web/updates/content/33217466/war-in-ukraine-impact-on-crew-contracts-claims-and-repatriation- and https://www.gard.no/web/updates/content/33217469/war-in-ukraine-impact-on-contractual-obligations
Families of those who perished on the Herald of Free Enterprise 35 years ago gathered to mark the anniversary in a special service run by international maritime welfare charity Sailors’ Society in Dover on March 6.
The names of all 193 passengers and crew lost shortly after the roll-on roll-off ferry left Zeebrugge in Belgium were read out during the service. Many of those on board had taken advantage of a newspaper promotion offering cheap trips to the continent.
“I still feel the loss of my aunt and uncle as powerfully as I did in 1987,” said Kim Spooner, who was eight at the time and who read at the service this year.
“It’s hard to believe it is 35 years since that terrible night when so many lives were lost and changed forever.
“I am so grateful to Sailors’ Society and St Mary’s Church in Dover for continuing to mark the anniversary of this tragedy and for honouring the memory of our loved ones. I do not want the circumstances of this tragedy to ever be forgotten.”
Sailors’ Society chaplains comforted and supported families and survivors affected that night. Every year since, the charity has organised the memorial service and the prayers that follow at the seafront close to the port, where the first families gathered for news 35 years ago.
Last year the pandemic meant families had to join a shortened service via Zoom. But this year families were able to gather together in person again, with the option of joining online.
Sailors’ Society’s chief executive Sara Baade said: “For 35 years this tragedy has remained in the hearts of everyone affected, including our chaplains who comforted and supported the families and survivors. This memorial service gave us the chance to join with families in remembrance not only of the loved ones lost, but the many heroic acts of crew and passengers that night.”
10. Lines skipping port calls
Economic recovery is being hindered by lines skipping ports according to a new report. The report reveals the extent of capacity restriction as a result of scheduled port calls skipped and blank sailings by lines during 2021. Certain regions will suffer economic impact hindering post-pandemic recovery.
The MDS Transmodal (MDST) research, commissioned by Global Shippers Forum (GSF) found that global ports lost over a third of their expected capacity to ship containers during 2021, creating delays and disruption for shippers and economic harm to some smaller developing nations.
Lost capacity is a measure of the total number of container ship slots that were expected to be available at the port but did not materialise because the port was skipped, or the entire service was blanked by the shipping line.
The ports of Colombo (Sri Lanka) and Piraeus (Greece) have been especially hard hit, with about 40 per cent of the expected container capacity failing to arrive in the last quarter of 2021, in comparison with a pre-Covid level of between 15-20%. In addition, in the European, Gulf and Indian Sub-continent (ISC) region, Felixstowe (UK) and Jebel Ali (UAE) failed to see around a third of their expected capacity.
In Asia Pacific, the picture reported showed similar levels of capacity lost with Port Klang (Malaysia) suffering a 40% shortfall and Melbourne (Australia) and Tauranga (New Zealand) down by around a third of the expected container capacity during the second half of 2021. In 2019, average no-shows at these ports amounted to between 10 and 15% of expected capacity.
“When we analyse the capacity offered by the shipping lines, two major elements are to be considered: 1. the intention to call (or not) at a given port and 2. the calls actually made,” explains Antonella Teodoro of MDST. “Looking at the data from 2019 Q1 onwards, we observe that carriers have been reducing the scheduled capacity offered to some ports but also reducing the level of capacity actually provided.” These reductions have resulted in deterioration of connectivity with some countries losing direct connections, she added.
Most of the expected vessels would have already been fully occupied by containers collected at ports called at earlier on the service. Indeed, the decision to skip a port is often taken because there is no space on board to take any more, or so few spare slots as to make the call uneconomic. As a result, the collapse in service levels available to shippers at the ports affected, and in the hinterlands they serve over the period is stark, and amounts to far more than the inconvenience of having to wait for the next ship.
“Skipped port calls have multiple effects on shippers,” observes James Hookham, GSF director. “They create local upward pressure on shipping rates, as shipping line agents ‘auction-off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers. More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and Covid restrictions”
“Ports reliant on calls from vessels on Asia-Europe strings have suffered especially badly, adding to pressures on local economies as they struggle to recover from the effects of the global pandemic,” continues Hookham. “Such schedule alterations translate into huge aggregate capacities lost to importers and exporters.”
He concludes, “Skipped ports and blanked sailings have evidently become central to the way shipping lines are managing the capacity of their heavily utilized fleets. As the pressures caused by the Covid-19 pandemic ease GSF will be monitoring the restoration of service predictability for shippers at these and other key global ports to ensure the benefits of service reliability and frequency promised by consortia and alliance operations are reinstated.”
The results of this on-going analysis of lost capacity will now become part of the regular quarterly Container Shipping Market Review for shippers produced by MDST on behalf of GSF.
11. Emerging port technology
The forces that influence UK port operations are evolving. As the sector responds to new demands, the challenge of creating more sustainable and digitally-optimised port operations is highly likely to impact on the future pipeline of skills and labour requirements in the sector.
To mark the start of National Careers Week in the UK, the British Ports Association (BPA) has released a new report outlining the future skills agenda for port operators and their supply chain partners. Produced by maritime innovation agency Thetius, this report explores the high level prospects for the ports sector as it adapts to harnessing emerging technologies to stay competitive and remain fit for purpose in a digitally-enabled and decarbonised global supply chain.
here to read the ‘Terminal Velocity’ Report
Notices & Miscellany
The Center for Ocean Policy and Economics (COPE) has formed a working group of international leaders to support the work of the IMO’s Maritime Safety Committee in the area of mariner welfare and safety. The initial work of the group will revolve around the IMO’s Model Course 1.21 – Personal Safety and Social Responsibility, which will be discussed by the Maritime Safety Committee in May 2022.
Decarbonisation in shipping
The London Shipping Law Centre and Hill Dickinson will be holding the 2nd webinar in an on-going series on decarbonisation and shipping. As regulations in this area emerge, how do the parties to commercial shipping contracts go about adapting those contracts to accommodate the new rules? Is this a time to radically rewrite relationships? Or will tweaking and new ‘standard clauses’ suffice? The webinar will be held on Thursday 24th March at 1600 GMT.
The British Tugowners Association annual conference, taking place at Old Thorns, Liphook on Wednesday 11 May 2022 will consider the question: What does the future of towage look like? With discussion from leaders of Government and industry, the Conference will speak to four key themes: safety, decarbonisation, skills and autonomy.
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