1. Forty years on
2. Merchant Navy cadet scheme
3. Over a barrel?
4. Refund guarantees
5. Poseidon Principles
6. Renewable energy demand
7. Maritime Labour Convention
8. Looking at laytime
9. Women in shipping
10. Chinese lockdowns
11. Ship to ship transfer
12. Port in a storm
13. Energy efficiency report
Notices & Miscellany
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced. Write to: email@example.com
1. Forty years on
By Michael Grey
What were you doing, forty years ago? For the crews of 52 British merchant ships, it was a tale of the unexpected, with their vessels “taken up from trade” or chartered by the government as part of the extraordinary operation to retake the Falkland Islands from the Argentine invader. With the ships of the Royal Navy and 22 vessels of the Royal Fleet Auxiliary, this fleet formed Operation Corporate, in the ultimately successful mission that defied distance, filthy weather and a determined enemy, albeit at the cost of many lives.
The crews of the merchant ships were volunteers who constituted the normal complements of the vessels in their normal trading lives.
Few would have had any experience of hostilities and only those who were reservists would have ever worked with the Royal Navy previously. In this strange new role, they worked under military orders, undertaking all sorts of unfamiliar tasks, frequently in hazard and working with every branch of the armed forces. They found themselves operating with warships, helicopters, transferring personnel, fuel and every form of logistics support, often in high seas and in terrible weather. While hostilities prevailed, they were always potential targets for a determined and brave enemy air force. They were, from all accounts, very professional, working with patience and good humour and established a fine rapport with their armed service counterparts.
Looking back at the operation from this distance, the whole operation appears increasingly remarkable; a sort of “can do” spirit that seems to resonate from another age. It was an extraordinary period, with the first merchant ships being requisitioned just two days after the invasion on 2nd April, to the surrender of the Argentine forces on the 14th June and the subsequent gradual return of the ships and their personnel to their normal lives. Left behind on the sea bed was the Atlantic Container Line’s Atlantic Conveyor, sunk on the 25th May, with the loss of her master Captain Ian North and 11 of those who had sailed in her.
“Without the ships taken up from trade” said Admiral Sir John Fieldhouse, Commander in Chief of the Fleet, the operation could not have been undertaken and I hope this message is clearly understood by the British nation”.
Well, it may have been understood in the immediate aftermath of the Falklands war, but it is probably fair to suggest that a sort of amnesia took hold, as the remainder of the 20th century ticked away. The merchant ships came home to a warm welcome, but for the British crews who had served in them, as with their counterparts aboard other ships flying the Red Ensign, there were to be increasingly poor employment prospects.
The whole world was suffering from an overcapacity of shipping, rewards were poor and the future bleak. The UK fleet was to face an unprecedented contraction, with mass redundancies. The future, it seemed, lay with those who could operate ships cheapest, and that went for the crews, as the winnowing of the workforce, in all nations deemed “high cost”, took its toll. The future also belonged to the open registers, the flags of convenience, casual labour and the “international contracts” that were part and parcel of the deal.
But surely, one might enquire; hasn’t the strategic value of a merchant navy resonated at all with our governing classes? It had, after all, been proved in practically every war throughout history, with the Falklands just the latest example. From time to time there were efforts made in Parliament, while maritime bodies and lobbies would raise their voices. They were politely listened to, but some far more compelling topic of the day would soon distract successive governments. And after the fall of Communism and the apparent disappearance of more formidable potential enemies, there was a “peace dividend” to enjoy, defence spending to be reduced and talk of a strategic value of merchant shipping a subject which became largely surplus to requirements. There was always the USA, with its Sealift Command and a Jones Act to protect seafaring employment.
But forty years on, with a war in Europe, we suddenly don’t talk about peace dividends any more. What happens if there is a sudden need for merchant shipping for “strategic” purposes? You can probably find the tonnage, although there is precious left to requisition and “Ships Taken Up From Trade” will cost plenty when the government shipbroker finds himself being given short shrift by owners of brass plates in the Bahamas and entities in the Marshall Islands. They would probably tell him to get stuffed, at his proposed rates.
But let us not forget that those 52 merchant ships that sailed south forty years ago, came with their crews, and there are far, far fewer of those professionals available. We might recall that there are 800 fewer than were around a couple of months ago! We have a depleting maritime labour force, with cadets struggling to find ships available to give them sea time. One doesn’t want to be too negative, but the only serious employer of seafarers on British ships is the Royal Fleet Auxiliary. And the all-important dearth of personnel, forty years on, would be the real stumbling block, when some seer talks wisely on the media about “strategic” shipping.
Michael Grey is former editor of Lloyd’s List.
2. Merchant Navy cadet scheme
FORMER cadets of one of Britain’s leading training ships launched a sponsorship programme at their AGM recently that will see a new stream of merchant marine cadets being trained under the name of their college, HMS Worcester.
The programme will initially sponsor and support a small number of Merchant Navy officer cadets for the whole of their three to four year training, including statutory seatime, and to the required standard for sitting for their 1/11 Officer of the Watch certificate and a suitable degree. The Worcester Merchant Navy Cadetship Scheme is being launched in partnership with Trinity House of London, the UK’s leading, endowed, maritime charity.
Major sponsors of WMNCS are expected to include former Worcester cadets and shipping industry and maritime sector leaders. Trinity House, which will be managing the cadets’ training for WMNCS, is matching the funding for each cadet raised by the Scheme.
Known as the Incorporated Thames Nautical Training College, HMS Worcester trained thousands of merchant marine cadets – later officers – during the ship’s more than 100 years of service. Recently the college’s alumni group, many of whom have had full maritime industry careers, agreed to inaugurate the scheme, which it is hoped will go on to have at least one new ‘Worcester’ cadet in training at all times.
Speaking at the Scheme’s launch, Peter Melson, ex-Worcester cadet and former Royal Navy Commodore, said: “The current world situation, with its gradual withdrawal from globalisation, has led to an urgent requirement to onshore our training and manning requirements. This training scheme meets the government requirements in this respect and we hope it will attract wide support”.
HMS Worcester was founded in 1862 and, until the time the college was integrated into a successor college in 1968, trained cadets in a series of four ships, which included the famed Cutty Sark tea and wool clipper.
Peter Melson, who is leading the campaign for funding WMNCS, explained: “In setting up the Worcester scheme we were keen to replicate as far as possible the outstanding training that we received at Worcester. Training today’s Merchant Navy officers to a safe and professional standard is an exacting business and, understandably, is not cheap. In the past shipping companies generally trained their own cadets but those days are largely gone and a young person looking for a career at sea often has to find their own sources of funds. This is where the Worcester scheme, in tandem with Trinity House, steps in and offers full payment of all training and seagoing costs, after government SMarT assistance is taken into account”.
1. For WMNCS information, contact Commodore Peter Melson on +44 (0) 7795 878346
2. Contact Trinity House on +44 (0) 77481 6900
3. Over a barrel?
Do bunker suppliers have charterers over a barrel? This is the question asked in an opinion piece by Gard P&I Club leading on from bunker supply woes in Singapore recently. As the Maritime and Port Authority of Singapore continues to investigate HSFO bunkers found to contain harmful chlorinated hydrocarbons supplied in the first quarter this year, Gard reviews the imbalance between the position of time charterer vis-à-vis vessel owners versus the charterer’s recourse opportunities under the bunker sale contract.
Gard has also issued an advisory note on fires on board vessels. Fuel leaks and oil soaked insulation in engine rooms, clogged nozzles of fixed fire extinguishing systems, malfunctioning fire water pumps, holes in ventilation ducts – the list of unacceptable fire safety systems and arrangements observed during port state control inspections is long – and more worrying, it does not change much from one year to another.
4. Refund guarantees
Avoiding drafting pitfalls as far as refund guarantees are concerned is the topic for discussion in a recent opinion piece by Ince. Refund guarantees are often described as the cornerstones to shipbuilding projects and the buyer’s main security. Although they do not strictly form part of the shipbuilding contract, a shipbuilding project is unlikely to go ahead at all without one. It is therefore important to understand the different types of guarantee instruments, and the impact each has in practice on the guarantor’s obligations to pay and the buyer’s entitlement to recovery. A well-drafted guarantee provides certainty to the parties and strikes a balance between their respective entitlements and obligations.
Under shipbuilding contracts, the buyer usually agrees to pay out significant pre-delivery instalments of the price to the builder before acquiring title to the ship on delivery. The contract also usually gives the buyer the right to cancel the contract for certain types of builder default (e.g. insolvency, delay, failure to meet defined vessel specifications, etc.).
Without security during the building phase, the buyer will be reluctant to exercise cancellation rights for such defaults. In order to guarantee that pre-delivery instalments are refundable, the buyer will often require the builder to obtain an undertaking (i.e. a refund guarantee) from a creditworthy bank or other acceptable guarantor, to refund pre-delivery instalments with interest if the builder fails to do so in the event of lawful cancellation.
5. Poseidon Principles
Watson, Farley & Williams partners Toby Royal and Mike Phillips have put pen to paper to discuss the Poseidon Principles for marine insurance, which were officially launched in December last year.
For more details see https://www.wfw.com/articles/
6. Renewable energy demand
New data released has revealed how the global shipping industry will require the equivalent of the world’s entire current renewable energy demand in order to replace fossil fuel use.
Fuelling the Fourth Propulsion Revolution, authored by Professor Stefan Ulreich from Germany’s University of Applied Sciences, and commissioned by the International Chamber of Shipping, highlights the enormous opportunity for investors and governments represented by the global shipping industry’s need for new, green fuels.
To reach the industry’s 2050 net zero goal, shipping’s fuel needs would require electricity from renewable sources to increase by up to 3,000 TWh, the report showed. This is the equivalent of the entire world’s current renewable energy production.
It found that to achieve the IEA’s Net Zero Emissions by 2050 scenario, the world would need an 18-fold increase in existing renewable production capacity.
Taking the global trading of hydrogen as an example, the report identified substantial potential benefits for exporting and importing countries, particularly in the Global South. This is due to the expected production cost differentials of such fuels across the world (expected range of €72.60/MWh to €156.40/MWh in 2050).
The cost range reflects the abundance of renewable potential, such as solar and wind power, in many African and Latin American countries, which can generate the electricity needed in the production of hydrogen fuels at much lower cost.
The report identifies the first movers who are looking to seize these investment opportunities, including Germany, Algeria, and Chile, who have signed multiple bilateral agreements on the production of hydrogen fuels (seen as key for powering ships)
Unveiled at the World Ports Conference in Vancouver, Canada, Fuelling the Fourth Propulsion Revolution urgently calls for increased R&D in green fuels, and to specifically develop production infrastructure in key geographic locations such as Latin America and Africa.
Estimates show a production potential of more than 10,000 TWh for net zero carbon fuels in coastal regions worldwide. Shipping views investment in these areas as key to helping countries realise the potential gains present in their bilateral agreements.
Up to this point, there continues to be a lack of investment in zero-emission technologies, with the IEA highlighting that the total amount of corporate R&D investment for maritime has decreased, from $2.7 billion in 2017 to $1.6 billion in 2019
Yet by 2050, at least half of net zero fuels traded globally are expected to be moved by ships, according to the International Renewable Energy Agency. The report indicates that this makes maritime a key enabler of the decarbonisation of land-based industrial sectors.
The full report is available here.
7. Maritime Labour Convention
The UN International Labour Organization (ILO) has agreed to new measures to strengthen the Maritime Labour Convention (MLC), based on lessons learned from the Covid-19 pandemic.
At the ILO meeting that took place between May 2 – 13 in Geneva, Switzerland, delegates agreed to implement amendments on: bolstering legal requirements for seafarers to be able to access medical care ashore; strengthening health and safety PPE policies on board ships to protect against accidents; and to further facilitate seafarers’ communication with their loved ones ashore.
A new ILO report published in advance of the negotiations highlighted governments’ failure to comply with critical provisions of the MLC during the pandemic, resulting in preventable deaths, and an enormous toll on seafarers’ mental health. At the height of the pandemic, 400,000 seafarers were affected by the crew change crisis, unable to return to shore or access ships due to draconian travel restrictions.
The negotiations occurred against the backdrop of the current seafarer crisis in Ukrainian ports and the Sea of Azov. Governments reiterated their support for the ILO resolution calling for the swift and safe disembarkation and repatriation of the 500 remaining trapped seafarers. They called for the prompt delivery of critical supplies, such as food, water, and medicines to these key global workers caught in the conflict zone.
In advance of the meeting, ICS also published a report outlining the impact of COVID-19 on shipping, seafarers and maritime labour markets, and recommendations to mitigate future crises.
Max Johns, spokesperson for the shipowner group at the ILO meeting, commented: “These were very intense negotiations, but we are extremely pleased that all sides of this global tripartite structure ultimately agreed on new policies that are fit for purpose, and which put into practice some of the practical lessons that must be learned from Covid-19.” Natalie Shaw, ICS director of employment affairs, added: “Though this is a great starting point, further reforms at a global level are necessary to ensure that the shipping community is better prepared and coordinated to address future shocks, including and beyond a pandemic.
“We are pleased with the success of these negotiations, but now we must map out what more can be done. ICS will work to ensure that the improved cooperation between states, ship owners, and workers remains, for the betterment of the whole maritime sector and the movement of global trade.”
Corinne Vargha, Director of the International Labour Standards Department of the ILO, remarked: “We welcome the adoption of these amendments which are a testimony to the added value of tripartism and international social dialogue. The outcomes of this meeting will in effect reinforce the relevance and impact of the Maritime Labour Convention, 2006 (as amended). The ILO will continue working with governments, seafarers and shipowners to tackle challenges as they emerge and ensure a full and harmonious implementation of the Convention.”
8. Looking at laytime
Interruptions and exceptions to laytime are highlighted in a story by West P&I Club ‘s Julien Rabeux, Head of Claims (Singapore) with additional input from Mark Doyle of Mills & Co.
9. Women in shipping
The Mission to Seafarers has just published a report called ‘Beyond the 2%, Women Seafarers and their Lives at Sea: Reflecting on Our Call to Care.’ The report is intended to act as a discussion document for the charity and other maritime welfare providers. It considers the unique challenges faced by women at sea and how organisations can tailor their support to contribute towards a better future for female seafarers.
The impact of the pandemic is still being experienced by seafarers as a whole. However, in light of the first International Day for Women in Maritime in recent days, the Mission feels that now is an opportune time to focus on the experiences of women at sea.
Despite many initiatives, women are still under-represented in the maritime industry and make up just 2% of the world’s estimated 1.2 million seafarers. More needs to be done to attract and retain women in the industry.
Both male and female seafarers experience a range of challenges when working at sea, but there are some that are specific to women as they must adapt to a male dominated working environment. The Mission aims to highlight some of the difficulties that women still encounter at sea in this report, including challenges specific to different vessels, such as cargo ships, cruise ships and superyachts.
It is hoped that the report will help The Mission to Seafarers (and other maritime welfare providers) to reflect on its relationship with women seafarers, the care it provides to them, and how it might shape its services for the future so that it meets the needs of the women seafarers who visit ports and our centres around the world.
Revd Ijeoma Ajibade, Regional Director Europe, The Mission to Seafarers, said: “Women seafarers around the world are doing incredible work despite the challenges that they encounter. All seafarers work in a complex and difficult environment, but women seafarers face additional difficulties because of who they are. At The Mission to Seafarers, we are making a clear and firm commitment to women seafarers everywhere, that we will respond to their needs and find ways of supporting them through our network of chaplains, volunteers and seafarers’ centres. This publication marks the start of a conversation about how we can care for the many dedicated women who work on our oceans today.”
As an international organisation, The Mission to Seafarers is well placed to discuss these challenges and share ideas within its global Mission family. This report will hopefully act as a catalyst and help people generate ideas which can then be implemented across the Mission family.
An IMO-WISTA Women in Maritime survey highlights current gender diversity across the sector and sets a benchmark for progress. Gender diversity in maritime is extremely fragmented by sector, according to data from the newly- published 2021 IMO-WISTA (Women’s International Shipping & Trading Association) Women in Maritime Survey Report.
The report, launched on the first IMO International Day for Women in Maritime, contains information about the proportion and distribution of women working in the maritime sector from IMO Member States and the maritime industry. The data demonstrates that women account for only 29% of the overall workforce in the general industry and 20% of the workforce of national maritime authorities in Member States.
IMO Secretary-General Kitack Lim said, “Benchmarking the current state of the sector is vital to measure results. The Women in Maritime Survey 2021 shines a spotlight on areas in which IMO Member States and the wider maritime industry are performing well – and, more importantly, those where additional attention, resources and encouragement are needed. By actively empowering women with the requisite skills, maintaining a barrier free working environment, we create truly sustainable systems of gender equality.”
The report highlights great variation amongst individual sub-sectors. According to data gathered from member states, search and rescue teams in national maritime authorities account for significantly fewer women staff (just 10%) as compared to female diplomats (33%) and training staff (30%). Industry data shows that women seafarers make up just 2% of the crewing workforce and are predominately found in the cruise sector, while in shipowning companies, they made up 34% of the workforce.
WISTA International President Despina Panayiotou Theodosiou said, “The knowledge we have gathered about gender diversity in the maritime industry through this first Women in Maritime Survey 2021 is an important step in our ambition to create holistic gender diversity. As a first snapshot, this survey gives telling evidence of how much work still needs to be done. But it also shows us where there are a few bright spots. The maritime industry can see for itself which sectors are pushing ahead with diversity, and which are not.”
The 2021 IMO-WISTA Women in Maritime Survey Report can be downloaded from here.
10. Chinese lockdowns
Consultant Drewry warns that the latest disruption of the global container system will see things worsen for beneficial cargo owners before a partial improvement.
The Chinese lockdowns are hitting a global container distribution system that is already severely stressed and facing reduced capacity due to pervasive congestion. A positive reading of this situation could be that the reduction in volumes will speed up the normalisation of liner network performance and port productivity. Indeed, port congestion is easing in the US and Europe.
In Shanghai, where lockdowns started in mid-March, probably the most immediate impact was on road hauliers who found themselves having to quarantine 14 days before being allowed to exit the ‘infected area’ and return to the port’s hinterland. Obviously, this added significant cost to inbound containers that had already landed at the terminal and could not be evacuated. Other imports, as well as most export flows, were diverted to neighbouring ports like Ningbo and even Qingdao. Unfortunately, these ports were already congested themselves prior to this additional cargo influx.
For more details see https://www.drewry.co.uk/
11. Ship to ship transfer
The Oil Companies International Marine Forum (OCIMF) has published a new study analysing ship-to-ship transfers under varying environmental conditions.
Ship-to-ship transfer operations take place across different geographies and under varying environmental conditions, adding to the complexity and risks associated with such transfers. Despite best efforts, mooring line failures are still a leading cause of incidents, potentially causing harm to people and the environment thus jeopardising the integrity of such transfers. This information paper, Mooring Load Analysis during Ship to Ship Transfer Operations, aims to support relevant stakeholders in making their own assessments to determine suitable weather criteria and ascertain an appropriate weather window for STS operations.
The current study used advanced mooring line load simulation technology for enhanced assessment of mooring line loads under varying environmental conditions for a variety of ship-type combinations, including LPG and LNG carriers.
The study is available as a free to download information paper on OCIMF’s website here.
12. Ports in a storm
The TT Club has produced some advice on issues relating to dangers posed by weather conditions. TT recently spoke at a Port Technology International (PTI) event in collaboration with Vaisala, recognising the breadth of challenges presented by climate change to the global port and terminal sector. The panel considered a variety of risk exposures including flood, tidal surge and wind microbursts.
The club says meteorological capabilities have improved in recent years, and Vaisala (amongst others) provides innovative climatic measurement solutions to assist operators in mitigating risk, which can afford an opportunity to develop understanding of local climatic conditions. A combination of the ability to ‘now cast’ and forecast underpins data driven decisions linked to risk mitigation strategies, such as when to cease operations or take action to protect property and assets.
TT Club also considers recent storm events to draw risk guidance from ports and shipping container terminals. See https://www.ttclub.com/news-
13. Energy efficiency report
The Blue Sky Maritime Coalition (BSMC) has released a new report entitled A Perspective on IMO Efficiency Measures: Opportunities for Improvement which highlights key opportunities to improve current international efficiency measures.
“This report is a great example of industry collaborating to find opportunities for improvement and spurring further discussion among key stakeholders. As a member-led organization focused on decarbonizing the maritime industry, BSMC brings together diverse perspectives with the goal of getting to net-zero emissions by 2050, and this report offers another step in that direction,” said David Cummins, BSMC president and chief executive.
The report offers insights on how decisions made by charterers can affect vessel operations, ultimately impacting the efficiency rating of ship owners. The report concludes that more work will be needed to fine tune the existing calculation method and benchmarking. Maritime stakeholders welcome the opportunity to improve vessel operational performance through robust reporting regimes, necessary to consistently measure emissions.
To address the issues raised, the report recommends mutual responsibility and obligation by both the charterer and ship owner to reduce emissions. To accomplish this, both parties must have transparent negotiations and data sharing under a new era of chartering contracts where environmental key performance indicators become instrumental to vessel selection criteria and commercial utilization.
To read more, download a copy of the report by clicking here.
Notices & Miscellany
The UK Chamber of Shipping summer lunch is returning on 14th June 2022 and there will be a chance to hear from Jenny Gilruth MSP, Minister for Transport who will deliver a keynote speech.
(With thanks to Paul Dixon)
Q: How many lawyers does it take to change a light bulb?
A: Such number as may be deemed to perform the stated task in a timely and efficient manner within the strictures of the following agreement
Whereas the party of the first part. also known as “The Lawyer” and the party of the second part, also known as “The Light Bulb”, do hereby and forthwith agree to a transaction wherein the party of the second part (Light Bulb) shall be removed from the current position as a result of failure to perform previously agreed upon duties, i.e., the lighting, elucidation, and otherwise illumination of the area ranging from the front (north) door, through the entry way, terminating at an area just inside the primary living area, demarcated by the beginning of the carpet, any spillover illumination being at the option of the party of the second part (Light Bulb) and not required by the aforementioned agreement between the parties. The aforementioned removal transaction shall include, but not be limited to, the following steps:
1) The party of the first part (Lawyer) shall, with or without elevation at his option, by means of a chair, stepstool, ladder or any other means of elevation, grasp the party of the second part (Light Bulb) and rotate the party of the second part (Light Bulb) in a counter-clockwise direction, said direction being non-negotiable. Said grasping and rotation of the party of the second part (Light Bulb) shall be undertaken by the party of the first part (Lawyer) to maintain the structural integrity of the party of the second part (Light Bulb), notwithstanding the aforementioned failure of the party of the second part (Light Bulb) to perform the aforementioned customary and agreed upon duties. The foregoing notwithstanding, however, both parties stipulate that structural failure of the party of the second part (Light Bulb) may be incidental to the aforementioned failure to
perform and in such case of the party of the first part (Lawyer) shall be held blameless for such structural failure insofar as this agreement is concerned so long as the non-negotiable directional codicil (counter-clockwise) is observed by the party of the first part (Lawyer) throughout.
2) Upon reaching a point where the party of the second part (Light Bulb) becomes separated from the party of the third part (“Receptacle”), the party of the first part (Lawyer) shall have the option of disposing of the party of the second part (Light Bulb) in a manner consistent with all applicable state, local and federal statutes.
3) Once separation and disposal have been achieved, the party of the first part (Lawyer) shall have the option of beginning installation of the party of the fourth part (“New Light Bulb”). This installation shall occur in a manner consistent with the reverse of the procedures described in step one of the self-same document, being careful to note that the rotation should occur in a clockwise direction, said direction also being non-negotiable.
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