How is the Global Shipping Industry Placed Amid COVID-19 Crisis?

  • Jun 15, 2020 AEST
  • Team Kalkine
How is the Global Shipping Industry Placed Amid COVID-19 Crisis?

Summary

  • International Shipping industry acts as a backbone to the world trade and has faced significant challenges during the COVID-19 induced lockdowns and restrictions.
  • Over 400,000 members are stuck at sea, and seafarers, with a medical emergency like stroke, are not allowed to enter the port because of the travel restrictions.
  • ILO, on 8 June 2020, called for essential, co-ordinated measures to release 150k to 200k seafarers stuck at sea.
  • Cyber threat is another challenge the industry faces as the cyber-attacks have gone up by 400% since February 2020.

The international shipping industry is a significant pillar of world trade as it carries ~90% of the trade that happens around the world. It is because of the shipping industry that intercontinental trade, massive transport of raw materials, and import and export of reasonable food & manufactured goods are possible.

The expansion in the seaborne trade has brought benefits for the customers worldwide with attractive freight costs. The improved efficiency and growing economic liberalisation increase the likelihood of industry expanding further in the future. Presently, there are more than 50,000 merchant ships that trade globally and transport all types of cargo.

The global shipping industry, however, has come under the spotlight recently due to the challenges faced amid the COVID-19 crisis. The novel coronavirus has opened Pandora’s box of problems within the industry. Earlier the challenges faced by industry was that the seafarers who were denied medical assistance by the port authorities and now is a significant increase in the cyberattack by 400%.

In this article, we would understand these recent challenges faced by the global shipping industry.

Challenges faced by Ship Operators and Seafarers:

International Chamber of Shipping or ICS is the primary international trade association for both ship operators and owners. It is involved with all technical, legal, employment affairs as well as trade policy-related matters that affect the global ship functions.

On 21 May 2020, ICS, in its press release, highlighted that the coronavirus pandemic is generating considerable difficulties for the ship operators and seafarers. It also updated about the ICS software that keeps track more than 25 million hours of work on board ships that happens every month by seafarers. Over the past 12 months, the software noted a fall in the rate of non-conformances by 25%. As per the ICS software, seafarers can handle shipboard working activities in line with the IMO & ILO rules amid the coronavirus pandemic. Further, ICS is keeping track of the working and rest hours of the global seafarer via its ISF Watchkeeper compliance software and is used on more than 8,000 ships which gives evidence of compliance with the international regulations as per the flag States and Port State Control requirements.

On 28 May 2020, ICS in its press release, addressed the health concerns of the seafarers amid COVID-19 crisis. ICS updated that in some instances, the port authorities were not providing medical assistance to seafarers. Seafarers who were experiencing medical situations not linked to COVID-19 were not allowed to enter the port or were refused medical evacuation for several days.

The situation is alarming as seafarers who are suffering from a severe medical emergency like a stroke are being denied medical evacuation.

There are more than 400,000 crew members that are stuck at sea or house due to the travel restriction imposed by the countries due to COVID-19 outbreak. Many crew members have worked the number of months beyond their contracts and some over a year.

As per Guy Platten, secretary-general of the ICS, the situation is alarming as the longer the situation continues, there might be a risk to the global supply chain. He also pointed out that the folks cannot work for an indefinite time.

Apart from this, many seafarers are struggling to get entry or exit visas.

Spending a prolonged period, the seafarers are at threat from the unfavourable health impacts. On that front, new guidance is being issued by ICS for the ship operators and owners to tackle the unwell seafarers.

International Labour Organization, or ILO, on 8 June 2020, called for essential, co-ordinated measures to liberate 150k to 200k seafarers who are stuck on board due to the measures to curb COVID-19 spread.

Further, ILO appealed governments, immigration, health as well as maritime authorities to accept seafarers as a key worker as they make sure the flow of trade & movement of essential medical supplies, food, safety devices as well as crucial goods during this pandemic.

Cyber-attacks up by 400% since February 2020:

ICS, in its recent press release, highlighted that the rising pace of digital connectivity on board ship has resulted in the rapid development of onboard communication. Digitisation has challenged the traditional practices followed by the shipping industry. It is because of the digitisation that the shipping industry gets instant access to the information.

However, there is another big challenge pointed by an Israeli maritime cyber-security expert Naval Dome recently during the first week of June 2020.  Naval Dome apprised about an increase in the cyber hacks by 400% since February 2020.

Naval Dome has built the highly extensive and secure maritime cyber defence solution for critical onboard systems.

The rise in the cyber hacks is because of the increase in malware, ransomware and phishing emails exploiting the coronavirus crisis.

The increasing cyber threat is bringing maritime safety at risk as over 300,000 marine assets operate exposed to cyber-attacks. This is a further alarming situation for the maritime industry.

Some of the direct impacts of the cyber threat might cost billions of dollars and let global supply chain cripple. Other than this, the shipping companies, as well as the industry itself, are highly at risk to the cyber-attacks.

A Glance at the Australian Maritime Industry

As per the report published by the Australian Maritime Safety Authority (AMSA) on 28 May 2020, the cases of the coronavirus are rising in Australia, and the situation is changing fast. In the past 24 hours, Australia has seen 18 new cases of COVID-19 (As on 14 June 2020 at 9:00 PM AEST). The Department of Health is heading the government response to COVID-19. They have released a coronavirus data for the maritime industry.

ASMA remains accessible for businesses and would give regulatory services to its clients and the broader community. Regional offices remain temporarily closed to prevent direct interaction with the customers. However, they can be contacted via email or phone.

 


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