Lockdowns, stranded containers, ships waiting several weeks for a slot outside the world’s biggest terminals—that’s been the reality of global trade since early 2020.

The pandemic triggered record consumer demand, overwhelming supply chain capacity, creating port congestion and causing a lack of truck drivers and warehouse workers. Supply chain congestion issues and international sanctions have pushed the already disjointed supply chain beyond its limits. As a result, companies across the globe have dealt with delayed goods and empty shelves.

The pandemic created a massive increase in consumer demand for electronics, furniture and building materials, which accelerated our customers’ online presence and need for omnichannel solutions. As a result, more than $38B USD worth of bookings are now placed through the Maersk.com platform, which makes it one of the world’s largest B2B websites. This monumental shift made it apparent that the global supply chain needed to be restructured to streamline the flow of goods to consumers.

That’s why we’ve taken a huge leap in our digital transformation over the last 12 months, putting us well ahead of our planned progress.

Our digital transformation enables us to better serve customers by optimising and integrating their supply chains. It also releases resources in our customers’ supply chain, so they can focus on their business and create greater value for their commercial pipeline and shareholders—instead of spending time on supply chain management.

Today, customers can book a container with a few taps on their smartphone or tablet. This was unheard of a couple of years ago—when confirming an order took several touchpoints via email and phone.

A breakthrough

Covid-19 has also changed the priority of logistics in the business community. Before the pandemic, supply chain management was a question of “just in time,” while stock management evolved around having just enough supplies to match demand. The trend was a cost-cutting manoeuvre, but ultimately made companies vulnerable to the slightest disruptions in their porous supply chains like bad weather, accidents and the pandemic.

Supply chain management has historically been a task shared between procurement, logistics and even finance. Besides an extensive amount of time and lengthy decision-making processes, this also led to a lack of flexibility, agility and manoeuvrability in the supply chain.

The consequences of Covid-19 and other unforeseen events over the past two years have turned the supply chain upside down. Today, security of supply and stock management are amongst the main priorities in executive management and are part of quarterly reporting in most companies. Supply chain strength and confidence shapes earning potential and the response of financial markets.

Even though the business community has embraced supply chain digitisation to a large extent, there’s still a lack of artificial intelligence and data utilisation.

There’s a good reason for that. Operating a manual compounded supply chain makes it almost impossible to collect relevant data, since it’s spread across up to 30 different parties. On top of that, collecting data is an immense task when the ability to make fast decisions is crucial to secure the flow of goods.

At A.P. Moller – Maersk, we collect and receive feedback from more than 100,000 customers which gives us unique insights into their needs and movements of global markets.

We’re investing massively in the development of new digital tools and products that better integrate logistic solutions and makes it easier for our customers to reroute or find alternative means of cargo transportation when supply chain disruptions occur.

The current widespread congestion and lack of capacity has underpinned the need for rethinking and optimising global supply chains. The rise of e-commerce and online shopping, where consumers expect day-to-day delivery, has increased the need for a broader and longer-term relationship between logistic companies and their customers. Consumers have a choice, which means they will shop elsewhere if they don’t have visibility or an ETA when they shop online.

That is why we’re in the middle of a historic breakthrough. One as big as the containerisation of the shipping industry in the 1960s.

Cultural transition

The new reality demands a lot from stakeholders across the industry. It’s no secret that shipping and transportation has long been branded as conservative and analogue. Shipping a container can involve 100 different documents!

Six years ago, A.P. Moller – Maersk embarked on a new journey where we divested our energy companies to focus on becoming the integrator of logistics. The process included rethinking our culture and starting new ways of doing business.

Since 2016, we’ve more than tripled our number of tech employees. Many of them have backgrounds in the start-up community or in some of the world’s largest, most successful tech companies. Back in the day, tech was a support function in Maersk, but today it’s an integrated part of daily business.

The pace of technology is reshaping the world. Every company needs to keep up. Just like our customers, we need to embrace change and digitisation to avoid falling behind. We’re well on our way, but we’ve only just begun the journey. As the world’s leading container and logistics company, we’re creating a global supply chain that operates efficiently at scale and can handle inherent disruptions that will always surface in unexpected ways.

Source: https://www.maersk.com/news/articles/2022/08/22/manual-control-halts-global-supply-chains


CREWEXPRESS STCW REST HOURS SOFTWARE - Paris and Tokyo MoU have announced that they will jointly launch a new Concentrated Inspection Campaign (CIC) on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) from 1st September 2022 to 30th November 2022

Andrea Mather’s plans for a long-awaited summer cruise around the Hawaiian islands with her financial analyst husband unraveled after her booking with Norwegian Cruise Line’s Pride of America was canceled due to a staffing shortage.

It was the second time this year that the 55-year-old homemaker’s plan to go on a cruise was scuppered.

The cruise industry is sailing in choppy waters yet again as it has to deal with a storm of labor problems, red-hot inflation and recessionary threat, after barely steadying itself from the blows of an 18-month shutdown due to the pandemic.

Wall Street analysts have already cut their 2022 revenue estimates for cruise operators by 5%, on average, since the beginning of the second quarter.

“(The labor shortage) couldn’t come at a worse time because the cruise industry is finally starting to see recovery from being the worst impacted industry by COVID,” said Jim Corridore, a travel and leisure analyst at data analytics firm Similarweb.

A typical cruise liner is like a mini city on high seas, where hundreds of people work in shifts to ensure its smooth sailing, while catering to its customers’ various demands and needs.

The industry employs about 250,000 workers onboard from over 100 countries and their jobs range from being a ship’s captain to a cocktail mixer, according to industry trade body Cruise Lines International Association (CLIA).

However, pandemic-related visa restrictions on travel in many countries and a general preference for flexible working hours have hit the industry’s ability to boost staffing to cater to a boom in travel and leisure activities.

That has forced Carnival Corp to make certain tweaks to the services it offers, such as reducing the operating hours of restaurants and implementing occupancy constraints on certain voyages.

Norwegian Cruise Line has canceled bookings on its U.S.-flagged Pride of America ship, while Royal Caribbean Group has also been a subject of complaints from passengers who have taken to online message board platform Reddit to flag the poor standard of service on its cruises.

“It is hard to describe overall service on cruises right now as exceptional just because they are so understaffed,” said Jessalynn Strauss, a university professor who has been on 17 Royal Caribbean cruises since the restart.

Royal Caribbean did not respond to a request for comment.

Inflation foils summer holidays
Tight labor market is not the only headache for cruise companies looking to cash in on pent-up demand from hungry travelers. Higher fuel prices and surging inflation are also threatening to derail any recovery.

The decades-high inflation is particularly hurting America’s retired elderly, who happen to be among the cruise industry’s main demographics.

M Science analyst Michael Erstad said cash-strapped consumers might turn to more affordable ways to unwind, including visiting theme parks and amusement parks.

Cruise operators, however, are still confident about the industry’s recovery in the longer term, although the strength of their summer sailing season, which typically accounts for a big chunk of their operating income, is still under a cloud.

The industry’s contribution to the global economy more than halved to $63.4 billion in 2020 due to the pandemic, according to CLIA, and if the current problems persist it will be hard for the sector to bounce back from those levels.

For now though, Mather is still hoping to cruise around the Hawaiian islands and has rebooked a trip for next year.

Source: https://www.marinelink.com/news/us-cruise-operators-recovery-runs-rough-498218

Italian shipbuilding group Fincantieri said it has secured a contract to build up to three “ultra-luxury” cruise ships for an unnamed international buyer.

The €1.2 billion deal is for one vessel to be delivered by the end of 2025, with options for two additional vessels, Fincantieri said.

Fincantieri did not share any specifics about the cruise ships’ size and technical details.

The cruise ship order is one of only a handful placed since the cruise industry was derailed by the COVID-19 pandemic, but marks a sign of confidence for the badly hit sector.

Fincantieri, which last week signed a memorandum of agreement (MOA) with MSC Group’s luxury travel brand Explora Journeys for the construction of two cruise ships, has been ramping up build activity after agreeing in 2020 to reschedule deliveries for many of its cruise customers.

Some of the business’ biggest names, including Royal Caribbean and Norwegian Cruise Line, are rumored to be contemplating new orders.

Source: https://www.marinelink.com/news/fincantieri-bags-ultraluxury-cruise-ship-498023

According to a document released by China’s Ministry of Transport, Ministry of Foreign Affairs, National Health Commission, General Administration of Customs and National Immigration Administration, before sailing for domestic market, the quarantine period for international trading vessel is to be reduced from 14 days to seven days from when the vessel arrived at the port of entry. All the crew members on board the vessel will need to have five Covid tests during the seven coming days upon arrival.

Once the vessel completed the process for adjusting oceangoing routes to domestic routes, the crew members’ health monitoring period will be shortened from 14 days to three days, and will be required to take a covid-test on the third day.

The policy adjustment could shorten the waiting time of the vessels transferring from international to domestic market reducing operation costs for the owners and provide a stronger support for transportation demands.

China is continuing to maintain a zero Covid policy, however, has relaxed some its most stringent quarantine measures for international arrivals.

raffic and revenue were up from the previous fiscal year for BC Ferries, but down from pre-COVID-19 pandemic levels, according to the British Columbia transportation agency, which released its year-end FY results Friday, June 24.

For the 2022 fiscal year ending March 31, 37% more passengers (17.9 million) and 26% more vehicles (8.5 million) rode BC Ferries than the year before. However, passenger traffic was down 20% and vehicle traffic down 5% compared to the pre-pandemic 2019 fiscal year.

Revenue was up 12% to $965.4 million, a $100.1 million increase, from the previous year due to higher traffic and net retail sales, which were helped in part by lower Safe Restart Funding, a federal effort to aid provinces and territories reignite their economies, BC Ferries data show.

However, BC Ferries saw a net loss of $68.2 million before recognizing Safe Restart Funding.

“As we emerge from the pandemic, we are grateful to our employees for their commitment to put safety first, operate in the public interest, and ensure reliable ferry travel,” BC Ferries’ President and CEO Mark Collins said. “We are excited to see people (traveling) with us again and are adding staff to meet the increase in demand for our service.”

Source: https://pacmar.com/covid-19-impacted-bc-ferries-year-end-results-says/

COVID-19 measures in China, a surge in consumer demand and the invasion of Ukraine have all been factors in ongoing unprecedented port congestion.

Congestion at the US ports of Los Angeles and Long Beach reached record levels in November 2021, with 116 container ships either in port or at anchor, while in March 2022, Los Angeles recorded its third-busiest month ever [10] as work continued to clear marine terminals of cargo and reduce the number of ships waiting at sea. At the same time, repeated outbreaks in China, resulting in the staggered lockdown of Shanghai in March/April 2022 for example, and Russia’s invasion of Ukraine is compounding ongoing supply/ demand pressures for shipping, which have resulted in port congestion, higher freight fees and longer transit times. Overall, port congestion globally is running above the levels seen last year, with specific container fleet congestion trending towards previous highs, Clarksons Research [11] noted in March 2022, while the impacts of the invasion are likely to create further inefficiencies across the maritime transport system.

Port congestion puts crews, port handlers and facilities under additional pressure, increasing risk at a critical stage of a ship’s journey, according to Captain Anastasios Leonburg, Senior Marine Risk Consultant at AGCS.

“Loading and unloading vessels is a particularly risky operation, where small mistakes can have big consequences,” says Leonburg. “Busy container ports have little space while the experienced labor required to handle the containers properly is in short supply. When you add in fast turnaround times and port congestion, this may result in a significantly heightened risk environment.”

Port risks are already increasing with larger ships, which concentrates large volumes of trade into the fewer larger ports that have specialist infrastructure. Accumulations of cargo exposures at mega ports have been rising, while commercial pressures increase the risks of mistakes and accidents. Ports are also increasingly reliant on technology, where an outage or cyber-attack could effectively close a port.

“Commercial pressures are already a contributing factor in many losses that resulted from poor decision-making,” says Captain Nitin Chopra, Senior Marine Risk Consultant at AGCS. “The pressure on vessels and crew is currently very high. The reality is that some may be tempted to ignore issues or take shortcuts, which could result in future losses.”

AGCS analysis shows that 75% of shipping incidents involve human error.

Ports and shipping face heightened cyber threat

As geopolitical risks rise, so does the prospect of malicious digital disruption.

The shipping industry continues to fall victim to cyber-attacks. In February 2022, a container terminal at Jawaharlal Nehru Port Trust, India’s busiest container port [12], was hit by a ransomware attack. It is just the latest to be affected, following ransomware incidents at US and South African ports in recent years. Earlier this year, a number of European oil terminals were also affected by a cyber-attack.

Cyber criminals have also targeted shipping and logistics companies. US-based freight forwarder Expeditors was hacked in February, 2022 [13], while Hellmann Worldwide Logistics [14] suffered a ransomware attack in December last year that disrupted operations for weeks. In recent years, some of the world’s largest shipping companies – Maersk, Mediterranean Shipping Company, COSCO and CMA CGM have all been targeted.

According to a recent industry survey [15] just under half (44%) of maritime professionals reported that their organization has been the subject of a cyber-attack in the last three years. Of these, 3% agreed to pay a ransom, which averaged at around $3mn. It also found 32% of organizations do not conduct regular cyber security training while 38% do not have a cyber-response plan.

“Cyber risk is a major concern and we do see more and more incidents involving non-marine operations, such as ports,” says Régis Broudin, Global Head of Marine Claims at AGCS. “As the industry becomes more reliant on technology and automation, the potential for disruption from a cyber-attack or technical failure increases. And with the increased connectivity of ships, it is only a matter of time before it will also affect vessels.”

Security agencies have warned of a heightened cyber risk due to the conflict in Ukraine. NATO warned vessels in the Black Sea faced the threat of GPS jamming, Automatic Identification System (AIS) spoofing (prior to the Ukraine invasion there had already been a number of these incidents, reported in the Middle East and China), communications jamming and electronic interference. The US Cybersecurity and Infrastructure Security Agency also warned the maritime transportation sector could be a target for foreign adversaries.

“There is concern that shipping assets and ports could become collateral damage if the conflict in Ukraine results in an increase in cyber activity,” says Captain Rahul Khanna, Global Head of Marine Risk Consulting, AGCS.

Email: lesiba.sethoga@allianz.com

BY Lesiba Sethoga

  • COVID-19’s impact is being felt at sea as well as on land.
  • The pandemic offers an opportunity to start building a sustainable ocean economy fit for the future.
  • Here are 8 areas for policy-makers to consider.

Almost no facet of our global economy has been immune to the COVID-19 crisis.

Much has been said about the disruption in more familiar sectors such as airlines, restaurants, and sports – but the long arm of COVID-19 has also reached out to sea, and is affecting our “blue economy”. This collection of formal and informal marine jobs, products, and services has been valued at $2.5 trillion a year. If the ocean were a nation, it would rank as the 7th largest economy in the world.

Maritime shipping has seen COVID-19-associated drops in activity of up to 30% in some regions. Lockdowns and reduced demand for seafood have seen fishing activity fall by as much as 80% in China and West AfricaEntire nations dependent on ocean and beach associated tourism have shut their borders. Globally, COVID-19’s impact on tourism may amount to a $7.4 billion loss and could put 75 million jobs at risk.

Some of the COVID-19 stimulus packages that are being designed to recover land-based industries and communities are also exploring ways to leapfrog forwards into greener modes of operation. However, little is being considered for bluer modes of operations. Similar opportunities, however, await us in our ocean and on our coasts.

Here are eight pathways for rebuilding an ocean economy that is both stronger and more sustainable after COVID-19.

1. Bluer blue tourism

Ocean tourism, before COVID-19, was directly valued at $390 billion globally and comprises a significant portion of the GDP of many nations. The millions of people that depend on ocean tourism, and consequently have a stake in ocean health, cannot be abandoned during the pandemic. Recovery funds could prevent furloughs by hiring people to restore coastal ecosystems, such as coral reefs and mangroves, given the massive return on investment that such ecosystems deliver to blue tourism. Similar nature-based job creation programmes were developed during the Great Depression, such as the Civilian Conservation Corps in the US. Stimulus funds could also keep workforces active installing sustainability upgrades in now empty hotels – drinking water stations to reduce plastic pollution and water treatment systems, for example – and training staff to diversify their sustainability skillset.

Millions depend on ocean tourism worldwide
Image: Isha@Seefromthesky on Unsplash

2. Reducing shipping emissions

Maritime shipping carries an estimated 90% of the planet’s cargo. This ocean traffic contributes significantly to global emissions of carbon and other air pollutants. The International Maritime Organization has mandated that shipping emissions be reduced by 50% by 2050. A reduction in shipping activity during COVID-19 provides a valuable opportunity to move towards this goal. Quiescent vessels can be fitted with upgrades to increase fuel efficiency and reduce emissions. Quieter shipyards can retool and secure political support to prepare for future demand to be met with zero-emission vessels. Such opportunities are greatest in Asia, where China, together with South Korea and Japan, represent more than 95% of the world’s shipbuilding by tonnage. Any aid directed to accelerate progress towards decarbonizing shipping should also include opportunities to electrify ports and prepare them to provide zero-emissions fuels.

COVID-19 has significantly impacted maritime shipping
COVID-19 has significantly impacted maritime shipping
Image: UNCTAD/ClipperData

3. Avoid squandering a post-COVID-19 fish bounty

Unlike other investments, living ocean resources literally grow during downturns. During World War II, many fishing vessels were forced to stop fishing. This reprieve allowed fish populations, such as cod, to increase. Should any such gains be accruing during COVID-19, we must resist the urge to immediately over-harvest them. Instead, we should use fisheries science to design intelligent harvest-yield protocols that maximize the long-term benefit of any possible COVID-19 gains.

Some fish stocks are likely benefiting from the global lockdown
Some fish stocks are likely benefiting from the global lockdown
Image: Francesco Ungaro on Unsplash

4. Supporting our mariners – delivery truck drivers of the sea

Ships are arguably the world’s most challenging work environment in which to confront a pandemic. Vulnerable mariners, such as those in the shipping and fishing industry, are vital to the functioning of society. They are the grocery clerks and delivery drivers of the blue economy. Ramping back up these sectors will require that crews be provided with viral and antibody testing and that they be extended dignified, safe transit home after being at sea for one month or more. Crews should also be given access to secure communication channels linking them to home. In the fishing industry, enhanced communications would confer the added benefit of combating slavery at sea.

It's time to recognise the contribution of mariners to the functioning of our society
It’s time to recognise the contribution of mariners to the functioning of our society
Image: Andy Li on Unsplash

5. Stay the course on ocean parks

Only 7.4% of our ocean is currently protected. These ocean parks benefit marine biodiversity and help boost breeding fish populations that spillover to enhance regional fisheries, create jobs in tourism, and potentially sequester more carbon. Some have suggested, however, that because of COVID-19 we must open up these ocean parks to industrial fishing. This would be folly. These parks are long-term ocean investments that take decades to mature, but only days to erase. In addition to short-changing future fishers, dissolving ocean parks would be a blow to sustainable blue tourism. Such actions would be akin to dismantling and selling off all the rides in Disneyland during COVID-19 – a short-sighted disservice to local jobs and economies.

The critically endangered hawksbill sea turtle, Hawaii
The critically endangered hawksbill sea turtle, Hawaii
Image: Don McLeish on Flickr

6. Farming the sea to feed billions

Scientists estimate that around 845 million people worldwide are nutritionally vulnerable to any decline in seafood. COVID-19 could exacerbate these challenges via disruptions to blue food trade and labour networks. We can avoid some of this trauma to food security systems by using stimulus funds to bolster smart aquaculture, or ocean farming which can provide nutritional support to vulnerable local populations, while minimizing environmental impact. Such investments could be patterned after environmentally and nutritionally aware investments in agriculture.

Done right, aquaculture can provide nutritional security to hundreds of millions
Done right, aquaculture can provide nutritional security to hundreds of millions
Image: Alex Antoniadis on Unsplash

7. Digitizing our ocean

Another way to fast-track the reopening of our blue economy is to direct stimulus investing towards marine technologies that can help us more efficiently and effectively observe and understand our ocean. For example, fisheries observer programmes that help the industry collect vital data to enhance catch, enforce laws and protect endangered species have been suspended because of COVID-19. New AI-powered electronic monitoring systems can play a role in maintaining these data pipelines. Myriad other opportunities exist – from expanding machine learning-powered interpretation of satellite data and enhanced drones that can curtail illegal fishing in regions where COVID-19 has reduced conventional marine patrols to connecting sustainable fishers to local consumers via apps when restaurants and markets are closed.

Advanced ocean technologies provide myriad benefits, including improved ocean surveillance
Advanced ocean technologies provide myriad benefits, including improved ocean surveillance
Image: NOAA

8. Don’t prey on the moment

We must be intolerant of efforts to misuse COVID-19 to advance agendas of self-interest. For example, much positive progress has been made transitioning us away from single-use plastics, a major source of ocean pollution. Since COVID-19, however, interest groups have successfully reversed or suspended these regulations for products like plastic bags. There are many things that we must do together to slow the spread of COVID-19 – but using single use plastic bags, instead of paper or reusable bags, is not one of them. Similarly, while external investment in hard-hit nations, like ocean-dependent small island states, can be positive, we must not allow the attachment of predatory terms that take advantage of these nations’ financial vulnerability.

Plastic pollution near Puglia, Italy
Plastic pollution near Puglia, Italy
Image: Paolo Margari on Flickr

COVID-19 has exposed just how profoundly linked our economies and wellbeing are to the ocean. These actions illustrate the need to inject more blue into COVID-19 discussions of ‘green recovery’. We cannot miss a chance in the times ahead to benefit both people and our ocean as we bring our sustainable blue economy back online.

Source: https://www.weforum.org/agenda/2020/05/how-to-build-a-bluer-ocean-economy-after-cobid-19/

The EU Ship Recycling Regulation (the “EU Regulation”) was adopted in 2013 and is in essence an early implementation in the EU of the Hong Kong Convention for the safe and environmentally sound recycling of ships (adopted in 2009); both of which aim to reduce the negative impacts on human health and the environment arising from the recycling of end of life ships. Under the EU Regulation, from 31 December 2020 all EU flagged and non-EU flagged vessels that call at a port or anchorage in an EU member state must have an Inventory of Hazardous Materials (“IHM”) on board.

There is anecdotal evidence to suggest that of the approximately 35,000 vessels that will be required to comply with the EU Regulation by 31 December 2020, almost a third have not yet begun the work required to prepare and have certified an IHM. In addition to the global COVID-19 restrictions preventing site visits and in-person inspections to carry out the work required to compile IHMs, the sheer volume of vessels that will require expert assistance in this area means the risk of vessels failing to comply with the EU Regulation by the end of this year is very real.

While steps are being taken to address these concerns, including remote IHM surveys, it remains to be seen whether this will be enough.
The EU Regulation

The EU Regulation has come into force gradually since its adoption seven years ago. Articles 4 and 5 of the EU Regulation deal with the control of hazardous substances and set out the requirement for an IHM generally. The general concept behind the IHM centres on the need to reduce harm to the environment and worker exposure to hazardous materials in shipbreaking yards; issues which have been well publicised recently.

While the requirement for an IHM for all new EU flagged vessels came into force on 31 December 2018, from 31 December 2020, the EU Regulation has far wider applicability and, specifically, the IHM requirement will apply to all other EU flagged vessels and any non-EU flagged vessels that call at a port or anchorage in an EU member state.

These obligations under Art. 4 and 5 are reinforced through additional requirements in the EU Regulation including:

• “Initial”, “Renewal”, and “Additional” Surveys to be undertaken throughout the vessel’s operational life in order to monitor compliance with the Regulation (including the IHM requirement);
• Member States being empowered to certify compliance with the EU Regulation; and
• A Final Survey to be undertaken prior to the vessel being taken out of service.

It is the responsibility and obligation of the shipowners to ensure that their vessels comply with the EU Regulation.
Practical considerations: what is required?

In broad terms, an IHM is a list setting out vessel-specific information as to the hazardous materials onboard (including their location and quantities). Under Art. 5(5) of the EU Regulation, an IHM shall consist of three parts:

• Materials contained in the vessel itself, or equipment (Part I);
• Operationally generated waste (Part II); and
• Stores onboard the vessel (Part III).

The International Maritime Organisation (“IMO”) Guidelines provide further, more specific detail in relation to what materials must be recorded in the IHM. The EU Regulation requires that Part I be prepared and certified for new vessels and those already in operation and shall be maintained during the vessel’s operational life. Parts II and III need only be prepared when the vessel is to be recycled, in accordance with the other requirements of the EU Regulation.

The IMO Guidelines provide further detail about the requirements for developing the IHM. The preparation of the IHM for new ships seems, on the face of it, more straightforward as it simply requires declarations from suppliers at an early design and construction stage (in relation to Part I) as to the hazardous material content of products used. However, experience of compliance with similar requirements in other established EU waste law, particularly ROHS (Restriction of the Use of Certain Hazardous Substances in Electronic and Electrical Equipment), suggests that establishing materials used in the production of many thousands of components is likely to be a significant endeavour.

This difficulty will be compounded for operational ships, where materials are already installed and will require visual and sampling checks by IHM service providers (and where the original supplier of some components may no longer exist). The inspection process depends largely on the size and type of the vessel, but it is generally estimated to take at least three months to prepare and certify an IHM.

Current estimates indicate that there are approximately 35,000 vessels which need to comply with the EU Regulation from 31 December 2020 and of that number, approximately a third have yet to begin the work required to demonstrate compliance.To complicate the picture further, current global restrictions arising out of the COVID-19 pandemic present real hurdles to shipowners looking to finalise their IHM for certification, ahead of the 31 December 2020 deadline.

In response to these mounting concerns, on 20 April 2020, the International Association of Classification Societies (“IACS”) issued a letter to the wider industry relating to the COVID-19 pandemic. Specifically, in response to the industry suggestion that IHM surveys be undertaken remotely subject to an extended survey during the first year, IACS responded “The initial desktop review may be performed remotely and followed up by onboard verification at a later date, subject to Flag Administration approval”.

Additionally, it was announced in May 2020 that US classification society ABS had expanded its offering to include an IHM remote survey. Through a web-based platform, users can submit a survey request together with all supporting information, including reports, photos and videos, which is then reviewed by an ABS surveyor in order for a “non-attendance verification” of the survey to be made.¹¹

We are aware that a number of trade and industry bodies have written to the EU Commission requesting an extension of the deadline for compliance to allow for the unprecedented delays caused by COVID-19. While it is quite possible that a delay may be granted there is of course no guarantee of this, and it would be unwise to rely upon it.

The delay caused by COVID-19 is unprecedented but it does only represent a six-month period in the seven years since the adoption of the EU Regulation; the direction of travel towards safer environmental and health and safety practices in the maritime sector and more robust regulation of the same has been clear for some time. It remains to be seen how the EU Commission will respond to requests to extend the current 31 December 2020 deadline and, in the interim, it would be prudent for shipowners to continue to move forward with plans to ensure compliance with the EU Regulation, including considering remote inspections as alternatives to in-person site visits and inspections.

There are obvious limitations in relying on a virtual inspection to meet the IHM compliance of a vessel, and these will no doubt be reflected in the assurance and warranties provided by the service providers. Additionally, it remains to be seen how those inspecting IHMs will treat significant discrepancies between a ‘virtual’ IHM and the vessel itself. However, in view of the fact that there is now less than six months to comply with the EU Regulation, it may be the best means available of demonstrating compliance in the short term.

Source: Watson Farley & Williams LLP.

By Scott Jenkins and Jeanne Amy, Jones Walker LLP
Scott Jenkins

With an uptick in coronavirus cases and the national emergency declared due to the spread of,COVID-19, the United States Coast Guard (USCG) has issued a number of Marine Safety Information Bulletins (MSIB) in response, instructing vessel owners, terminal operators, and other maritime facility operators to heed specific warnings and comply with all regulatory authorities during this pandemic.

All vessels calling on US ports are now required to report crew and passenger illnesses to the Captain of the Port (COTP) and the Centers for Disease Control (CDC), immediately, or 15 days prior to arriving in a US port.

The USCG has deemed the illness of a person onboard a vessel that may adversely affect the safety of the vessel or port facility a “hazardous condition” pursuant to 33 CFR 160.216. Additional guidance and reporting requirements can be found here: MSIB Number 02-20 (Change 3) issued on March 16, 2020.

Jeanne Amy

The USCG issued MSIB Number 06-20 on Vessel Reporting Requirements for Illness or Death, which sets forth the definition for an ill person onboard a vessel, including a fever of 100.4⁰ F or greater that has persisted for more than 48 hours. Masters who fail to report illnesses on board a vessel are subject to Coast Guard enforcement action, including civil penalties, vessel detentions, and criminal liability. In short, if a crewmember exhibits symptoms consistent with COVID-19 or other flu like illnesses, it must be reported to the COTP.

Commercial vessels that have been in the affected countries, including Iran, China, European states within the Schengen Area, and the United Kingdom and Ireland, within the last 14 days, with no sick crewmembers, will be permitted to enter the US and conduct normal operations, with restrictions. Crewmembers will be required to remain onboard the vessel except to conduct specific activities directly related to vessel cargo or provisioning operations. Crewmembers with a transit and/or crewmember visa may be permitted to disembark provided they are cleared by Customs and Border Protection (CBP), and, if applicable, CDC. All persons that have been in or through an affected country may be subject to CDC screening prior to disembarking in a US port.

All industry stakeholders should review and be familiar with Section 5310 – Procedures for Vessel Quarantine and Isolation, and section 5320 – Procedures for Security Segregation of Vessels in their Area Maritime Security Plan. The CDC has issued specific guidance for quarantine recommendations on ships.

Maritime facility operators are not permitted to impede a seafarer from embarkation/disembarkation.  That authority rests solely with CBP, Coast Guard, or the CDC. Facility operators should contact local CBP, Coast Guard, or the CDC to request specific restrictions on crewmembers’ access. The USCG issued specific guidance to port and facility operators in MSIB Number 07-20 to ensure the safety and security of workers, ports, and facilities.

The USCG clarified that certain maritime workers are considered Essential Critical Infrastructure Workers pursuant to the Cybersecurity and Infrastructure Security Agency (CISA) in MSIB Number 11-20. In a non-exhaustive list, the CISA/MSIB guidance deems the following to be essential personnel, and therefore provide a critical function to maintain public health and safety, and economic and national security during the pandemic: merchant mariners, pilots, longshoremen, representatives of seafarers’ labor organizations, marine consultants, naval architects, shipyard workers, Classification Society surveyors and auditors, vessel owners and operators, bridge operators, lock and dam operators, commercial barge fleeting personnel, crane operators, cargo operators, dredging operators, and federal and state agency personnel. Other related industries are also Essential Critical Infrastructure Workers, including transportation workers, petroleum workers, workers who support hazardous materials response and cleanup, critical manufacturing workers throughout the supply chain, and workers who provide medical services meeting shipboard medical needs.

MSIB Number 08-20, Change 1 provides guidance related to mariner credential endorsements and medical certificates. Specifically, the MSIB states that Regional Examination Centers and Monitoring Units will be closed until further notice. All Merchant Mariner Credentials and Medical Certificates that are set to expire between March 1, 2020, and July 31, 2020, are extended until October 31, 2020. Mariners should carry the expired credential with a copy of the MSIB.  Similarly, Standards of Training, Certification and Watchkeeping (STCW) Endorsements and STCW Medical Certificates that expire between March 1, 2020, and July 31, 2020, are extended until October 31, 2020. Mariners should continue to carry the expired credential with a copy of the MSIB. Additionally, all Additional Information letters, Qualified Assessor letters, Designated Examiner letters, Proctor approval letters, Approval to Test letters, and mariner training course completion certificates that expire in that same timeframe are extended until October 31, 2020. Pilot’s annual physical examination requirements will not be enforced during the national emergency. Finally, course and program approvals that expire between January 1, 2020, and July 31, 2020, are extended for six months from the date of expiration.

The USCG also issued guidance on vessel inspections, exams, and documentation in MSIB Number 09-20. Prior to boarding a vessel, inspectors and port state control officers will verify with the vessel that there are no ill crewmembers or passengers onboard. Certain allowances may

be made on a case-by-case basis for vessel inspections and exams. The aim of the USCG is to maintain the uninterrupted flow of commerce.

The USCG provided guidance on compliance with federal drug testing requirements during this national emergency in MSIB Number 10-20. For random testing, the USCG encourages operators to use their own office employees or mariners to administer drug tests to minimize contact among mariners and third party collectors. The USCG will give consideration to these efforts when evaluating whether to initiate an enforcement action against an employer if they fail to meet the requirement of 50% random test rate for covered employees in 2020.  If an employer falls short of the requirement, they should provide an explanation to the USCG. For pre-employment screenings, employers may request to waive drug tests for prospective employees if that applicant has been covered by a random drug test program for at least 60 days within the last year of the intended hiring date. All post-casualty testing for marine incidents and reasonable cause testing of employees remain in place.

Guidance from local and federal authorities is changing daily in response to COVID-19, so all operators should continue to check with state and federal authorities in their area and throughout this national emergency.

About the authors

R. Scott Jenkins is a partner in and leader of the Jones Walker Maritime Practice Group in the firm’s New Orleans office. He advises clients on a broad range of maritime transactions, compliance, and litigation.

Jeanne L. Amy is an associate in Jones Walker’s Maritime Practice Group in the firm’s New Orleans office. She focuses on maritime litigation, regulatory, and transactional matters.

***Note this article is for general information purposes and current as of the date of the publication.  This article is not a full analysis of the matters presented and may not be relied upon as legal advice.

Source: https://www.marinelog.com/covid-19-resources/maritime-regulatory-update-covid-19/

The IMO, based in London, is following the guidance from the World Health Organization (WHO) and the UK Government when it comes to planning and hosting the future meetings. At the time of writing, there is no schedule for future meetings.

Despite the postponements, IMO has, so far, retained the original deadlines for submitting papers. Normally, there are a lot of papers submitted to each meeting by the participants (member-states, NGOs etc), for example there were 102 submissions for MEPC 75.

Below you can find the most important of the postponed meetings – from the point of view of BIMCO members.

Key environmental topics postponed

The 75th session of the Marine Environment Protection Committee (MEPC75) was originally scheduled to take place at the end of March 2020. The MEPC deals with pertinent topics related to marine environment. The committee adopts new regulations and amends existing regulations.

Some important proposed amendments are up for adoption at this session:

  • MARPOL Annex VI concerning procedures for sampling and verification of the sulphur content of fuel oil and the Energy Efficiency Design Index (EEDI).
  • The BWM convention regarding commissioning testing of BWMS.

The other important topics, which will be discussed at this meeting, include the architecture of short-term GHG reduction measures, further development of a possible future phase 4 of the EEDI-regime, discussions about the industry proposal for a Research and Development programme for reduction of GHG emissions and how to reduce marine plastic litter from ships.

BIMCO does not expect the postponement to have any critical impact, although the new EEDI regulations and the procedures from sampling and verification of fuel sulphur content are important for shipowners.

Deadly serious business

The 102nd session of the Marine Safety Committee (MSC 102) was originally scheduled to take place in May. The MSC is a committee where topics related to safety and security of ships and seafarers are regulated.

Some important proposed amendments are up for adoption at this session:

  • International Maritime Dangerous Goods (IMDG) Code
  • Chapter II-1 of the International Convention for the Safety of Life at Sea (SOLAS), 1974, as amended,
  • The International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code),
  • The International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code).

Owing to the number of fire incidents on containerships, member states asked the IMO to include the item on the MSC agenda to allow a discussion on this issue with a view of strengthening fire safety regulations of large container ships.

Also, on the table is the topic of piracy and armed robbery and security of ships in West-Africa including the Gulf of Guinea, which BIMCO and other industry associations have highlighted in a submission to the committee.

MSC 102 will continue the work on how to enhance the safety of ships relating to the use of fuel oil. The intention is to enhance the mandatory SOLAS-requirements and develop guidelines for ships on how to address situations where indicative test results suggest that the oil fuel supplied may not comply with SOLAS. In this context, BIMCO continues to advocate for a mandatory bunker licensing scheme as the only way to address fuel oil quality and safety issues.

GHG is a priority

Intersessional Working Group on Reduction of GHG Emissions from Ships, originally scheduled from 23 to 27 March 2020 has been postponed but is prioritised due to the importance of advancing the development of short-term GHG measures.

The work on GHG emissions has a deadline for short term reduction measures in 2023. If the intersessional working group and MECP 75 are held in 2020, this part of IMO’s environmental work can be finalized within this deadline.

One year away from mandatory electronic exchange

Facilitation committee 44 (FAL 44), and the IMO Expert Group on Data Harmonization, which were originally scheduled to be held in April, are going to discuss the digitalisation aspect of data exchange and how to increase the efficiency of ship-shore communications.

From April 2019, with a two year’s implementation time, new mandatory requirements on electronic exchange of information from ships to the relevant onshore parties when approaching a port, will require public authorities to have systems in place to assist ship clearance processes. These matters were high on the agenda at the postponed meetings.

BIMCO has been pushing hard for a common and uniform implementation of the data models used in the interface for ship-shore communication.

If the postponement of the FAL drags for a long time, BIMCO is concerned that the foundation electronic exchange of information will be damaged to an extent where we may have to start from scratch.

Future IMO meetings

IMO committees and sub-committees work between the sessions by correspondence. For example, a lot of the groundwork in the development of regulations and guidelines takes place between the actual physical meetings through correspondence between the interested members. When arguments for or against certain items are known well in advance of a meeting through correspondence, it is normally easier for members states to reach consensus and therefore intersessional initiatives help speed up the process.

A revised meeting programme has not yet been issued by the IMO and it is impossible to predict when physical meetings will be allowed to take place again. The IMO is considering every possible option to handle the logistical challenge of accommodating all the postponed meetings.

A priority list has been drawn up and will be considered by the thirty-second extraordinary session of the IMO Council, which is meeting by correspondence from May-July 2020. We expect that priority will be given to a regular session of the IMO Council, followed by meetings of the MEPC preceded by the Intersessional Working Group on Reduction of GHG Emissions from Ships and followed by MSC and FAL.

By prioritising the work of the two committees MSC and MEPC, the IMO tries to ensure that items that are up for adoption can take effect without interrupting already made plans and schedules and contribute to the safety at sea and protection of the environment.

Big sub-committee meeting postponement

Sub-committees that have had their meetings postponed are likely to have their work postponed by up to a year. As papers have already been submitted, IMO will have to follow normal procedure that allows a discussion on submissions. There is a limit as to how many papers can be debated during a week-long meeting, so there will probably not be room for any new submissions. Under such circumstances, the 2020 Sub-committee meetings, which were postponed, will have to take place in 2021.

The BIMCO secretariat is prepared and will be ready when IMO finds new dates for the postponed meetings.



VAT:BG 202572176
Rakovski STR.145
Phone ( +359) 24929284
E-mail: sales(at)shipip.com