SHIPPING SECTOR Archives - Page 31 of 31

here had been little doubt that the bill which will expand the powers of the Federal Maritime Commission over container lines would be passed, and it now moves on to be signed into law by President Joe Biden.

In a statement issued by the Whitehouse President Biden repeated previous comments about lines increasing rates by over 1,000% during the pandemic and carriers refusing to ship US exports back to Asia.

“Lowering prices for Americans is my top priority, and I applaud the Congress for passing the Ocean Shipping Reform Act on a bipartisan basis, which will help lower costs for American retailers, farmers and consumers,” the President said. He added that he looked forward to signing the bill into law.

High ocean freight rates are being blamed for inflation and international container lines with little political sway in Washington represent an easy target.

US National Retail Federation (NRF) Senior Vice President for Government Relations David French stated: “Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the Federal Maritime Commission the additional authority it needs.

“These improvements come at a time when inflation has reached a 40-year high. NRF has championed the effort to pass OSRA as one of the steps necessary to Lower Inflation Now and ease pressure on American businesses, workers and consumers.”

The US Apparel & Footwear Association (AAFA) said OSRA would strengthen the FMC and put in place commonsense reforms that will be instrumental in combatting the current shipping crisis and preventing the next shipping crisis.

Shipping lines that have battled supply chain disruption throughout the pandemic, but come up trumps in terms of record high freight rates.

The World Shipping Council (WSC) stated: “We are appalled by the continued mischaracterization of the industry by US government representatives, and concerned about the disconnect between hard data and inflammatory rhetoric. The 22 (not nine) international carriers that serve the American people, industry and government on the Asia – United States trade are part of the global supply chain that has built this country, importing and exporting food, medicine, electronics, chemicals, and everything else we depend on.”

It said that increased freight rates were due to demand outstripping supply and landside congestion, calling for a commitment to invest in landside logistics infrastructure.

“Until the import congestion is remedied, export congestion will persist. The World Shipping Council will continue to work with federal and state policymakers, as well as other parties, to pursue the necessary lasting solutions – such as continued investment in port infrastructure – that can have real impact in strengthening the intermodal transportation system that has supported the US economy through the pandemic,” WSC added.

After passing the House yesterday, S. 3580, the Ocean Shipping Reform Act of 2022 (OSRA), is on its way to President Biden, who is no fan of the giant container alliances and is looking forward to signing it.

“Lowering prices for Americans is my top priority, and I applaud the Congress for passing the Ocean Shipping Reform Act on a bipartisan basis, which will help lower costs for American retailers, farmers and consumers, “ the President said yesterday. “I want to thank Senator Klobuchar, Senator Thune, Rep. Garamendi, and Rep. Dusty Johnson for their leadership and helping drive forward this important legislation.

“In my State of the Union address, I called on Congress to address ocean carriers’ high prices and unfair practices because rising ocean shipping costs are a major contributing factor to increased costs for American families. During the pandemic, ocean carriers increased their prices by as much as 1,000%. And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead. That’s costing farmers and ranchers—and our economy—a lot of money.

“This bill will make progress reducing costs for families and ensuring fair treatment for American businesses—including farmers and ranchers. I look forward to signing it into law.”

So, what does the Ocean Shipping Reform Act actually do?

Specifically, the legislation aims to:

Expand safeguards to combat retaliation and deter unfair business practices;

Clarify prohibited carrier practices pertaining to detention and demurrage charges and vessel space accommodation;

Establish a shipping exchange registry through the FMC;

Expand penalty authority to include refund of charges;

Increase efficiency of the detention and demurrage complaint process.

Commenting on passage of the legislation, Federal Maritime Commission Chairman Daniel B. Maffei said that lawmakers had heard clearly the calls for help from American manufacturers, farmers, and companies that rely on access to international ocean cargo services.

“This bill provides needed and overdue updates to the laws the Federal Maritime Commission enforces,” said Chairman Maffei. “These changes will have a beneficial effect on how U.S. shippers are served and will bring more accountability to how ocean cargo services are provided. We will move promptly to implement the steps necessary to bring shippers the benefits of this legislation, beginning with the rulemaking addressing export shipments.”

“OSRA will provide the FMC with enhanced authority to ensure industry players have the right incentives and that all stakeholders in the ocean freight transportation system can have a voice,” he added. “We are grateful for all those who have contributed to making the Commission a more robust and capable entity.”

Sometimes fault is not always one-sided as a recent dispute involving a naval architect and a class society demonstrated. The claim was handled by ITIC (International Transport Intermediaries Club), provider of professional indemnity insurance to transport professionals across the globe, and originated from a shipyard.

The yard was commissioned to build a series of fast pilot vessels that had been designed by a naval architect. The designs were first submitted to the class society who advised that the forward stringers be strengthened (stringers are longitudinal beams inside the hull to provide longitudinal strength). It is usual for advice from class societies to be noted on the vessel plan in a speech bubble.

In this case, a different format was used and although all the advice from the class society was followed by the naval architect, the requirement to strengthen the stringers was missed. The class society reviewed and approved the revised plans but also missed the fact that the stringers had not been upgraded.

Ten vessels were built by the same shipyard and, after just three years’ service, nine vessels had suffered cracking.

The naval architect had specified that the vessel’s operations should be limited to a maximum significant wave height of 3.5m, however there were reports that some vessels had been out in seas of 5.5m.

The nine damaged vessels had their stringers strengthened by the original shipyard at a total cost of US$450,000. The yard claimed this sum from the naval architect.

Although it was clear that the naval architect had missed the advice given by the class society, it was also clear that the class society had missed the error when they reviewed the final plans; and the vessels had been allowed to operate in conditions outside of their specified limits.

As a result, the total amount paid by ITIC on behalf of the naval architect was reduced to $300,000.

ITIC urges all specialist consultants and agencies to thoroughly check advice given by third-parties and to remain vigilant for advice provided in non-standard or unexpected formats.

Without a rudder, food, water, electricity, lights, wi-fi, refrigeration, GPS, security or safety lights, 15 seafarers sit at anchor in Manila Bay, Philippines. Abandoned on board the Spanish-flagged MV Celanova (IMO 9268394).

With batteries running low on their mobile phones, the crew who are trapped 13 nautical miles out at sea have been making calls for urgent assistance as the vessel is running dangerously low on fuel and diesel oil and the food, fresh water and medicines that the seafarers need to survive.

In an earlier email one crew member wrote to the ITF asking when they could get fresh food on board. “We are eating something that three months ago we would have never thought we would have to eat,” she texted.

“Since February 21, when I was first informed of the case, there have been thousands of WhatsApp messages,” said Luz Baz, ITF Coordinator, Spain. “I’m in touch with them daily. But now the ship is in total blackout.”

Crew have been sleeping on deck as there is no air conditioning, but storms on Sunday night forced the seafarers to take shelter in the dark below deck, she said.

The 7600 gross tonnage MV Celanova is a Spanish flagged LPG tanker owned by GLOBALGAS SA, Madrid, Spain. The company has left the crew without pay for months and begging for vital provisions.

Alarmingly the LPG tanker was forced to discharge its dangerous cargo of Butadiene gas to another vessel on March 7, as the vessel was running out of the bunker fuel needed to keep the gas refrigerated.

On December 7, the tanker broke down and lost its rudder off the Philippines coast. Ten days later it was towed to anchor in Manila Bay.

Philippines Port State Control detained the vessel on 14 February after authorities found it to be in breach of the International Labour Organization (ILO) Maritime Labor Convention (MLC) over unpaid wages following notification by the ITF.

The ITF is urgently requesting Filipino authorities to allow the ship into port to facilitate assistance from the flag state and the vessels insurers, the American Club.

Local authorities have agreed but only on condition a tug is provided alongside the tanker and on standby while she is moored.

“I’ve worked over 14 years as an ITF inspector, I have dealt with many abandoned vessels so far and this is the first time someone has asked crew pay tug hire,” Baz said.

“The ship needs to be in port. The crew can’t start the engine. Something has to be done. The crew are desperate. They need fuel, fresh water, provisions, medication, safety parts,” she said.

Some of the Spanish and Caribbean crew have been on board since August, others since November.

Further exacerbating the seafarers’ plight, Spanish mortgage bank ABANCA is reportedly frustrating attempts to sell the vessel to help finance the owner’s debts.

Baz wrote to Maritime Authorities in Manila warning the ship and its crew were at enormous risk of potential anchor drift, fire on board or accident due to having no capacity to maneuver.

“The situation is seriously compromising the safety and health of a crew. They are exhausted after suffering months of enormous stress,” she wrote.

Despite the Philippines being a signatory to the MLC requiring governments to facilitate crew repatriation during abandonment, no action has been taken.

Their plight is further complicated by the COVID-19 pandemic.

The ILO abandonment report says communications have been maintained with the ship’s owner and instructions have been given to provide food and fuel.

A flag state surveyor was on board from February 27 to March 2 to check the real situation, the ILO reported. The Spanish Maritime Administration is focused on getting crew members repatriated working together with all stakeholders including the ITF.

The Spanish government has also contacted the Philippines government requesting the ship be docked in safe port according to ILO reports.

Ship’s master Rolando Garcia Alarcon warned the ILO the ship has serious technical deficiencies. He requested authorisation for the ship to berth, based on humanitarian and safety reasons citing the ship being without a rudder, fuel and lights. The master also reported the vessel’s chains and anchors were damaged. Garbage on deck also poses a health risk and the crew and ship especially in the case of fire, he said.

The ITF has written to the International Labour Organization requesting their intervention.

Reference: itfglobal.org

The Tokyo MOU has released its Annual Report on Port State Control in the Asia-Pacific Region noting that the number of detentions was up in 2019 after seven years of decline.

Detention percentage also increased in 2019 after 10 continuous years’ decrease. The number of under-performing ships published and number of individual ships involved also rose in 2019. “These increases are considered as the encouraging outcome of improvement and enhancement on targeting or selecting ships for inspections and, emphasis on inspection of under-performing ships by the member Authorities, based on the observation of continuous increase of inspections of high risk ships and under-performing ships,” states the report.

ISM related detainable deficiencies have remained in the top three detainable deficiency categories for several years. One third of all detentions are on the grounds of a major non-compliance with ISM.

The average number of detainable deficiencies per detention is trending slowly upwards. As a result the Tokyo MOU will refine measures to inspect under-performing ships. These inspections will focus on the safety management system implemented on board ships and familiarization and understanding of operational requirements by the crew. Operational requirements continue to be an area of concern due to the increasing complexity of shipboard systems and the pace of change, and the MOU is looking at mechanisms to address this.

The MOU’s concentrated inspection campaign (CIC) on Emergency Systems and Procedures was conducted from September 1 to November 30, with 7,174 CIC inspections. The most notable deficiencies found during the campaign were related to the muster list details in accordance with the requirements (178 deficiencies, 2.48 percent), emergency source of the electrical power supply to essential equipment (151 deficiencies, 2.10 percent), damage control plan readily available (137 deficiencies, 1.91 percent), steering gear system and its related emergency alarm operation (127 deficiencies, 1.77 percent) and capability of the public address system (112 deficiencies, 1.56 percent). Fifty-five ships were detained as a direct result of the CIC, which represents a percentage of 0.77 percent, lower than the overall detention percentage of 2.62 percent for the same period.

Membership of Tokyo MOU was further expanded in 2019 upon with the acceptance of Panama as the 21st full member of the MOU. With Panama, four of the top five world largest flags (Panama, Marshall Islands, Hong Kong and Singapore) are members of the Tokyo MOU.

The report is available here.

GDPR IN THE SHIPPING SECTOR – European Community Shipowners Association have published a document intended to provide guidance to the shipping sector on the application of the EU General Data Protection Regulation (“GDPR”).

This document was prepared in consultation with our members.

It is intended for general information purposes only and does not constitute legal advice. To receive legal advice, the reader should consult legal counsel. For definitions of the terms used in these guidelines, please see Appendix 2 to the guidelines.

Application of the GDPR

Does the GDPR apply when a ship has a non-EEA flag and non-EEA crew members?

The GDPR has a broad reach. It applies to organisations established in the EEA, when they process personal data in the context of the activities of these EEA establishments, regardless of whether the processing takes place in the EEA or not. The GDPR further applies to organisations outside the EEA who process personal data, if they offer goods and services to individuals in the EEA or monitor their behaviour. This particularly affects organisations with internet-based business models, offering goods or services to consumers in the EEA.

Examples

– The GDPR applies to a ship owner, ship operator or crewing agent who processes personal data and who is established in the EEA, regardless of the flag of the ship and the nationality of the crew.

– The GDPR applies to a cruise operator established outside the EEA, when it offers cruises to passengers residing in the EEA.

– The GDPR applies to an EEA establishment of a ship owner who processes personal data of non-EEA crew members that it receives from a non-EEA crewing agency.

– The GDPR applies to a non-EEA crewing agency that provides services to individuals in the EEA.

What type of data processing activities are covered by the GDPR?

The GDPR applies to:

(i) any type of operation that is performed on personal data by automated (i.e., computerized) means, and

(ii) non-automated processing of data that (are intended to) form part of a filing system (i.e., keeping hard copy documents in a structured manner so that they are searchable according to specific criteria such as name, ID number, phone number, etc.).

The following are examples of operations that may be performed on personal data and that are covered by the GDPR: collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction.

The GDPR applies to any information relating to an identified or identifiable individual, whether or not the information as obtained in a private or professional context.

Examples

– A filing cabinet containing HR records arranged in alphabetical order of employee names would be covered by the GDPR. An unstructured box of hard copy files would not be a relevant filing system and would fall outside the scope of the GDPR.

– Activities that are covered by the GDPR include for example storing employment details of crew members, recording crew members on a ship using audio and video equipment to ensure workplace security, managing contact details of a charter’s port agents, transferring (sensitive) personal data outside the EEA.

– Any information relating to individuals of any capacity associated with a shipping company falls within the scope of the GDPR.

Does the GDPR apply only to sensitive types of information?

No. The GDPR applies to any information that relates to an identified or identifiable individual (e.g., crew members, passengers, staff at customers/partners). This includes, for example, names, email addresses, phone numbers, online identifiers, location data, and information relating to an individual’s physical, physiological, genetic, mental, economic, cultural or social identity. In addition, the GDPR imposes specific requirements when sensitive data are processed (i.e., any personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic data, biometric data for the purpose of unique identifying a natural person, data concerning health or data concerning a natural person’s sex life or sexual orientation). Such sensitive data are referred to as “special categories of personal data” in the GDPR.

Examples

– Categories of data that are covered by the GDPR include e.g., contact details, bank information (including cash flows), medical certificates, passport information, video and audio recording.

– Information regarding a crew member’s health (like the aforementioned medical certificates) or trade union membership is considered sensitive data.

Who is the data controller? Who is the data processor?

An entity that decides on the ‘why’ and the ‘how’ of data processing is considered a “controller”. If a controller engages a third party (e.g., service provider) to process personal data on the controller’s behalf, that third party will qualify as a processor. There can be several controllers and processors that are involved in the same data processing activity.

Examples

– When a ship owner installs video cameras on a ship to ensure workplace safety, the ship owner will be considered a controller for the collection of video recordings.

– The ship owner and charterers are controllers for the disclosure of crew members’ personal data to port authorities, in order to fulfil their respective legal obligations vis-à-vis port authorities. In principle, a ship manager is a controller when it manages such data transmission to the authorities, unless its role is limited to acting solely on behalf and under the instructions of the ship owner or charterer (in which case the ship manager is a processor).

- When an external payroll agency processes salaries of crew members, the agency acts as a processor.

– When a ship owner uses a cloud-based customer relationship management program, the cloud service provider acts as a processor.

GDPR has many obligations. Does the shipping industry need to comply with all of them?

In principle: yes. The GDPR requirements apply to all organisations that process personal data, across all industries and sectors. However, some of the GDPR requirements apply only to high-risk data processing activities, which may not be relevant for all organisations in the shipping sector. Each organisation needs to assess which of the GDPR requirements apply to its specific activities.

Example

The GDPR requires that a data controller carries out a ‘data protection impacts assessment’ (‘DPIA’) when it engages in data processing activities that will likely result in a high risk to the rights and freedoms of individuals. This requirement may apply e.g., to an organisation that monitors on-board drug and alcohol use. However, it will not apply to an organisation that only carries out standard HR data processing activities, unless these activities involve large scale processing of sensitive data or criminal data (e.g., in the context of seafarers’ screening).

Does a non-EEA manning agent need to appoint a representative in the EEA? Does it need to be registered with a supervisory authority?

If a non-EEA manning agent provides services to crew members residing in the EEA, or monitors the behaviour of crew members in the EEA, it is subject to the GDPR and needs to appoint a representative in the EEA. The appointment must be in writing, but it does not need to be registered with a supervisory authority. This requirement also applies to manning agents that are established in “adequate” third countries (see section III on international data transfers below).

Example

A manning agent established in New Zealand must appoint a representative in one of the EEA countries where the crew members’ reside whose personal data are processed or whose behaviour are monitored.