Downturn may dilute hard-won safety gains

Salaries and overheads rising as markets collapse

Keith Wallis - Tuesday 13 January 2009

THE significant strides in vessel safety and seafarer training seen over the past few years could be lost as a result of the financial droughts caused by the downturn in the shipping markets, a leading shipmanager warned yesterday.

Anglo-Eastern group chief executive Peter Cremers said the threat to the continued drive to improve ship quality and training standards was his “major industry worry”.

Mr Cremers, who is also head of the Hong Kong Shipowners’ Association, said during the 15 years up to about 2005, when crew costs remained relatively constant, significant improvements were made in training and operating standards.

As a result, casualties and incidents were reduced and performance increased. But, he said, that in the past two or three years crew salaries had risen and operating costs had doubled, while in the past few months shipping markets had collapsed.

As a result, while there had been a huge increase in operating costs, including vessel maintenance and seafarer training, “now there was no money to pay for it any more”.

Mr Cremers said: “The only thing I keep asking myself is, will we have an industry that has the maturity to maintain standards despite having no money to pay for it?”

He added that whether “we will continue to drive [to improve standards] in the current market is my major industry worry”.

He said that while there was no sale and purchase activity, scrapping was taking place but not in large numbers and ships were being laid up.

But owners were laying up ships “hot” with full crews still onboard to allow the vessels to be reintroduced to service with the minimum of delay.

Consequently, despite the slump in the shipping markets the seafarer shortage “is still there” as newbuildings continued to be delivered.

With Anglo-Eastern managing a fleet of 270 vessels, possibly rising to 300 ships by the end of this year, the lack of experienced seafarers, including officers, was an ongoing concern not just for the company but for the industry as a whole.

He warned that the criminalisation of seafarers, such as the jailing of the master and chief officer of the tanker Hebei Spirit, would deter some of the best candidates from entering the maritime industry at a time of a seafarer shortage.

Mr Cremers welcomed the continued expansion of naval forces in the Gulf of Aden to fight piracy, especially the arrival last week of Chinese naval forces toprotect Chinese and Hong Kong-flagged vessels.

“I am extremely happy the Chinese government put warships in place,” he said. He said he had lobbied Chinese foreign ministry officials in Hong Kong for Beijing to send naval forces to the Gulf region.

Anglo-Eastern has five or six ships transiting the Gulf of Aden on a regular basis.

“To me it is very important that if there is a genuine problem in Hong Kong the Chinese government can take care of it,” Mr Cremers said.

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