Egypt, Suez Canal, and what next?

As published at MONEYLIFE.

http://www.moneylife.in/article/4/13522.html

How will the crisis in Egypt affect shipping?
January 29, 2011 11:31 AM | 
Veeresh Malik

Moneylife » Companies & Sectors » Sector Trends » How will the crisis in Egypt affect shipping?   How will the crisis in Egypt affect shipping? January 29, 2011 11:31 AM |  Veeresh Malik As both ends of the Suez Canal have come under curfew, how does the shipping industry cope? Egypt boils over, after Tunisia did a few weeks ago, and the Suez Canal Authority is offline. Curfew has shut down both ends of the Suez Canal and reports coming in from shippie friends suggest that there are delays in transit. About 9% of the world's trade by volume and slightly more by value moves through this vital artery-and an unknown amount shrouded in the mystery that is international oil trade, moves through the SUMED (Suez-Med pipeline) which trans-ships crude oil from Ain Sukhna on the Red Sea/Gulf of Suez end to Sidi Kerir near Alexandria-equally mysteriously converting "sanctioned" oil from Iran to legit oil at the other end, for example. As commodity, forex and oil traders, as well as other people who make money out of information, move rapidly in the West-while the weekend closes most markets East of Suez-we get a ringside seat, once again, on how fortunes will be made and lost in shipping. Your humble correspondent managed a ringside seat the last time around, when Onassis, amongst others, made their fortunes, and seems the next cycle may soon be on us. A successful shipping industry, as has been said before, is always ahead of the curve as far as the world's commercial outlook is concerned. The rest of the world may go through all sorts of geo-political changes, weather patterns may re-invent themselves, consumption and affluence as may go through seismic shifts impacting countries and continents-but ships have and will continue to keep the wheels of commerce turning. Face it; even wars cannot continue for long, without the shipping industry's support, no merchant ship will keep the wheels of battle turning.  Your correspondent has spent time detained in a West European port decades ago for being on a ship that was ostensibly carrying illegal arms which by a stroke of a dictat by pen on paper magically became legitimate cargo and then was delivered to the opposing regime it was originally intended for. The owners were just concerned about the freight and we were concerned about our salaries-and being detained while being allowed ashore was not all that bad, either. By definition, shipping has for centuries ensured its survival only if it has been able to read the tea-leaves correctly, ensuring that its ships and support elements that are in the correct place just slightly ahead of the correct time. And with the correct kind of ships. To understand this better, we have to first look at the typical returns that shipping as an industry gives-and then ask ourselves the question-why do people get into shipping if the real monetary returns are so low? Historically, from a variety of sources as well as part of Maritime Economics 101, return on capital employed in shipping for the past century has seldom been over 6.5% to 7% per annum, and usually lingers in the 2%-3% per annum region. Most certainly in days before the last 100 years, the commercial return was often negative, though the other long-term benefits like colonial dominance, religious evangelism and military might were more than compensatory. Things haven't really changed much in the present day and age. However, what has changed is that shipping also has to turn a minimum profit as well as be ready to pick up the surges, since financial backing from royalty, religions and regents, in uniforms, cassocks or robes cannot be declared as openly as it was a few centuries ago. So, through an intricate web of ownership modules, the real controlling forces behind shipping worldwide remains the same but will simply not be able to declare this. In addition, the primary reason of global dominance remains the main pillar for anybody wanting to get further in shipping. As well as aviation, for that matter, but there is a vital difference there. And the vital difference has to do with the age-old unchallenged concept of "innocent passage" guaranteed to commercial merchant ships worldwide, regardless of what they are up to-as long as the origin and destination ports are fine with things, and as long as global conventions on the subject in times of declared wars or similar are not in force. In other words, technically speaking, you cannot touch an enemy nation's ship even if all she is doing is running "innocent passage" through your territorial waters. Israeli ships will be and have been able to sail through the Red Sea and thence through the Suez Canal, and the Russians could use the Panama Canal, even at the worst of times-and that is how it has always been. But when natural events-or in some cases, "sponsored activities"-cause a breakdown in and around the choke-points, then all bets are off on "innocent passage" and Black Swans kick in. A choke point in shipping, incidentally, would be a narrow waterway that impacts international trade as ships funnel through them. Malacca Straits near Singapore, Suez Canal in Egypt, the Straits of Gibraltar between Europe and Africa, Straits of Hormuz at the entry to the Persian Gulf, and the Panama Canal-are vivid examples. It is no coincidence that the colonial powers and now the developed world have always tried to and have succeeded in controlling these "choke points". Except, lately, the Suez Canal. This now, for the second time in recent history, appears ready to re-write the way shipping fortunes are likely to fluctuate. Shipping fortunes are made-and lost-but mostly made, during periods known as "volatile" when risk, same meaning actually, is factored in. And over the last few months various indices and indexes that track shipping rates have been behaving very mysteriously, almost as if they were predicting in some ways that a choke point was due to boil over. Shipping circles, more than any other commercial interests, are watching and positioning assets very strategically-backed by national interests-and turbulent times lie ahead. Watch this space for more.

Sahil Puri's research on CRIMINALISATION OF SEAFARERS Part 1

“CRIMINALISATION       OF      SEAFARERS”

by

 Capt. Sahil Puri

 

 Introduction

“A nice clear night, good visibility, vessel somewhere in the South China Sea, nearest land 25 nautical miles off, isolated fishing traffic. Master comes up on the bridge around 2300 hrs , checks the chart(s) and the vessel’s position, calculates the track she would cover during the night and checks for any navigational hazards  and other factors so as to fully appraise himself of the situation and when fully satisfied puts down WRITTEN orders which include strict compliance with master’s & company’s standing orders, giving all vessels – especially fishing vessels, a wide berth and to be called in case of any doubt. Wishing duty officer a good watch, the master goes off to sleep …...”       

The above could most certainly be any normal day at sea in the life of a proficient, experienced and law abiding master belonging to any nationality, to any company, on any type of vessel flying the flag of any Maritime State.

“…10 hours later he is incarcerated for involuntary manslaughter. Even as the shock and disbelief of the charges against him baffle his senses, little does he know that for the next 18 months he would be living like a criminal in an alien nation with nothing but a question to haunt him as to what wrong did he do ! ”     

UNBELIEVABLE ! AS IT MAY SOUND, THIS IS THE BITTER TRUTH THAT EVERY SEAFARER FACES TODAY.

The master of MV Tosa¹ had one similar unfortunate experience. And there are many more ….

Criminalization of Seafarers is a very sensitive issue which has highlighted the vulnerability of the seafarers to unfair trials in foreign lands resulting in detention/ imprisonment without even being proven guilty. The trend unfortunately sees seafarers as easy scapegoats after an incident and they continue to be penalised for acts that have nothing to do with criminal negligence.

It is an established fact that shipping industry is facing a manning crisis. There have been several reports estimating the present as well as future shortfall of officers:

        2005 BIMCO/ISF estimate²: officer shortfall at 10,000 rising to 27,000 by 2015

·        2008 Drewry estimate³: officer shortfall at 34,000 against 498,000 total, rising to 83,900 by 2012 .

 

It is estimated that 90 percent⁴ of the world trade involves carriage of goods by sea.  

“Without international shipping, half the world would freeze and the other half would starve”

                                                 -  Efthimios Mitropoulos, IMO Secretary-General

It goes without saying that if this shortfall of seafarers persists or worsens, it could have serious repercussions.

“Without seafarers, our lives would be unrecognizable. Almost everything you touch was at some point transported by sea. From the alarm clock that wakes you up in the morning, your toothbrush, your TV, your radio, the car you drive, the clothes and shoes you wear, the food you eat, the coffee you drink, the chair you sit on, the toys your children play with. We are all touched by seafarers. And our lives are better because of the sacrifice they make, to bring us those everyday essentials and life’s little luxuries”.
                                                       - Stephen Cotton, ITF Maritime Coordinator

It is for the same reason that IMO In association with ILO, BIMCO, ICS/ISF, INTERCARGO, INTERTANKO, ITF started a ‘Go To Sea’ campaign^5a in November 2008 to attract entrants to the shipping industry. The IMO power point presentation^5b as a part of the campaign identified several recruitment and retention issues, based on Life at Sea Survey 2007/8-Seafarer attraction and retention survey report⁶ conducted by Shiptalk, which are believed to be contributing to this shortfall of seafarers.  

It is only when each of these issues is taken up and studied in detail with reference to the degree of its impact, the urgency to address the same and finding a workable and efficient solution, that this manning crisis can be averted.

‘Criminalization of Seafarers’ being identified as one of the issues, this research is aimed at addressing the same.

Statement of Problem

"How has the 'Criminalisation of Seafarers' impacted the perception of shipping (sailing) as a career? How can a solution path to this problem be identified? "

As discussed earlier, the shipping industry is facing a manning crisis and there are several factors contributing to the same¹³. The negative repercussions of this crisis in future cannot be overemphasised.

“The maritime industry is the engine of the global economy and seafarers are the fuel that keeps the engine running. It is impossible to overstate the contribution they make to economic stability and growth”.
                                             

                                                  -David Heindel, Secretary-Treasurer, SIU, USA

One of the most important factors for any industry to sustain itself and grow is the availability of efficient human resources. To ensure that manpower in adequate ‘Quality and Quantity’ is attracted towards the industry it is imperative that the associated careers are perceived positively i.e. they exhibit a positive image.

IMO has emphasised in its “Go to Sea” Campaign¹⁴ that there is an urgent need to improve the image of shipping.

In order to do so one must first analyse the impact that each of the issues has had in deteriorating its image and then aim at providing an efficient and workable solution.  

The aim of this research is to take up one such issue viz. ‘Criminalisation of Seafarers’ and analyse the extent of the impact that it has had on the way the shipping career is perceived by serving seafarers. This would provide an insight into the seriousness of this particular issue and the degree of urgency required to devise an effective solution.

The research also aims to suggest a solution path to deal with this problem, though the efficiency and workability of each of these solutions is a matter of another research.

eMail to a batchmate who agrees to have me on board as his 2nd Mate

Hey V___, hug the coast, and all the best, as a cadet/2nd mate in SST
and then Arya Lines, I still remember the bets on how close we could
go to the coast that J___, K____ and I would have - also racing through
fishing boats like cars on traffic. This was on Satya Kamal - and also
playing end-on chicken games, "aim for the other ship ltorpedo" games
(taught by M_______) as we learnt how the other ship sees us.

Once coming out of Aden we were headed to Kandla on 072 and on our
port beam was Akbar headed to Bombay on 077, converging and at same
speed (Old Man on Akbar was T____ F______ and 2nd Mate on Akbar was
E____ M______) we had G_____ E____ sleeping as Master and B_____ as
Mate also sleeping, so i called B_____ and asked him to give engine
speed to exactly matcjh Akbar and as they came closer I refused to give
way, finally our crew were talking to the Akbar Haj pax on deck like
50 metres apart, T____ came on the bridge and started howling at me, I
showed him the finger, finally they had to alter to port and go around
behind us.

One more time, R______ was cadet 20-24 and I was 2nd Mate 00-04
and when I came on the bridge I darkened the ship downstairs totally
and then switched off the navigation lights,and started aiming for
oncoming traffic, again torpedo movements Red Sea approaching Suez -
every ship going past would go nuts and call up on VHF. We would say
we were on secret mission and not supposed to show lights. Those days,
clear vis, radar was not used, remember?

I guess those were the days. can't do stuff like that anymore. Still
want me as your 2nd Mate?

The Russian Navy does the needful with Somalian Pirates

Here'sa video on youtube of the Russian Navy doing to the pirates what seafarers have always done when they catch the pirates. Send them down.

http://www.youtube.com/watch?v=TruV3sxS9Zw

Speaking Russian helps, but you get the drift, and don't miss what looks like obviously the Master and crew from the Merchant ship giving them the once over.

the New Year's message I sent out to my batchmates: REFLECTIONS

Sabko wish kar liyaa, what next, just a few random thoughts as we go into a New Year, decade, and on another cold day in Delhi - most of all, I am glad and thankful to be alive and mostly healthy.

If we look back at how life has evolved for us since 7th of June 1975 . . . what are the common threads, how do we ever rationalise them, can we?

# the alma mater we had has long been scrapped, but for many of us, those were the best days of our lives.

# many of the ships we've sailed on have changed name, gone on to Alang or similar, or gone through changes we don't even know about.

# the abiding memories I have of my short stint at sea are wondering about how small we are in infinity and how big we are in the same infinity too.

# looking at those sparklets of water rushing past us especially if we went for a walk pre-dawn to the focsle and saw them rush past, hypnotic.

# the lottery of life, some gone to that whaler in the sky, some adrift, some mainstream and some doing their own thing, up and down.

# spouse and more, children, parents, siblings, relationships, all those evolutionary elements which can not be quantified.

# money in the bank or not, savings or not, bust or boom, many of us have seen fiscal ups and downs which people ashore can not even begin to comtemplate.

# new countries, flags, loyalties, food preferences, coasts, mountains, cities, cillages - some have even found their own new Gods.

# hair on the head or lack thereof, aching bones or paunches, less teeth than before and more kilos, 4 stripes on the shoulders or none.

# the joy of children, validation being the day they did better than their parents, I remember the day I got my first appointment letter as a 2nd Mate with a basic salary that exceeded my wildest dreams then, and how happy that made my parents. I also learnt money is not everything the same day.

# And then, the finer things in life - single malts, cognacs, a good smoke, snazzy cars, holidays, books, music, theatre, families, (other women??), we all had our choices.

And a lot more.

Point I am trying to make is this - what was or is the constant?

I tell you my take on this - the constant as far as I can make out is that the TS Rajendra helped many of us learn how to roll with the punches, and take life as it came. As probably the guy with the longest tenure ashore on extended shore leave (since January 1983 . . .) that has been the most important element, constant, in my life.

In 2011, as we grow older better wiser and the whole nine yards - this is what I wish for all of us - that we roll with the punches better than everybody else and that we come out, lotteries aside, smiling.

With best wishes to all of you and especially to some of you who have been by our side over the last few decades while we've had out ups and downs . . .

+++

One of the many responses:- Malik very well said. Please keep up the musings. The time we were in Rajendra we could not wait to get out. ( DTGH) But it made boys into men. I credit our days from Rajendra for all I have achieved in life. Now we have Kitoo for keeping us smiling and Malik to keep us thinking. Thanks to all who wished and also the silent majority. Wish everyone Happy New Year and best wishes.

(APS Dhillon)

+++

Wow !!! KB Singh would have been proud of you.... Did you ever write for the "Indian Cadet". With your permission can I send this to them.??

A) Haircut or without, your style is inimitable.
(That, by the way is a compliment... I am feeling charitable this morning!!)

B) Indian Cadet was/is the annual TS Rajendra magazine.

(Rajesh Tandon)

+++

Halloa!!! Below there.

(Rajesh Saigal)

+++

Hi Veeresh, thanks for reminding the date june 7th. That is  the day we left TSR to go home.

(Bikash Chaudhary)

+++

Bhai-saab, problem is there's no time. I have thought at least a thousand times how much happier I was at sea, mainly because I had the one commodity we can never retrieve, time.

(Kaustub Kirpekar)

+++

Good day

Things have changed at sea! No more of that lovely commodity - TIME.  Maybe its just the company I work for. So I am going to look for a coastal Indian company now. Yeah! Or maybe BSM again.

(Anon)

+++
I thought Subra taught us English especially "forums of pawar", while Sharan was doing "we men of literature", and between the two of them a whole generation of us were influenced more by the Inglisi by Mungoo and BoBo while we got our "ek do teen char" VHF skillsets from HashPash, not to forget "if you are obedience I am politeness" Sharma ji and "dit-dit-dah-dit bloddee" from Randhawa while Mitra was good for I still dont know anything more than "V for Victor" balancing the "you tattee" vaala Kotwal. Never to ofcourse also reduce the importance of Soda Loda and Hathoda as well as quarter diamond Savanoon in Hindi for which I don't remember who got the best Hindi advance prize though I do recall MO and Chinta messing with my psyche more than anybody else in junior form.

Oh well, it is a wonder we can all think straight, leave alone speak inglisi.

(me)

+++

Capt. Sahil Puri's research on Criminalisation at Sea

Conclusion

“Wake up higher authorities .I am young and energetic and pretty much optimistic towards my sea service. Kindly take short notice action on criminalisation. Best regards.”

                                                                     - One of the respondents, a Pakistani cadet 

The above statement in my opinion symbolises the crux of the problem that this research was aiming to address. It has shades of despair which reflects the helplessness of the respondent, much the same feeling shared by majority of the seafarers that participated in the survey. Whether it was the insecurity of being treated like a criminal or lack of confidence in the international bodies and governments to deal with this issue, the results were disappointing for the morale of the workforce that is supposedly the engine of the global economy. The results clearly reflected that this problem is deep rooted and no matter what level of shipboard organisation, what department or what type of ship, the issue has had a negative impact.          

On the contrary the above statement also has shades of hope and optimism. Same was apparent in the majority of the respondents who actively came forward to put across their point of view and their suggestions on how to deal with this issue. The wide acceptance that the solutions mentioned in the questionnaire received, is in itself a sign of optimism that ‘Something can be done’.

The only question however that remains unanswered is “Will it be done??”  

(With permission from Capt. Sahil Puri.)   

+++

Here is the conclusion from Capt. Sahil Puri's most interesting research on criminalisation at sea. I shall be placing his work here, as it becomes available for publishing, on a regular basis. In this case, though, the conclusion was what was more important - so.