The COVID-19 pandemic has created
an unprecedented crisis practically grinding the world’s economies to a halt
and which in turn impacted the backbone of the world trade, the maritime
industry. The impact on maritime business is wide-ranging. Lars Jensen, CEO of the
Copenhagen-based provider of container shipping analysis SeaIntelligence
Consulting estimated that 17 million TEU would eventually be taken out of
service globally this year, whilst ports and terminals may suffer a loss of 80
million TEU of handling volume. Ever since the COVID-19 pandemic hit China’s
supply crunch, it has resulted in a ripple effect in the global maritime
industry whereby the EU and the US were left with insufficient transport capacity
for exports out of China. Furthermore, companies wishing to export goods out of
China have been faced with a depletion of air freight capacity.
As a result, consumers have been
faced with changing their purchasing habits due to the fear of exposure to the
virus. Consequently, a great deal of consumers shifted to purchasing goods
locally as opposed to goods from other jurisdictions due to the logistics
network of imported goods. The risk for disruption in the supply chain is
therefore apparent which underscores the necessity to have smart and adaptive
supply chains that utilise modern technology to support the supply chain and
avoid any obstructions that may occur.
Disrupted supply chains may be
the first adverse impact that comes to mind. Yet the complexity and
multi-faceted maritime industry has been facing several more challenges on all
fronts, namely crew changes and cruise liners.
Seafarers
Seafarers are essential for the
movement of goods globally and are considered to be on the frontline of this
global calamity. Seafarers have been faced with situations whereby they are
required to stay onboard the vessel for longer periods than their original
scheduled shift, and sometimes travel to different ports in countries affected
by COVID-19, due to various countries imposing restrictions on change of crew
unless absolutely necessary. As a result, some authorities are authorising
extensions of seafarers service periods beyond the maximum 11 months’ time
period permitted under the Maritime Labour Convention, only where strictly
necessary to contain the spread of the virus. Disembarkation is not the only
problem in crew changes. Seafarers who are currently awaiting deployment are
concerned about possible delays in embarkation and postponement of income.
Similar to their overseas counterpart,
locally seafarers’ services as established in the Seafarer’s Employment
Agreement in terms of the Merchant Shipping (Maritime Labour Convention) Rules,
may be extended for a maximum period of three months due to issues in
repatriation. A seafarer who has a valid Certificate of Competency issued by a
foreign administration that also has a Flag State Endorsement issued in terms
of the Merchant Shipping Act and of the STCW Convention, may request to have
the validity of their Flag State Endorsement extended beyond their expiry date
should it expire during an extended period onboard.
Cruise liners
Cruise liner companies have been
hard hit as they have experienced difficulties when arriving at their scheduled
ports. Cruise ships have been stranded at sea, unable to dock at various ports
of the world as they were denied entry, travelling along the seas scrambling
for safe harbour. Since passengers and crew were
denied authorisation to disembark, they were forced to remain in quarantine
onboard the vessels finding difficulty in returning home. U.S. cruise liners
have already faced costs amounting to nearly $750 million since January as
numerous voyages primarily to Asia and the rest of the world have been cancelled.
The Cruise Lines International Association had originally suspended operations
from US ports for 30 days, however, major cruise liners proposed to restart their
operations after the summer season, while other cruise liners have extended
their cruising ban even further.
Worse still, a number of
passengers and crew tested positive to COVID-19. One of the worst outbreaks of
the virus onboard a cruise liner was that on the Diamond Princess, whereby the
ship was placed under quarantine as soon as a passenger who had disembarked
from the ship tested positive for the virus. The Diamond Princess was placed
under lockdown with passengers confined to their cabins for a minimum of 2
weeks. It was reported that a total of over 700 people were infected and resulted
in 13 fatalities.
In accordance with Port Notice 5
of 2020, Transport Malta has imposed a temporary indefinite ban on the entry of
cruise liners and passenger ships into Maltese ports and territorial waters. By
virtue of Legal Notice 92 of 2020, the Superintendent of Public Health extended
the existing travel ban on persons to and from Malta whether by air or by sea.
However, for obvious reasons this ban has not been imposed over cargo flights,
ferry flights, humanitarian flights, repatriation flights and cargo ships,
container ships and ro-ro vessels carrying goods and essential commodities and
tankers loaded with essential fuels.
Cruise liners may suffer a long
term hit following the end of the pandemic as it may undermine people’s
confidence in going on cruise liners in the future as travellers may remain
fearful of staying in a confined space. Cruise liner companies might therefore
have to implement extra measures to win back the confidence of passengers which
will require heavy investment at a time in which the industry is already
struggling and will prove to be one of the most testing challenges the cruise
liners will face.
The local scene: Transport Malta’s response to COVID-19
Transport Malta published a suggestive
list of preventive measures which could be adopted by ship operators with the
scope of minimising the spread of the novel coronavirus outbreak, such as
ensuring all crew are fully aware of how the virus may be spread. Furthermore,
ship agents, operators and masters of the ship are obliged, in terms of
International Health Regulations, to immediately report any symptoms of the
virus to the next port of call Port Health Medic doctor if there is a suspected
COVID-19 diagnosis to ensure the safety of all crew until the potential patient
is seen to by a medical professional. Transport Malta has advised that strict
hygiene on board vessels should be followed at all times. However, since the
crew of vessels live in close quarters to each other, stronger measures were
needed since social distancing is a harder task to achieve.
In accordance with Port Notice 6
of 2020, crew members are not allowed to disembark from the vessel throughout
the duration of its call in Maltese waters and ports. Additionally, shore
personnel are only permitted to board vessels if they are in possession of
written authorisation from the Port Health Medic. Furthermore, prior to entry
in a port, ships are required to provide the Port Health Office with
information regarding ports of call of affected countries.
Transport Malta adopted
preventive measures in the early stages of the pandemic reaching the Maltese
islands in order to minimise the impact of COVID-19 on the maritime industry
and in order to ensure an uninterrupted service is provided to the Maltese shipping
community under the current exceptional circumstance. With respect to
commercial vessel activities, Transport Malta has temporarily extended the
expiry of certifications, registrations and permits of commercial vessels,
small ships and moorings, including registration of small ships, nautical
licenses, certification of commercial vessels, certification of competency and
mooring permits provided that the boat owner is in possession of a valid
insurance policy. To further assist the shipping industry Transport Malta took
the economic measure of deferring the due payment of the respective
registration fees and annual tonnage tax by a period of three months from the
anniversary with respect to those whereby the anniversary falls on or after 1
April 2020.
In order to better assist the
teleworking measures adopted by local companies and to lessen physical contact,
Transport Malta have also facilitated its services by introducing online
services regarding yacht and boat registration under the Valletta Registry. The
online services range from renewal of certification of registry, provisional
and permanent registration, transfer of ownership, online payments, and other
ancillary services.
Although the
world has been facing a reality check through the COVID-19 instigated lockdown,
the world remains largely connected through world trade proving the
extraordinary strength and tenacity of the maritime industry in sustaining
global supply chains in these unprecedented times. Furthermore, this pandemic may also act as a
catalyst to spur further innovation in the maritime sector to undertake
thorough amendments to limit their carbon footprint.
