The worldwide supply of seafarers in 2010, estimated at 624,000 officers and 747,000 ratings, is close to being in balance with demand which is put at 637,000 officers and 747,000 ratings in a new report. BIMCO and the International Shipping Federation (ISF) published the results of their latest comprehensive study of the worldwide supply and demand for seafarers, presenting their conclusions, on 30 November, to governments attending the IMO Maritime Safety Committee in London.

The chairman of the project’s Steering Committee, Douglas Lang of Anglo Eastern, said:

“Our results suggest a situation of approximate balance between demand and supply for ratings, with a modest overall shortage of officers of about 2%. This does not, of course, mean that individual shipping companies are not experiencing serious recruitment problems, but simply that overall supply and demand are currently more or less in balance. This is perhaps not surprising given the sharp contraction in the demand for sea transport in 2009 combined with significant growth in total seafarer numbers.”

The BIMCO/ISF study highlights that shortages are more acute in specialised sectors such as tankers and offshore support vessels. With regard to certain nationalities, there is an underlying concern about the current and future availability of senior officers.

But while there is some evidence of continuing recruitment and retention problems, these are not as severe as envisaged by the last Update produced by BIMCO and ISF in 2005. Encouragingly, the data suggests a notable improvement in supply side numbers over the past five years, notably in China, India and the Philippines, but also in several OECD countries.

The 2010 Update also presents various global supply/demand balance scenarios for the next decade.

Mr Lang remarked: “There are many uncertainties, but our results indicate that the industry will most probably face a tightening labour market, with recurrent shortages for officers, particularly as shipping markets recover. Unless measures are taken to ensure a continued rapid growth in qualified seafarer numbers, especially for officers, and/or to reduce wastage from the industry, existing shortages are likely to intensify over the next decade. Supply appears likely to increase in many countries, but the positive trend that has been established for training and recruitment over the past few years must continue to be maintained to ensure a suitable future pool of qualified seafarers.”

The 2010 Update is based on data collected from questionnaires sent to governments, shipping companies and crewing experts. It also incorporates the views and perceptions of senior executives in shipping companies and maritime administrations, and detailed statistical analysis provided by the Warwick Institute for Employment Research.

Importantly, according to BIMCO/ISF, for the first time the study has been assisted by Dalian Maritime University which has helped obtain input from Asian countries where it had previously been difficult to obtain definitive data.

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Russian shipowner and businessman Yuri Nikitin has welcomed the decision of the High Court in London to clear him of most of the claims made against him by Russian shipping giant Sovcomflot and Novorossiysk Shipping Company (Novoship) with whom Sovcomflot has merged.

He issued a statement saying he was considering an appeal against a finding that his commission arrangements, in particular with the brokers Clarksons, Galbraith’s and Norstar were unlawful.

The decision comes after a trial spanning six months in which Sovcomflot and Novoship, represented by Ince & Co, sought to recover approximately $850m they claimed was owed to them as a result of the alleged dishonest actions of Mr Nikitin, represented by Lax & Co, and others.

Partner Stuart Shepherd, who led the Ince & Co team, said: "This was a lengthy and complex case involving multiple allegations of dishonest conduct. It required our team to undertake huge disclosure exercises in various countries. We are very pleased that our clients, who were defrauded of significant sums, have made a substantial recovery and that claims against Mr Nikitin have been upheld. This outcome justifies the decision to bring the proceedings to the London Commercial Court.”

He added however that “like our clients” his firm was disappointed that the central allegations concerning Mr Skarga were not accepted. All allegations against Mr Nikitin regarding the alleged bribery of, and fraud and conspiracy with, Dmitry Skarga, the former Director General of Sovcomflot, failed completely.

All allegations against Mr Nikitin regarding the alleged bribery of, and fraud and conspiracy with, Tagir Izmaylov, the former President of Novorossiysk Shipping Company, also failed completely.

Allegations that Mr Nikitin had paid bribes to Mr Skarga or Mr Izmaylov to secure allegedly favourable deals with Sovcomflot and/or Novoship, such as sale and leaseback deals, so-called below-market charters and newbuilding contracts, were all dismissed with the result that the majority of the financial claims against Mr Nikitin were also dismissed.

According to a statement issued on Mr Nitkin's behalf, after taking into account Clarkson’s and Galbraith’s own settlements with Sovcomflot/Novoship, some of the defendants had to pay around $32m out of the $850m claim. This comes to less than 5 per cent of the total claims.

Ince & Co said in a statement that the amount of compensation was yet to be determined but was anticipated that it would be in the region of USD 60 million, including interest.

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The Chamber of Shipping and seafarer's union Nautilus have both commented on the UK shipping minister Mike Penning's recent statement regarding government support for the Maritime Industry and Light Dues.

UK shipping minister Mike Penning

The Chamber's director general Mark Brownrigg said: “The Minister is dealing with a number of difficult issues in a proactive and consultative way, his approach is positive and welcome.” Mr Brownrigg welcomed the government’s decision to retain the bulk of SMarT funding in recognition of the need for continuing investment in seafarer training and skills, for the coming year. The government has ring-fenced £12m of SMarT funding for the next financial year, to help contribute to the training of up to 1,000 new cadets and ratings, and for ratings studying for officer qualifications.

Penning however announced that work will be carried out over the coming year to “consider the continuing requirement for government support for training and skills development in this sector”.

Mr Brownrigg also welcomed this government's firm commitment that there would be no increases in light dues over the next three years. Less welcome was the ending of the Crew Relief Costs Scheme. The Chamber regretted this move, noting it is the only permitted state aid that directly supports the employment of British seafarers, albeit in a particular set of circumstances.

“However,” Mr Brownrigg continued, “at a time when cutbacks are facing all sectors, the industry understands the need to focus on core areas, and safeguarding our future maritime skills base is of paramount importance.”

The chamber commented on the ending of funding for the Confidential Hazardous Incident Reporting Programme for shipping (CHIRP). He said that the Chamber recognised the contribution that this programme has made to improvements in health and safety at sea.

Nautilus general secretary Mark Dickinson said he was pleased the minister had maintained SMarT over the following year, but was disturbed that its future could be in doubt.

He added: “It’s only a few days since BIMCO and the ISF published new research showing the critical need to maintain recruitment and training to avert a major national and international seafaring skills crisis, and it is essential for the UK’s future as a maritime nation that we continue to safeguard our supply of officers and ratings.”

He added: “We are very concerned that this latest announcement forms part of a bigger picture, in which the entire network of maritime-related expenditure – including vital safety services such as emergency towing vessels and offshore fire-fighting -- is apparently under attack. The way in which the framework of support for the shipping infrastructure is being chipped away at raises major questions about the government’s commitment to the maritime sector. Spending on shipping adds up to a tiny fraction of the overall DfT budget, yet the industry has been one of the country’s biggest earners.”

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Specialist marine delay insurer The Strike Club says that shipping has this year been hit by a raft of strikes, particularly in Europe, which it describes as some of the worst for many years. A s a result the is implementing a general increase of 10% for the 2011 policy year for shoreside incidents and port congestion and 5% for delays resulting from onboard incidents. For the 2010 year, the general increase for both types of claim was 5%.

On a positive note, the managers state that the calendar year 2010 started very well, with the overall surplus of US$3.1m. for the financial year to January 31 last being the best in the club’s 53-year history, taking the combined free reserves to US$33.7m.

Bill Milligan, chief executive of SC Management, said that most P&I clubs had reported distinctly improved claims figures for this year. However the Strike Club had “unfortunately experienced a harsh claims environment."

Strikes in ports rising

He continued: “The reasons are certainly not hard to find – we are now inured to the word recession. The right to strike is an important one for workers in most of the civilised world, but increasingly this is impacting shipping operations as many European countries try to shore up or rebuild their ravaged finances by making draconian cuts in jobs, wages, pensions and welfare benefits.

“All this is fomenting labour unrest of dimensions not seen for perhaps 50 years,” Mr Milligan commented.

“General strikes, which are becoming more violent in nature, have already occurred, sometimes more than once, in Greece, Portugal, France and Ireland, and undoubtedly we will see more trades union and public sector protests. The club had an excellent renewal in February this year, with a retention rate of approximately 95%. The directors are determined that the club’s financial position remains robust and adequate to meet future obligations.”

The club noted that this year has seen a stevedores' strike that closed Finland’s ports for 20 days, affecting all shipowners trading to those ports.

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A row has erupted between the International Chamber of Shipping (ICS) and Virgin Atlantic Airlines’ boss Sir Richard Branson’s “Carbon War Room” over the use of IMO's new Energy Efficiency Design Index (EEDI). Sir Richard has published an online database of efficiency data for 60,000 individual merchant ships. His intention is to allow customers to compare the carbon footprint of the ships they are using. ICS has also responded to a claim by Sir Richard that shipping has not acted on carbon dioxide emissions.

ICS secretary general, Peter Hinchliffe countered: “The Energy Efficiency Design Index, developed by the International Maritime Organization, has been used completely out of context. While the EEDI is an important benchmarking tool to help ships reduce their carbon emissions, it was not created to compare individual ships of different types with each other. Ships have very different construction and safety requirements, depending on their type and trade, which can cause their energy consumption to vary greatly. Also, the IMO methodology has not been approved for use with all types of ship. It is therefore inappropriate for the Carbon War Room to use this methodology to derive scores for completely different classes of ships.”

ICS argues that, while the database may appear to show some shipping companies in a good light, it is not appropriate for the EEDI to be used as a tool by charterers to select more efficient ships, or for ports to use the data when setting their dues. The shipping industry organisation once again makes the point that shipping is already the most carbon efficient form of commercial transport, at least 30 times more so than cargo aviation, and the high cost of marine fuel – due to escalate further as it switches to low sulphur fuels – already means that shipowners have every incentive to reduce their fuel consumption even more.

“The global shipping industry fully supports the package of CO2 emission reduction measures that has been developed by its regulator – the IMO – which are expected to be adopted for worldwide application next July - provided the UN Climate Change Conference in Cancun gives IMO the mandate it requires to complete its important work,” says ICS.

Mr Hinchliffe added: “We have nothing at all against the aviation sector, and have just participated in a joint side event with them at the UN Climate Change Conference in Cancun. But for Sir Richard to claim that "the shipping industry was doing pretty well nothing” suggests that he has not been well briefed on the tremendous steps that shipping is taking to maintain its position as the most carbon efficient transport mode by far.”

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Damaged vessels at risk of sinking could soon benefit from a revolutionary new system being developed by a consortium led by BMT Group, the international design, engineering and risk management consultancy and Maritime London member.

Using technology originally developed for submarine rescue, the research team is developing a system which can be used in a wide range of maritime applications. These include salvage, emergency sub-division of roll-on/roll-off ferry car decks, self-righting buoyancy for fishing vessels in the event of capsize and emergency buoyancy to stabilise ships with holed compartments.

The new solution uses Kevlar reinforced balloons that can be rapidly inflated to provide extra buoyancy, expelling water and keeping the vessel afloat until repairs or other emergency measures are implemented. By preventing damaged ships from sinking, the technology could help minimise the risk of major loss of life at sea.

The team consisting of researchers from nine companies spread throughout Europe call the system SUSY (Surfacing System for Ship Recovery) and were inspired by submarine rescue technology from ASTRIUM and ideas proposed by the German firm, BALance Technology Consulting.

Rory Doyle, senior research scientist at BMT Group, said: “While we may not be ready to raise the Titanic, the SUSY project team is developing a system which will allow us to salvage or stabilise damaged vessels more efficiently than we do today.”

He continued: “The potential environmental, safety and financial benefits of SUSY are enormous, providing us with the first tools to assess and advise on the impact of using buoyancy systems to stabilise or resurface ships.”

The research team at BMT Group secured a 2.65 million Euro grant from the European Commission for the consortium to carry out the research.

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Marine insurance group Thomas Miller won the Insurance Day Corporate Social Responsibility Award for its decision to celebrate its 125th anniversary by becoming the lead sponsor of the Chauncy Maples Malawi Trust, a UK charity which is renovating the 19th century ship Chauncy Maples as a clinic to provide essential medical services to the lakeside people of Malawi.

Thomas Miller has already succeeded in raising more than half of the £2 million sum it set as its target just six months ago.

Speaking to guests at the awards evening, Mark Holford of Thomas Miller explained how the funds raised thus far were already being put to good use:

“Work has commenced in Malawi in stripping out the ship in preparation for major hull work and our next step is to persuade the world's maritime manufacturers to donate the £800,000 worth of parts necessary for the renovation work. Eighty-five per cent of the £1 million raised so far has come from Thomas Miller, which donated £250,000, and its business community. Sixteen donors have given at least £25,000 each to become Founders of the project, including five of Thomas Miller's transport clubs: UK P&I Club, UK Defence Club, TT Club, Hellenic War Risks and ITIC.”

Mr Holford continued: ”We were also delighted to see another Founder, Miller Insurance Services, pick up two awards at the Insurance Day evening, This leading broker is taking a ‘charity’ slip around Lloyd's and other London underwriters and this has produced £65,000 so far. In all the industry has produced more than £250,000 and we believe that there is more to come.”

Three UK law firms have also become Founders: Ince, Holman Fenwick Willan and Reed Smith, which considers Thomas Miller to be its oldest client. American law firms have also been significant donors, led by New York law firm Blank Rome.

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