Posted on: 24 March 2020
The knock-on effects on shipping of severe travel restrictions imposed by the global coronavirus pandemic was a common theme running through presentations at this week’s Maritime London live webinar on COVID-19. Moderated by the association’s Chief Executive Jos Standerwick the webinar was facilitated by Foundation member Hill Dickinson LLP.
Henry Curra, Head of Research at Braemar ACM, displayed a world map showing most countries had imposed some form of travel bans, describing the resulting “huge reduction in mobility” as “the biggest impact so far” of the virus on oil markets. Dry Bulk and Containers had lost ground as demand evaporated, and forward sentiment has deteriorated since the global lockdown kicked in, he said, while the Tanker spike that accompanied the sharp fall in oil prices following Saudi Arabia’s decision to lift production at the beginning of the month was now beginning wear off, he said, with Braemar expecting oil demand “to be down 7% globally in March/April”.
Beth Bradley, Partner at Hill Dickinson LLP, raised the issue of delays in the building of new ships, where she pointed out that under the standard SAJ form force majeure provisions permissible delays of around 210 days were available, if the builder was able to trigger the force majeure provision. Increasingly, the issue with new building and retrofits delays will switch from being a question of difficulties at the shipyard, for example, from a shortage of labour to difficulties in getting the right personnel out to the shipyards (Superintendents/Crew/Class) so that sea trials etc. can take place. Such issues give rise to contractual issues, which “are likely to become more complex and intractable as time goes on”.
Ella Hagell, Divisional Director at Britannia P&I, looked at some of the practical problems of getting personnel on and off ships during these “extreme restrictions on travel”. This could be third-parties like class inspectors and cargo surveyors, she said, but also seafarers who were joining or leaving ships for reasons of crew change, illness or worse. Crew “stuck in transit” was already a problem, she said, with restrictions in internal travel further delaying those requiring medical treatment or repatriation, causing “real distress”.
Over the next few weeks Maritime London will be running a series of webinars, in partnership with Members, focusing on the impact of COVID-19 and other topics.