At Riviera Maritime Media’s webinar on dry bulk shipping, experts spoke about the impact the ongoing pandemic is having on business operations, reinvigorating the supply chain and setting new assessment standards in dry bulk shipping
Speaking on the dry bulk market’s move towards self-assessment of safety standards, Oldendorff director of business development and strategy Scott Bergeron noted two programmes developed by RightShip and Intercargo and said they have the potential to make the sector more resilient.
RightShip’s Dry Bulk Management Standards system will focus on 30 areas of company management practices divided into four sections -- performance, people, plant and processes -- ranking these on tiers of achievement from basic to excellent. RightShip is moving away from its SVIS risk rating system to a new scoring system which is set to be implemented in September.
Intercargo’s Dry Self-Assessment System considers 13 fields and 30 areas of management practices. Each field will comprise of specific questions and will be scored on a risk factor system. A company’s overall score is the sum of these scores; a lower score will indicate lower risk.
Both systems are yet to be finalised and remain open to feedback from stakeholders.
Madan Dry Management’s HSQE Manager Captain Panagiotis Nikiteas said he believes the self-assessment system has several benefits: namely, that the introduction of common systems would ensure fair play, improve benchmarking throughout the sector and reduce costs related to human errors.
Mr Panagiotis added that operators have some concerns over the costs they may incur and the transparency with which the system will operate.
"There is fear that self-assessment can be used as a commercial leverage, i.e. license to trade,” he said.
The majority of webinar attendees believe bulk carriers operate at lower safety and environment standards compared to other vessels. Responses were split on whether RighShip or Intercargo are better placed to govern a self-assessment scheme to govern best practices. You can find full poll results at the bottom of this article.
The dry bulk market suffered in Q1 2020 and MSI dry bulk analyst Will Tooth told webinar attendees that in light of the ongoing events, the outlook for the remainder of 2020 remains poor with bulker levels falling to their lowest levels since 2016. With regards to iron ore and coal, MSI estimates the sector will be slightly more resilient to disruptions caused by the coronavirus.
However Mr Tooth noted that iron ore production in Brazil, one of the two largest production centres, has been affected by industrial disasters, disruptions caused by heavy rains and the pandemic. In light of this, MSI has revised its projected growth in iron ore exports from 3.7% to 0.5% in 2020.
Protectionist measures taken by India and China – the planet’s two largest consumers of coal – have also led to slowed demand. MSI now projects a 5.7% fall in coal production in 2020 and expects aggregate demand across commodities to fall by 1.6%.
Pacific Basin Shipping director for fleet and head of ship management and newbuildings Jay K Pillai addressed issues facing seafarers and sustainability in the dry bulk sector.
Travel restrictions caused by the pandemic have resulted in thousands of seafarers stranded on ships beyond their contractual dates. Mr Pillai said 30% of seafarers have exceeded their contractual agreement without relief. “They are depressed, stressed, and they want to go home,” he said.
In May, Intercargo said the maritime supply chain is at a risk of breaking down without crew changes. Noting that not all governments are forthcoming with easing restrictions despite the maritime sector and IMO’s push to have seafarers designated as key workers to gain relief exemptions. Mr Pillai said governments are encouraged to act before seafarers are compelled to go on strike.
On the question of challenges to sustainability, he said rising costs caused by IMO 2020 and the collapse of the bulker market in Q1 2020 coupled with rising labour costs has led to increased operating expenses. Pacific Basin believes owners and operators should refrain from ordering newbuildings which they believe are not a long-term prospect to meet IMO’s 2030 and 2050 targets. He said “By doing so we can close the supply and demand gap and improve the return on investment”.
Ultimately Mr Pillai said operators need to nudge suppliers to develop energy-efficient vessels and zero-carbon technologies that have the potential to help achieve the long-term emissions goals.
You can view the webinar, in full, in our webinar library.
Panellists (from left to right):
Jay K Pillai, Director, Fleet (Head of Ship Management & New Buildings) Pacific Basin Shipping / Vice Chairman of INTERCARGO
Capt Panagiotis Nikiteas, HSQE Manager, DPA/CSO, Maran Dry Management Inc
Scott Bergeron, Director of Business Development & Strategy, Oldendorff Carriers
Will Tooth, Dry Bulk Analyst, MSI
1.) Generally speaking, bulk carriers operate at ___________ level of safety and environmental standards compared to tankers.
1.89% Higher 18.87% The same 54.72% Slightly lower 24.53% Significantly lower
2. _____________ is better placed to govern a self-assessment scheme intended to ensure best practices and continuous improvement
33.33% Intercargo 49.12% RightShip 17.54% Other
3. Has RightShip contributed to the improvement of bulk carrier standards?
84% Yes 16% No
4. ITF calls for crew on extended SEA to stop work after arrival first port after 16.06 will disrupt dry bulk shipping
29.03% 1 Strongly Agree 41.94% 2 12.9% 3 9.68% 4 6.45% 5 Strongly Disagree
5. We don’t need more standards beyond ISM/ISO 9001/ISO 14001/ ISO 45001 (replacing OHSAS 18001)
70.59% Agree 29.41% Disagree
6. How well prepared you are for a Self-Assessment scheme (either Dry SAS or DBMS)
12.9% 1 - Well prepared 12.9% 2 45.16% 3 12.9% 4 16.13% 5 - Not well prepared