Friday, March 11, 2022

Ukrainian Update - How Different Links in the Supply Chain are Affected and Responding

A Snapshot of the Current Situation from Different Eyes Both Corporate and Personal
Shipping News Feature

UKRAINE – The complexities of the supply chain are starkly revealed by the wealth of reactions from different players along its links. Here we take a glimpse at the latest developments.

The International Chamber of Shipping (ICS) can usually be relied upon to give a level headed assessment of the state of the market which affects its members, a sizeable 80% chunk of the global merchant fleet. Last year the ICS got together with BIMCO to publish the Seafarer Workforce Report, and it is to this it refers when assessing the current predicament.

The ICS warns that the war will impact the exchange of crews with 198,123 (10.5%) of seafarers being Russian and 76,442 (4%) Ukrainian, together then making up 14.5% of the global workforce at sea. Speaking ahead of an address to UN member states at an urgently convened meeting of the IMO, Guy Platten, Secretary General of the International Chamber of Shipping said:

“The conflict in Ukraine is having a significant impact upon the safety and security of seafarers and shipping in the area. As with Covid, seafarers are being exposed to issues not of their making. Multiple ships have been hit by munitions, seafarers have been killed and injured and seafarers of all nationalities are trapped on ships berthed in ports.

”It is of the utmost urgency that their evacuation from these areas of threat should be ensured by those States with the power to do so. The impact upon innocent seafarers and their families cannot be underestimated.

“ICS fully supports the establishment of a maritime corridor to allow the safe evacuation of ships that are currently unable to leave territorial waters in the Black Sea and the Sea of Azov. They must be allowed to depart the area of conflict and avoid further humanitarian incident.”

ICS has previously warned of a shortage of merchant sailors to crew commercial ships if action is not taken to boost numbers, raising risks for global supply chains. This has been compounded by draconian travel restrictions, brought on by the pandemic, that saw seafarers unable to crew change and resulted in hundreds of thousands overstaying contracted periods at sea.

Shipping is currently responsible for the movement of nearly 90% of global trade. Ukraine and Russia alone account for a quarter of all global wheat exports, while Russia controls 12.5% of crude petroleum exports, according to the Observatory of Economic Complexity (OEC). Already, Lloyd’s List estimates that exports of crude and oil products from Russia have fallen by 1.5 million barrels per day, from prior estimated levels of some 7 million before the Ukraine invasion.

The mixed nature of nationalities aboard the world’s merchant fleet is bound to exacerbate the problems, causing tensions aboard. Research carried out by ICS reported that the average ship has a mix of at least three nationalities on board, and sometimes as many as thirty. Three languages were the minimum spoken on the average ship.

In other maritime news Lloyd’s Register says it has been closely monitoring the very concerning situation in Ukraine over the past two weeks. Based on the latest legislative requirements taking effect in the United Kingdom, the European Union and United States, LR has confirmed that it will disengage from the provision of all services to Russian owned, controlled or managed assets or companies. It says it will communicate directly with all affected parties.

Using the data produced by VesselsValue, Vivek Srivastava, Senior Trade Analyst, has been studying the rise in global gas prices amidst the unfolding events between Russia and Ukraine with the intention of providing provides insight on the foreseeable future of the world's largest exporter of gas, highlighting the predicament between Europe's current sanctions and their dependence on Russian exports.

The European benchmark TTF gas price has risen 135% so far in 2022, with a near-vertical spike since Russia commenced hostilities in Eastern Ukraine on February 24th. Russia is the world’s largest exporter of gas, and Europe is heavily reliant on this, as Russia exports approximately 23 billion m3 of gas every day, about half of which goes to Germany, Italy, France and Belarus. Full report viewable HERE. Srivastava comments:

"The Ukraine crisis has sent global gas prices sky rocketing, but there may be bigger forces at work in the seaborne LNG market. While the world awaits developments on pipeline supplies, ship tracking data on seaborne LNG volumes may assuage the worst fears. Russia’s share of the seaborne LNG market is certainly large enough to move the needle on the global supply/demand balance.

“Of the top 20 export regions over the last 12 months, Russia accounted for two, (highlighted in red in our graph). The Eurasian Arctic contributed 4% of total volumes and the Russian Pacific another 2%. However, there are four much larger export regions, which each account for double-digit shares: the Middle East Gulf (20%), the Gulf of Mexico (14%), Southeast Asia (12%) and West Coast Australia (also 12%). Smaller changes in any of these four regions can outweigh larger changes in the two Russian regions..."

The world of marine charities has, as ever, responded quickly to an increasingly desperate situation. International maritime welfare charity Sailors' Society has created three bespoke Peer-to-Peer Support Groups for seafarers affected by the conflict in Ukraine. The unique WhatsApp groups aim to build on the proven success of the Society’s existing Peer-to-Peer Support Groups, which have trained moderators and are run as part of its Wellness at Sea programme. Sara Baade, Sailors’ Society’s CEO said:

“Sailors’ Society chaplains are supporting seafarers from all sides deeply affected by the ongoing war every day. Some 14.5% of the world's seafarers are Ukrainian or Russian. And up to one in five officers are Ukrainian, meaning many crews will find themselves serving under officers concerned about their homeland and families. The Support Groups will allow them to chat with others who find themselves in similar situations.”

The support groups enable Ukrainian and Russian seafarers to speak to other crews from their own country in their own language, while a third group will be made up of seafarers from other nationalities. To find out more and to join one of these groups click HERE.

Another maritime charity, Stella Maris, has released details of some personal incidents which highlight the current difficulties. Wojciech Holub, Stella Maris regional port chaplain in Tilbury and London Gateway, said several Ukrainian seafarers he has met are incredibly anxious about not being able to return back home or see their families. He commented:

“One Ukrainian ship master I spoke to at Tilbury port told me that his contract had ended, and a replacement captain had already joined the ship. However, he has had to remain on board because of the difficulties getting flights home. Another young seafarer was on a vessel heading for dry dock in Gdansk, Poland.

”He comes from Crimea and has Russian and Ukrainian nationality. He said he hoped to find safe accommodation in Gdansk as he feels he has no chance of getting home. His sister and other relatives have escaped to Turkey [whilst] through tears, another seafarer from Kyiv spoke of his grief and told me he was thinking of his home and family, and cannot wait to get home.”

It is not just the Ukrainian seafarers who are worried about getting home, said Wojciech, but also those from Russia and the surrounding countries such as Georgia and Armenia. He said both Ukrainian and Russian seafarers are shocked and horrified by what they are seeing and hearing about the war. On board vessels of mixed Russian and Ukrainian crew he had seen, they are united and have no animosity towards each other he said.

This sentiment is echoed by Deacon John Fogarty, Stella Maris regional chaplain for Kent and the Medway ports, who spoke to the Russian captain of a vessel with 13 Russian crew members, observing:

“The captain, whose mother was half Ukrainian was almost apologetic, as were the crew members, simply for being Russian. It struck me that there may be many more seafarers feeling the very same. Russian seafarers who are really struggling at this time as well as for their brothers and sisters in the Ukraine. It was very humbling, although saddening, to be taken into their confidence on how they are feeling.”

Deacon Doug Duncan, Stella Maris Northeast Scotland regional port chaplain met with three Ukrainian seafarers who had finished their contracts in the oil and gas sector. Their employer was looking at placing them on another vessel, the men told Doug.

“Three of them have decided to go home, while the three who are staying know that if they return home, they probably would not be able come back to the UK to work. They have advised their families to flee while they would carry on working and supporting their families in some way.”

Recognising the anguish of Ukrainian seafarers at this time, anxious for the safety of their family and friends at home, Stella Maris is making phone cards and data SIMs available to Ukrainian seafarers free of charge. Martin Foley, Stella Maris chief executive officer said:

“Stella Maris chaplains in the UK and around the world will redouble their efforts to support all seafarers affected by this war. It is desperately unfortunate that Ukrainian, Russian, and other seafarers are getting caught up in this war. Stella Maris urges all governments to ensure the safety of all seafarers caught up in this war, their entitlement to adequate shore leave and their access to our welfare services.”

Photo: Gas graph courtesy of VesselsValue.