Monday, January 30, 2023
spot_img
HomeHeadlinesMore Supply Chain Chaos Expected; Omicron Forcing Transport Workers to Quit

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

More Supply Chain Chaos Expected; Omicron Forcing Transport Workers to Quit

From seafarers refusing to get back on ships to truck drivers whose concern over Covid-related border closures trumps the lure of higher pay, the transport industry is bracing for another roller coaster year of supply-chain disruptions.

As omicron infections surge and governments tighten restrictions, logistics companies around the world, from global giants to small businesses, can’t find enough staff. According to the International Road Transport Union, around one-fifth of all professional truck driving jobs are unfilled, despite many employers offering increased wages. Some pockets of shipping are also sounding the warning bell about future hiring prospects.

“2022 is shaping up to be another year of severe disruption, under supply and extreme cost for cargo owners,” said Simon Heaney, an analyst at maritime research consultancy Drewry. “The virus is once again showing it’s in charge,” he said, predicting another 12 months of stretched labor and healthcare-related red tape.

As the mutated omicron variant takes hold, workers who deliver goods on ships and trucks are shouldering the brunt of a supply chain infrastructure still mired in chaos. Faced with long weeks of quarantine combined with the precarious nature of crossing borders and fears of getting sick, some people are refusing contracts while others are looking for work elsewhere, companies say.

In Romania, many truck drivers don’t want to accept long-haul jobs into other parts of Europe, stung by last year’s 30 mile (48 kilometer) traffic jams and waits of up to 18 hours at EU borders. Countries where infections are surging are particularly problematic, according to Alex Constantinescu, CEO of Alex International Transport 94 SRL, which operates 130 trucks that deliver pharmaceutical and food products throughout the continent.

Already faced with a driver shortage before the pandemic, the trucking industry’s labor crisis has become more acute, he said. The company has had to raise wages by about 30% over the past three years.

Quarantine Concerns

“Long hours on the road, sleeping in the cab and now not knowing if the people you interact with have the virus — truck driving isn’t very attractive anymore,” said Constantinescu, who founded the company 27 years ago. “I look behind me and I can’t see any new generation of drivers. The pandemic has made this work very unattractive.”

In the U.K., the ranks of heavy goods vehicle drivers slumped by 23%, or around 72,000 people, in the second quarter compared to 2019, data from Logistics UK show. In China, it’s the fear of draconian quarantines due to the government’s Covid-zero strategy keeping drivers away. Just last week the entire western city of Xi’an, population 13 million, went into a snap lockdown after 127 cases.

“China has very strict policy measures to control flare ups and that’s making truck drivers unwilling to go to some areas where they might be quarantined,” said Salmon Aidan Lee, head of polyesters at energy consultancy Wood Mackenzie. “These harsh measures have further contributed to supply chain issues, and some polyester factories have had to shut.”

The shipping industry is facing similar labor challenges.

While the crew-change crisis that prevented seafarers from getting home and being replaced with fresh mariners has mostly eased — fewer than 5% of seafarers were onboard ships beyond the expiry of their contracts in mid-November, a drop from 9% in mid-July, according to The Neptune Declaration Crew Change Indicator — now companies can’t entice them back.

Pipeline Disruption

Western Shipping Pte Ltd., a Singapore-based tanker operator, said about 20% of its some 1,000 mariners don’t want to get back onto ships. Around 5% of Anglo-Eastern Univan Group’s 30,000 mariners had indicated as of last month they aren’t interested in a new contract.

Western Shipping is having to hire seafarers from other companies and offer them good bonuses to boot, according to Managing Director Belal Ahmed, who also chairs the International Maritime Employers’ Council.

Some of those delaying going back to sea are senior crew members, such as officers with experience and tenure, said Bjorn Hojgaard, chief executive officer of ship manager Anglo-Eastern Univan.

“Even before Covid it was hard to get the right person with the right experience and training on a ship,” said Hojgaard, who is also chairman of the Hong Kong Shipowners Association. “Today, we have to compromise. That worries me we’re not doing anything good for the safety of ships.”

The shortage may worsen as shipowners and charterers request only vaccinated crew be hired. And with omicron requiring more booster shots, the dearth is intensifying. Less than 30% of seafarers from India and the Philippines, among the top countries providing mariners, were fully inoculated as of mid-November, according to the Neptune Declaration indicator.

“We can’t dictate that seafarers take the vaccination but customers are stating they’ll only use fully vaccinated crew,” Columbia Shipmanagement Ltd. Chief Executive Officer Mark O’Neil said. “It’s been a challenge keeping these huge cargo ships moving.”

Wilhelmsen Ship Management, which manages a pool of around 10,000 mariners, is troubled by the trend of junior officers refusing contracts, even though it hasn’t affected the company’s overall crew-retention rate yet, CEO Carl Schou said. Still, the pipeline of future officers, who require years of training, could be disrupted.

“What happens then is you bring in people who aren’t qualified, you get them through a shorter training and promote them to roles that require more experience,” Ahmed said. “That could lead to more serious incidents and accidents on ships, groundings, even pollution. I‘m afraid we’re heading toward a disaster.”

Source: Bloomberg

Related Posts

Video

Finance & Economy
Shipping News
Ports

Oaktree looking at block sale of existing shares in Hafnia Limited

OCM Luxembourg Chemical Tankers S.à r.l. which is ultimately controlled by funds managed by Oaktree Capital Management L.P. (the "Seller") has retained Fearnley Securities,...

John Fredriksen Increases Stake in Euronav

Norwegian billionaire John Fredriksen has once again increased his stake in Belgian tanker company Euronav in wake of Frontline’s termination of its combination agreement...

First Citizens Bank Arranges $44.2 Million of Debt Financing for Navios Partners

First Citizens Bank announced that its Maritime Finance group, part of the CIT division, served as sole lead arranger on $44.2 million in debt...

Eagle Bulk Appoints Kate Blankenship to Board of Directors

Eagle Bulk Shipping Inc., one of the world’s largest owner-operators within the midsize drybulk vessel segment, announced that it has appointed A. Kate Blankenship...

Golar LNG: Unwind of majority of TTF hedges of 2023 and 2024 Dutch Title Transfer Facility exposure

Golar LNG Limited (“Golar”) announced that it has unwound the majority of its swap arrangements for its Dutch Title Transfer Facility (“TTF”) linked production...

Cyprus shipping making waves – report

Cyprus shipping, the steady driver of the economy, is sailing for better times, having...

Baltic index hits fresh multi-year lows on capesize dip

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index falls for seventh session on lower capesize demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits fresh 2-1/2-year low as larger vessel rates slip

The Baltic Exchange’s main sea freight index extended losses to a sixth straight session...

Baltic index down for fifth day on lower vessel rates

The Baltic Exchange’s main sea freight index fell for the fifth straight session on...

Port of Long Beach Closes 2022 with Second-Busiest Year

The Port of Long Beach marked its second-busiest year on record by moving 9.13 million twenty-foot equivalent units in 2022, allowing for a return...

Hapag-Lloyd AG acquires share in J M Baxi Ports & Logistics Limited

Hapag-Lloyd AG signed a binding agreement today under which it will acquire 35% of J M Baxi Ports & Logistics Limited (JMBPL) from a...

Nigeria opens ‘game changer’ billion-dollar deep seaport

Nigeria opened a billion-dollar Chinese-built deep seaport in Lagos on Monday, which is expected to ease congestion at the country’s ports and help it...

SC Ports handles nearly 3 million TEUs in record 2022

South Carolina Ports had a record 2022 with the most containers ever handled at the Port of Charleston. SC Ports moved nearly 2.8 million TEUs...

January oil loadings from Russia’s Baltic ports set to jump 50% vs Dec

Urals and KEBCO crude oil loadings from Russia’s Baltic ports of Primorsk and Ust-Luga in January are set to rise by 50% from December...