If ocean shipping is the “canary in the coal mine” for how the coronavirus will affect the global economy, then ocean shipping’s canary is the health of its crew.
If seafarers aboard commercial
oceangoing cargo ships start to become infected, there’s major trouble ahead
for the global transport network.
An outbreak among crew would cause vessels to be quarantined upon arrival or denied entry into scheduled unloading ports and would compel vessel operators to refuse to enter ports to load cargo if the risk is perceived to be too great.
Ocean shipping is a relatively
opaque industry, but a coronavirus outbreak among seafarers is likely to become
public knowledge fairly quickly if it happens. Crew are represented by the
International Transport Workers Federation (ITF) union, an organization that
defends crew aggressively, is in constant contact with crewmembers and is
highly open with the press.
Fabrizio Barcellona, assistant
secretary of the union’s seafarer section, was a speaker on a special webinar
on how the coronavirus affects shipping held on Friday by Capital Link, the New
York-based investor relations and advisory firm.
Over a dozen crewmembers on the
Diamond Princess have been infected while the cruise ship has been quarantined
in Japan. Asked by FreightWaves whether the ITF was aware of any infected crew
aboard non-cruise ships, Barcellona responded, “At the moment, we are not aware
of any seafarers on non-cruise ships being infected.
“But we are receiving daily [calls],” he continued. “Just last week, we received around 800 direct requests [for information] from seafarers who were concerned about their health because they had either been in China or in a country where the outbreak is higher than others.”
Regarding obligations of the
shipowner toward the crew, he said, “Crew have the right to protection and
medical care. We think there are arguments to be made that seafarers have the
right to not proceed with a ship into a port that has been declared at risk of
coronavirus. If the authorities prevent foreigners from coming in by air or by
road or train, we don’t see why a seafarer should be treated any differently.
“If a ship goes into port,
seafarers inevitably come into contact with shore people and may then contract
coronavirus,” he said.
Barcellona offered an example of a bulk carrier unloading Brazilian iron ore in China and then returning back to Brazil on the ballast leg of the round-trip voyage.
“On the long voyage back via the
Cape of Good Hope to Brazil, what of the seafarer who has contracted
coronavirus? We have just seen a situation of a cruise ship [the Westerdam] that was denied access to many ports until Cambodia finally let the ship come
“We think, of course, there is an
obligation on the part of the shipowner to immediately alert the authorities.
But if they do, some countries might deny access or the ship might be put in
quarantine, which could potentially cause the rest of the crew to be infected.”
In such a scenario, Barcellona
believes a legal case could be made for “negligence.”
Other participants on the Capital Link webinar highlighted the potential for contractual disputes if the coronavirus begins to infect crewmembers. There is potential for claims to be made by seafarers against the operator, against the owner by the charterer or vice versa (if the ship is delayed in quarantine, for example) and even by the owner against the crew if they refuse work orders. If such a legal minefield were to ever develop, it could cause participants to err on the side of caution, creating more hurdles for global trade.
So far, the primary trade concerns have focused on how the coronavirus reduces Chinese demand for petroleum and dry bulk commodities, how it impedes supply chains requiring Chinese components and how it stymies Chinese exports of containerized manufactured goods.
But if the seafarer labor pool were to become infected, the scope of the trade problem could broaden well beyond cargo flows to and from China. With the exception of some container and dry bulk routes, most oceangoing vessels do not simply go back and forth. Their itineraries are global. More FreightWaves/American Shipper articles by Greg Miller