Near the tipping point?

Malcolm Latarche
Malcolm Latarche

12 August 2016


This week it was announced that the VDR of the El Faro was recovered 10 months after the loss of the vessel with all hands off the Bahamas. Assuming any useful data from the VDR can be extracted, US investigators may be able to determine the events that led to the loss of the ship after sailing into the centre of Hurricane Joaquin. Another unrelated announcement came from the UK government saying law enforcement officers across the United Kingdom will now be empowered to join the fight against modern slavery at sea using new powers in the Modern Slavery Act 2015 which come into force this week. The new powers will enable enforcement officers to board and search vessels, seize evidence and arrest offenders, where it is suspected that modern slavery is taking place. While the two announcements appear unrelated it is possible that both have their roots in the profitability of shipping which is presently under severe pressure. After the El Faro’s loss, the owner was accused of neglecting safety on the 40 year old ship which was described by some former crew as a rustbucket. It was also implied (refuted by the owners) that the vessel was ordered to sail into the hurricane so as to maintain line schedules. Legal actions were brought against the owners by families of the 33 crew and five contractors. More than half have since settled out of court. Although some will raise eyebrows at the idea that modern slavery is rife in shipping, there are regular cases of vessels being abandoned by their owners and crew having not been paid for long periods. Many would argue that non-payment of wages over a prolonged period and threats of violence against crew if reported does indeed equate to slavery. The connection between safety lapses, poor maintenance, non-payment of bills and wages and profitability is obvious and although mistreating crew by unscrupulous owners is not limited to times of poor markets it worsens noticeably at such times. This week many leading shipowners have reported losses and it seems the whole of shipping with a very few exceptions is navigating a sea of red ink. If the cream of shipping is finding life a financial hell, then what is happening further down the league where annual accounts are not public and are not reported can only be imagined. And this is occurring at a time when two very expensive events are looming on the horizon. Very soon ships will have to find money to fit ballast treatment systems and buy more expensive low-sulphur fuel. After years of improving safety at sea, it is very possible that within a short time that trend may well go into reverse. It might shake out some of the lower grade operators although past experience suggests that they are more tenacious and survive downturns better than those at the top. Shipping needs to be on its guard.