During 2021, shipping industry saw many challenging events; from the pandemic implications on ship operations and the decarbonization push to the huge crisis incident of Evergiven, but managed to stay resilient through collaboration and synergy – this is when wonderful things can be achieved!
his time of the year is always a good chance to make an assessment of the running year and think of all the good moments and lessons learned. In the following article, we have stood out twenty one highlight events that shaped 2021, which was yet another challenging year but also a year of progress during which maritime stakeholders joined forces to tackle with the pandemic as well as the other key topics for the maritime industry that should not be left aside.
Industry is fighting at several fronts at the same time; pandemic, decarbonization, digitalization, sustainability to name but a few. Despite the difficulties, maritime industry keeps strong and ready to adapt to new trends such as ESG which is not only a trend but also a necessity and a key focus area for 2022.
Although they say that 2022 sounds like ‘2020 too’, we are overexcited for the new year and we are welcoming 2022 with a positive mindset and the hope that better days are coming for the whole world and our industry as well!
#1 Ever Given Accident disrupts the whole world in 6 days
The 20,000 TEU-class container ship Ever Given remained stuck in the Suez Canal for almost one week, after grounding on Tuesday 23rd of March, leaving more than 300 ships, including dozens of container ships and bulk carriers, unable to use the key trading route. After 6 days, on 26th of March, Evergreen Line confirmed that the containership had been successfully refloated within the Suez Canal at approximately 15:00 local time. In order for the Canal to resume normal operation, the vessel left the grounding site with assistance of tugboat. In total, 367 ships with hundreds of thousands of TEUs of cargo capacity were stuck since vessel grounding., resulting to severe economical impact and trade disruption.
#2 COP26 in the fight against climate crisis
The COP 26, the major UN Climate summit that took place from Oct 31 to Nov 12 2021, left mixed feelings for the effectiveness of future fight against climate change. On the one hand, the meeting achieved a global agreement to speed up action to reduce emissions. On the other hand, an apology by the COP 26 President at the end of the Summit signified the level of ambition reached was not sufficient. Despite typically not addressing directly shipping, the negotiations taking place in the UN Climate Summit have a profound impact on shipping operations as well, as the industry accounts for 2-3% of global CO2 emissions and is amid continuous discussions on the switch from fossil fuels to more alternative power sources. The sector’s official sideline event took place on 6 November, agreeing on the so-called Clydebank Declaration.
#3 DryBMS: Now dry bulk sector has its own quality standard
At the beginning of January 2021, RightShip and INTERCARGO launched DryBMS which is a new quality standard for the dry bulk sector. DryBMS is a voluntary standard that prioritizes improvement in standards in the dry bulk marine sector. This voluntary program is designed to allow ship managers to measure their Safety Management System (SMS) against agreed industry standards, with the aim of improving fleet performance and risk management. This will ensure an operator’s policies align with industry best practice to both advance their performance and attain high standards of health, safety, security and pollution prevention. Guidelines focus on 30 areas of management practice across four important risk areas in vessel operations; performance, people, plant and process. DryBMS will grade the excellence of a company’s SMS against measurable expectations and targets without involving the burdens of excessive inspections.
#4 Neptune Declaration shows the power of collaboration
At the peak of the crew change crisis in the autumn of 2020, IMO estimated that around 400.000 seafarers were on their ships beyond the expiry of their contract, while another 400.000 seafarers were unable to get to work. For this reason, over 300 companies and organizations signed the Neptune Declaration on Seafarer Wellbeing and Crew Change in early January 2021, that defines four main actions to facilitate crew changes:
1. Recognize seafarers as key workers and give them priority access to COVID-19 vaccines
2. Establish and implement gold standard health protocols based on existing best practice
3. Increase collaboration between ship operators and charterers to facilitate crew changes
4. Ensure air connectivity between key maritime hubs for seafarers
#5 IMO urges for designating seafarers as ‘key workers’
In early October, the IMO Maritime Safety Committee 104 drafted resolution consolidating issues related to crew change, which was approved at IMO Assembly (6-15 December 2021), urging Member States to designate seafarers as ʺkey workersʺ in order to facilitate shore leave and safe and unhindered movement across borders and prioritize their vaccination of seafarers, as far as practicable, in their national COVID-19 vaccination programmes, providing them with immediate access to medical care and facilitate medical evacuation of seafarers in need of urgent medical attention. Industry continuous its efforts in order to highlight to other sectors and governments the valuable work of our seafarers and their associated issues. Notably, the theme of this year’s World Maritime Day — “Seafarers: at the core of shipping’s future” — paid tribute to the professionalism and resilience of seafarers, sending a strong message that they have an indispensable role in securing vital global supply chains.
#6 X-Pearl fire: another major accident of the year
The X-Press Pearl reported smoke on May 20, coming out of the cargo when it was at Sri Lanka’s Colombo anchorage. Firefighting tugs kept operating throughout 26 May on-site with aid from two Indian Coastguard vessels and Sri Lankan Navy helicopters and vessels. In November, Sri Lanka started an operation to retrieve debris and freight containers resting on the ocean bed after the disaster. Namely, X-Press Feeders signed a contract with Shanghai Salvage Company (SCC)for the removal of the wreck, which is lying off the west coast of Sri Lanka. In December, the insurers of the X-Press Pearl ship agreed to pay another $2.5 million within the next few days as compensation for the environmental damage caused by the fire. The incident was deemed the worst marine ecological disaster in Sri Lankan history for the chemical products that spilled.
#7 Piracy & armed robbery incidents at lowest level in decades
IMB’s latest global piracy report recorded 97 incidents of piracy and armed robbery for the first nine months of 2021 – the lowest level of reported incidents since 1994. Reported incidents are down to their lowest level in decades, but violence against seafarers has continued with 51 crew kidnapped, eight taken hostage, five threatened, three injured, two assaulted and one killed, according to the latest IMB statistics. While the reduction of reported incidents is a welcome, IMB PRC warns that seafarers must remain vigilant as violence against crew remains high in many areas of the world. A substantial decrease was noted in the Gulf of Guinea region where 28 incidents of piracy and armed robbery were recorded in first nine month of 2021, in comparison to 46 for the same period in 2020. Crew kidnappings in the region have dropped as well with only one crew member kidnapped in Q3 2021, however there are worrying signs in Singapore Straits. What is more, 2021 concludes with a worrying incident in the Gulf of Guinea on 24 November involving the Danish frigate Esben Snare and a suspected pirate vessel in which suspected pirates opened fire directly at the Danish soldiers who responded in self-defence, killing four pirates.
Although this decrease and considering an alarming trend during 2020, in May 2021, several maritime companies, organizations and flag states, signed the Gulf of Guinea Declaration on Suppression of Piracy. The signatories firmly believe that piracy and attempts at kidnapping are preventable through ”active anti-piracy operations and that by the end of 2023 the number of attacks by pirates can be reduced by at least 80%.” BIMCO welcomed this positive step, encouraging also more parties to show interest in the Declaration.
#8 Cyber security into SMS: A new era begins
Starting from 1st of January 2021, SMS feature a new requirement, resulting to increased awareness over cyber security which is a critical issue as we have accelerated our path towards digitalization. According to Resolution MSC.428(98), operators need to ensure that their existing SMS appropriately address cyber risks. With MSC-FAL 1/ Circ 3, IMO provides guidelines which consist of six pages and provide detailed recommendations on maritime cyber risk identification and management to safeguard shipping from current and emerging cyber threats and vulnerabilities. The recommendations are designed to be incorporated into existing SMS manuals and procedures and associated ISPS systems so as to update and enhance these processes. ‘’The overall goal is to support safe and secure shipping, which is operationally resilient to cyber risks.’’, IMO explained.
#9 Abandoned seafarers on the increase
Forced labor, excessive working hours in violation of MLC, bullying and harassment, as well as abandonment constitute the ever-lasting challenges surrounding seafarers’ rights when onboard. A typical issue often discussed is seafarers being abandoned without pay or compensation by shipping companies when there is no longer a reason to being employed. In July 2021, the IMO’s Legal Committee 108 put the issue of abandonment of seafarers high on the agenda, discussing, among others, a proposal to establish a fund to support seafarers impacted by abandonment, following an alarming increase in the numbers of reports of abandoned seafarers. Furthermore, in early 2021, ITF launched an online ship abandonment resource database.
#10 ‘Fit for 55’: paving the way for full EU decarbonization by 2050
Announced in July 2021, the ‘Fit for 55’ package includes a series of proposals to revise EU legislation, in order to put it on track with the climate goals agreed by the EU Council and the European Parliament for 2030 and 2050 (climate neutrality). These proposals aim to put EU at the forefront of the global fight against climate change and significantly impact the maritime sector through the multi-discussed inclusion of the industry in Emissions Trading System (EU ETS) and by marking the transition to more sustainable fuels for ship propulsion. In particular, the Fit for 55 package includes more than ten legislative proposals and policy initiatives, four of which have an immediate relation with the maritime sector:
1. A revision of the EU emissions trading system (EU ETS) -including its extension to shipping
2. The FuelEU Maritime for a green European maritime space
3. The revision of the Energy Taxation Directive (ETD)
4. The alternative Fuels Infrastructure Regulation
#11 New Borders for High-Risk Area – Indian Ocean
Major shipping groups, including BIMCO, ICS, INTERCARGO, INTERTANKO, and OCIMF, announced a reduction of geographic boundaries of the ‘High Risk Area’ for piracy in the Indian Ocean, effective from 1 September 2021. The HRA was created at the height of the Somali piracy threat in 2010 to show shipowners, operators, and seafarers where pirates operated and where extra vigilance was required to avoid attacks. Nowadays, Somali piracy has been suppressed while West Africa’s Gulf of Guinea is considered as world’s most dangerous waters. The HRA was last amended in May 2019, and the industry groups, after consulting with companies and militaries, began a further review of the extent of the area in February 2021. Due to a continued downward trend in Somali piracy, the changes, agreed in August 2021, reduce the HRA boundaries to the Yemeni and Somali Territorial Seas and Exclusive Economic Zones in its eastern and southern reaches.
#12 New BIMCO clause on AIS switch off
During summer 2021, BIMCO published a new charter party clause to help tackle potential abuse by sanctions busters of the Automatic Identification System (AIS) which is mandatory for all ships to use under regulations for SOLAS. The initiative to develop the AIS switch off clause follows the publication of the OFAC Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors issued in May 2020. In particular, in May 2020, the US Office of Foreign Assets Control (OFAC) recommended that the shipping industry should develop contractual provisions “in the form of an AIS “switch off” clause. The intention was that the clause would allow shipowners, charterers and operators to terminate work with any party that demonstrates “a pattern of multiple instances of AIS manipulation that is inconsistent with SOLAS”. BIMCO expressed its concern that some charterers may, in their haste to be sanctions compliant, develop their own AIS “switch off” clauses that might expose owners to the risk of being terminated even when the AIS has been switched off for legitimate reasons, or the signal has failed to transmit or be received for reasons outside the owners’ control.
#13 IMO Maritime Day for Women
The IMO Council Meeting held between 8 and 12 November 2021, decided to establish an International Day for Women in Maritime, which will be celebrated on the 18th of May annually. With the adoption of this day, the goal is to promote the recruitment, retention and sustained employment of women in the maritime sector, raise the profile of women in maritime, strengthen IMO’s commitment to Sustainable Development Goal 5 (gender equality) and support work to address the current gender imbalance in maritime.
#14 MEPC Committees take decisive action on emissions
MEPC 76, held in June 2021, adopted a short-term annual ship CO2 intensity reduction target aimed at meeting the target set in the Initial GHG Strategy – to reduce carbon intensity of all ships by 40% by 2030, compared to 2008. These will be mandatory measures under MARPOL Annex VI in November 2022 by requiring all ships to calculate their Energy Efficiency Existing Ship Index (EEXI) and to establish their annual operational carbon intensity indicator (CII) and CII rating. MEPC 77 established a Correspondence Group on Carbon Intensity Reduction, to finalize and update guidelines. In turn, MEPC 77, held in November, brought the hot issue of GHG emissions from ships again to the forefront and agreed to revise the Initial IMO Strategy of 2018 in a bid to speed up decarbonization efforts; however, this revision will not be adopted earlier than 2023, which has been seen as a “missed opportunity” by global shipping stakeholders.
#15 ILO Resolution for a global vaccination programme
In April 2021, ILO adopted a resolution for a global seafarers vaccination program proposed by the Cyprus Shipping Deputy Ministry (SDM), calling for a mapping exercise to identify the number of vaccines required for seafarers ashore at seafarer supplying countries. Cyprus was one of the first countries worldwide that recognized seafarers as key workers and introduced all necessary measures to facilitate crew changes amid the COVID-19 pandemic. This has been a key step in identifying the magnitude of the vaccination challenge and then proceeding collectively with more decisive action, working with WHO and pharmaceutical companies to secure sufficient vaccines for seafarers.
#16 Mooring Management Requirement updates for Port Hedland
The Port Hedland Mooring Management Standard, effective from July 2021, sets out the revised mandatory mooring requirements, that apply to all vessels calling at the BHP Port Hedland Terminal and the crew on board, following a significant number of mooring line incidents reported in the Port of Port Hedland; approximately 20% of all marine incidents in the Port. According to RISK4SEA data, Port Hedland is a challenging port, with a Detention Rate significantly higher than the Global Average. For 2021, the following were reported in the port:
- Mostly middle aged (11-15 years old) Bulk Carriers were detained during 2021.
- The inspection rate vs ship called is 23%. However, for the most common ship type visiting Port Hedland – Capesize Bulk Carriers – the inspection rate drops to 20%.
- General Cargo Ships showed the highest Detention Rate (7.5%) with a rather medium inspection percentage (45%) in respect of ships calls.
- Smaller size Bulk Carriers (Handysize, Handymax, Supramax) have an inspection rate three(3) times higher than other Capes. 7 out of 10 ships of such types calling Port Hedland are subject to inspection.
- From the 764 Managers who managed ships calling at the Port, 264 Managers had ships that were inspected while 65% of managers managing more than 1600 ships in total, had no ships inspected.
- Deficiency Code 10116- Nautical Publications was the most common finding during inspections followed by 03108 – Ventilators, air pipes, Casing
#17 UN Due Diligence tool on human rights
In May, four UN bodies launched a Human Rights Due Diligence Tool for cargo owners and charterers, which contains a wide-ranging set of guidance to help enterprises protect the human rights of seafarers. The Human Rights Due Diligence Tool is a joint initiative of the UN Global Compact (UNGC), the Office of the High Commissioner for Human Rights (UN Human Rights), the International Labour Organization (ILO) and the International Maritime Organization (IMO), and aims to ensure that seafarers have their rights safeguarded in areas such as physical and mental health, access to family life and freedom of movement. On the occasion of the launch of this new human rights due diligence toolkit, ITF declared that now the world’s biggest brands have no excuse not to audit their supply chains and issue directives to suppliers on crew change. ITF’s Secretary General, Stephen Cotton highlighted that ”upholding human rights within supply chains is a social responsibility of companies, and was increasingly a legal requirement for them.” These health checks will now assist companies to understand their human rights due diligence (HRDD) obligations and address violations in their supply chains.
#18 NZ legislation to provide funding on seafarers’ welfare
Effective from 1st July 2021, the New Zealand government has updated its Maritime Transport Act 1994 to allow maritime levies to fund seafarer welfare services for the purposes of the MLC. The move reflects a historic day for seafarer’s welfare assurance following the effective lobbying undertaken by the New Zealand Seafarer’s Welfare Board with the supporting independent report into failures to financially support seafarers and their welfare services by HRAS issued in April 2020 with attached Counsel’s opinion. With this new legislation, approx. 130,000 seafarers per year (COVID aside) visiting one of the 10 ports in NZ will receive improved welfare services financially supported by the maritime levy.
#19 OCIMF guidance to integrate human factor into SMS
In September 2021, OCIMF released a new paper, entitled Human Factors Management and Self Assessment, providing a framework that integrates human factor into management systems. The paper aims to help companies and leadership teams address the conditions and systems that influence human actions and decisions, and thus promote safety and excellence across all operations. In essence, the paper comes to provide guidance on how to implement a more targeted approach of ISGOTT chapter 7 related to Human Factors. Although both frameworks appear to have several similarities, the key difference is that OCIMF’s paper has a more managerial approach, while ISCOTT Ch.7 has a more operational approach. In this new paper, several KPIs are introduced which have been developed under the same principles of TMSA3 – taking into consideration the four levels of TMSA and five human related categories – with the intension to be included in future editions of TMSA.
#20 Omicron variant challenges crew change
Although the number of seafarers stuck on board their ships is decreasing, the appearance of the Omicron variant globally in late November, prompted another series of travel bans and raised fears for new challenges as many governments close their borders to seafarers needing to leave and join ships. With regards to restrictions, starting from 29 November 2021, Israel has banned crew changes for all ships in all Israeli ports for two weeks. The Port of Singapore has temporarily suspended crew changes and crew vaccinations and restricted entry of ships from Africa. Furthermore, the impact of travel bans and the control measures on air crew can severely affect maritime industry. For instance, in Hong Kong, the world’s busiest air cargo hub prior to the COVID-19 pandemic, strict measures imposed in the city have created havoc with airline staffing. On the other hand, China is not making major changes amid the Omicron news, likely due to the fact that its travel restrictions are already extremely tight with few if any foreigners able to enter the country, CNN reported. Furthermore, India has given guidelines for ports to be under strict vigilance while the US has made several significant changes to rules affecting travel into the country.
#21 ESG emerges as a new trend
The recent trend in sustainability, thus the Environmental, Social and Governance (ESG) performance, is now impacting the decisions of all maritime stakeholders, along with the emerging contractual and regulatory requirements. ESG and the journey towards sustainability requires commitment and action that needs to go beyond regulation. COVD-19 has shed light on some systemic issues in shipping around seafarers and their labor and human rights; different stakeholders are increasingly demonstrating their interest in addressing these issues which are part of the social performance. In addition, the complex and continuously changing maritime environmental regulations, such as IMO GHG strategy, the 2020 sulphur cap, the EU MRV, Inventory of hazardous materials, and others, drive investor uncertainty and require a significant investment in capital expenditures for allowing the maritime industry to comply either in the short, medium or long-term.