Ship owners have cut their spending on safety
As the world’s shipping market slumped to its lowest point this year, ship owners have cut their spending on safety, resulting in a growing number of maritime accidents in recent months, maritime officials said.
The Maritime Safety Administration has launched a three-month campaign to improve safety by checking crew numbers and qualifications on all domestic cargo and passenger ships with 5,000 gross tonnage or less, beginning on April 16.
Huang He, deputy director of the administration, said the move followed an unusually high number of accidents involving ships in coastal waters or offshore since February.
Two of the accidents happened in a period of three days, between Feb 16 and 18, near Shantou, in Guangdong province, and Quanzhou, in Fujian province. Eight people were killed and five were reported missing.
“Our investigations found that both ships lacked even the minimum number of crew members, and some of the sailors had no qualifications for their current jobs,” he said.
The situation was not limited to a number of individual cases, he said, adding that it appeared to be widespread.
An administration official said that some small ship owners had fired sailors, and as a result, the ships did not have the minimum number of crew members. Others had replaced expensive senior sailors with cheap but unqualified ones.
Industry insiders believe that ship owners are cutting spending in order to survive the current difficulties, because the shipping market is worse now than it was in 2008, when the global financial crisis occurred.
Last year the shipping industry had a tough year. More than two-thirds of shipping companies in the world reported financial losses.
And things have been getting worse this year. This January, the Baltic Dry Index, a measure of shipping rates for bulk goods, such as coal, iron ore and grain, dropped to a level that was even lower than in 2008.
Ministry of Transport spokesman He Jianzhong said last week that the shipping market saw a brief recovery and sent the wrong signal in 2009. Shipbuilding orders grew and new shipping capacity was created in the market.
Meanwhile, fuel prices kept rising.
“Fuel costs have been on the rise by 20 percent for three consecutive years. Sailors’ salaries and management costs are also rising. Only the freight rate keeps dropping,” said Luo Rong, deputy general manager of Shanghai Zhenhua Shipping.
The shipping company, with a fleet of 22 ships, can survive, but it is under pressure.
“We carefully make plans and slow down the ships’ navigation speed, in order to reduce fuel consumption and control costs,” she said.
Analysts forecast that the rising fuel price might cause a number of small shipping companies to go bankrupt this year.
“The whole industry cannot see any sign of recovery. The industry is more desperate than it was in 2009. If this situation goes on for two more years, some shipping companies will surely go bankrupt,” said Li Cunyin, deputy secretary-general with the China Shipowners’ Association.
An industry insider said that the government should introduce favorable tax policies to help shipping companies get through the current market turbulence.
Source: China Daily
