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Maritime Industry And The Impact of Covid-19

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Sea and sickness have a long history together. So much so that the word ‘quarantine’ was derived from the practice of isolating ships at anchor. The economic downturn brought in by the COVID-19 pandemic has been felt across sectors and businesses and expectedly the maritime sector has not been any different. The World Trade Organisation forecasted a 30 percent fall in the trade volume. However, in spite of the dark and gloom, there seems to be a silver lining for the industry because as it turns out from the numbers, it’s not all bad.

The Damage Control

Owing to the timely response and the measures undertaken, in backdrop of the regional lock-outs and restrictions in the movement of humans and material, smooth functioning of the maritime activities could be undertaken. There are concrete numbers which may be looked at to evidence the not so severe impact on the maritime industry. Drewry, a consultancy, had reckoned worldwide port visits by ships in the second quarter might decline by 16% whereas, in fact, they fell by only 8%. Ship Registries are at the forefront of the actions that aim to ease the negative impact of the Covid-19 pandemic however, both public and private sector stakeholders have reacted to the challenges posed by the pandemic in numerous ways wherein use of electronic-equipment and remote technologies is a common fabric that runs through the response methodologies. There are also a significant increase in the number of people appearing for the IMU CET exam.

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The Outcomes

The remedial actions were knowingly and unknowingly implemented on the onset of pandemic. While in the words of observers these actions have not only been effective in mitigating the effects on the industry but have also impacted the larger global challenges such as the environment.

It has always been understood that carbon emissions from the containers/ carriers have been one of the largest contributors to the global carbon footprint.

Since the beginning of 2020, the International Maritime Organization has put in force IMO 2020 regulation according to which the sulphur content of the fuel oil in vessels cannot exceed 0.5% and this was implemented and accepted by the pan industry where the players accepted the in-norm fuels for their fleet. Also owing to the inaccessibility of the shipyards, where alternatives could be retrofitted, key industrial players were left with few options but to adhere to the fuel norms which led to significant reductions in the Global Carbon Footprint. Most significantly to overcome inaccessibility of the shipyards, countries have stepped in to modernize their own by providing subsidies and grants which are bound to reap benefits in the future for the industry as a whole by reducing dependence on the established shipyards which, in most cases than not, were located in China.

One of the indispensable conditions for the smooth functioning of the maritime industry is the continuous flow of finance. This is predominated by the creation of ship-mortgages to ensure the asset backed security for the finances being made available. Realizing this challenge the registries have set up efficient processes to facilitate the securitization of the assets; the maritime companies no longer need to physically contact the Ship Registries to create ship mortgages or other property titles which was the case earlier, since they have the option to perform such tasks electronically. This electronic service is of great importance, especially for the banking sector in order to make available shipping credit as these processes are expected to remain for the ease of business even while the pandemic is a thing of yore.

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Persisting Challenges

In India, we saw the humanitarian crisis unfold from the comfort (or discomforts) of our homes where millions of daily-wage labourers, left with no money and options, were forced to travel on foot with their belongings of lifetime to their villages and hometown on the loss of their livelihood. A similar problem was also seen in the maritime industry where both the rank and file had to undergo difficulties for want of replacement fleets. These were mainly in the form of stranding of sea-farers, extended employment contracts, at times extending to one-year on board. Cancellation of leaves, long working hours in absence of adequate workforce were also some inevitable damage the maritime workforce had to suffer. On the light at the end-of the tunnel, these may only be temporary bottlenecks as and when the vaccination cover spreads among the fleet the restrictions in place are expected to mellow down

Another concern that is expected to hound the industry is training of the upcoming fleet, which has been trained through remote methodologies possibly for the first time since structured training and curricula were drawn up and a very different curriculum. While training for the fleets is a personal interaction-based learning however the institution had to quickly and decisively change their methodologies. While it remains to be seen the balance struck, the larger understanding is that in-person training is not entirely replaceable. However, it is expected that a great part of the current stream of online and distance learning will continue to dominate the scientific field of maritime education, given the wide use of internet connection, abundance of the necessary hardware and software solutions that are available and the ease of access that has come about with increased internet penetration.

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Conclusions

While Covid-19 has inevitably posed headwinds for the maritime industry, it can easily be inferred that the maritime industry is in the captain position driving the ship of global economy in the seas of nascent global economic recovery with wind in its sails. This is good

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