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As a new year begins, seafarers across the globe face a dire situation. While nations focus on limiting the spread of Covid-19—including closing ports—crews are left adrift. The situation affects up to 400,000 workers stranded aboard cargo ships and almost as many left ashore with no work.
Seafarer contracts usually last 11 months, but, for many, it’s been a year or more, putting a strain on these individuals’ health and well being.
And, it’s yet another factor impeding the flow of goods around the world. According to IMO, these seafarers are involved in moving more than 80% of trade by volume worldwide.
With the passing of weeks, individuals and organizations are amplifying a call for their relief. Now, a $2 trillion group of investors, led by Fidelity International, is urging ship charterers to re-route ships to facilitate crew changes and repatriation.
A Deadlocked Workforce
Key to the predicament: Seafarers aren’t always categorized as essential workers, so their movements face restrictions due to the Covid-19 pandemic.
In fact, as of mid-December 2020, only 45 of 174 IMO member states and one associate member out of three have designated seafarers as key workers.
Without essential worker designation, those onboard can’t disembark to go home. And, those awaiting engagements can’t take over for crews that are stuck on ships.
Meanwhile, the cost of repatriation has skyrocketed—in some cases, between double and six times more than pre-pandemic. That increase is due in part to Covid tests, multi-day hotel stays for transitioning crews, and greater airfare due to higher ticket prices and more circuitous routes.
Trade Lane Challenges
For those watching the rising spot rates of the FEWB trade lane ahead of Chinese New Year, the possibility of rerouting can add even more pressure to ship goods quickly. The same applies to the TAWB trade lane, where carriers are already announcing full vessels up to four weeks in advance.
Shippers can take steps to mitigate the risks of possible route changes and associated costs by creating flexible strategies now. Managing the process with a digital dashboard can help with last-minute changes that need to be communicated in real-time to other supply chain partners.
- Stay aware of developing shipping and supply chain news by checking Flexport’s blog regularly or subscribing to the Freight Market Update.
- Prioritize urgent shipments by booking premium services and remaining flexible in regard to available container sizes.
- Look for alternate maritime routes, based on port outlooks around the world. Due to the congestion in North America and Europe, planning may require help from an expert.
- Consider alternate transport modes. Airfreight is still at premium, but trucking or rail may be easier to book, depending on geography.
- Plan for longer lead times. This is smart advice for 2021 in general, but especially salient as re-routing could occur as Chinese New Year approaches.
For a closer look at ocean trends and strategies as the Covid pandemic continues, register for Logistics Rewired: Industry Update.