Business News
UAE Maritime industry: Steering through the coronavirus crisis with resilience
Jul
The maritime industry has been hit hard by the coronavirus crisis. A plunge in trade and output, a change in freight rates owing to demand shock for containerised goods, and restrictions imposed by governments around the world on repatriation and crew changes are just some of the ways that the pandemic is adding even more pressure to a sector already challenged by widespread geopolitical tensions, environmental concerns and trade restrictions.
The maritime industry has been hit hard by the coronavirus crisis. A plunge in trade and output, a change in freight rates owing to demand shock for containerised goods, and restrictions imposed by governments around the world on repatriation and crew changes are just some of the ways that the pandemic is adding even more pressure to a sector already challenged by widespread geopolitical tensions, environmental concerns and trade restrictions.
Global trade, as the World Trade Organisation (WTO) estimates, is set to plummet by 13 – 32 per cent this year, with virtually all regions suffering double-digit declines in trade.
“These numbers are ugly — there is no getting around that,” said Roberto Azevêdo, WTO Director-General, in a press statement. “But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects.”
Considering that shipping represents 90 per cent of global trade — including essential commodities and medical supplies — delays in re-establishing international supply chain networks and logistics capabilities could lead to a delay in economic recovery.
Since the coronavirus crisis began, the UAE has taken rapid and extraordinary measures to keep supply chains open and safeguard and stabilise operations, while facilitating the movement of not only essential goods, but trade in general.
UAE initiatives
“Our emergency preparedness enabled us to quickly respond and adapt to the new way of functioning in light of the preventive and control measures adopted by the UAE government,” Sheikh Saeed Bin Ahmed Bin Khalifa Al Maktoum, Executive Director, Dubai Maritime City Authority (DMCA) — which monitors, develops and promotes maritime activities in the emirate — tells GN Focus.
Our emergency preparedness enabled us to quickly respond and adapt to the new way of functioning in light of the preventive and control measures adopted by the UAE government.
“DMCA has been offering a wide array of smart services even before the onset of the pandemic and our commitment to incorporating the latest technologies and smart tools into our operations has helped us maintain the delivery of services during the Covid-19 crisis. Additionally, we are also focusing on ensuring the health and safety of our employees by adhering to critical health and safety protocols,” he explains.
Ports in the UAE have implemented a range of health and safety regulations, standardised sterilisation procedures when receiving vessels, and imposed travel and physical distancing measures. Port operators have also looked at automating many of their operations to minimise human contact.
Technologies at the forefront
Dubai’s ports operator, DP World, has recently joined a blockchain platform called TradeLens, which is aimed at limiting the sector’s costly paper trail. The company plans to connect its entire business, including its 82 container terminals, using the blockchain technology.
Last month, DP World, entered a contractual agreement with the autonomous vehicle, robotics and AI specialist, DGWorld, to equip Jebel Ali Port with a fleet of autonomous internal terminal vehicles (AITV´s). “As a trade enabler, technology has powered and underpinned our capabilities as an essential economic service at a time when the UAE needs us most,” said Mohammed Al Muallem, CEO and Managing Director, DP World, UAE Region, in a press statement.
Flexibility is the new normal
In the northern emirates, RAK Ports, which operates a network of five ports, remained flexible and was able to provide sustainable solutions by taking an early initiative of segregating its workforces into dedicated zones of accommodation and working patterns, while maintaining routine operations.
All departments immediately started using personal protective equipment (PPE) and taking relevant precautions, especially where there was interaction with our stakeholder and customers, such as pilotage and operations.
“All departments immediately started using personal protective equipment (PPE) and taking relevant precautions, especially where there was interaction with our stakeholder and customers, such as pilotage and operations,” says Roger Clasquin, Chief Commercial Officer, RAK Ports.
“The environment team took an essential role, repurposing dust suppression equipment and sanitising all external buildings, roadways, berths and inside offices and the accommodation areas.
“The movement of vessels and cargoes at RAK Ports were not affected,” Clasquin adds, “But vessels were needed to provide pre-health questionnaires and crew required health checks on arrival at ports. Marine and cargo documentation are submitted via email, until the new Port Community System is operational.”
Response strategies
With several countries still in lockdown and many ports operating well below capacity, most commercial shipping companies have scaled back operations, focusing on their employees’ well-being, while making sure that they maintain operations undisrupted.
We have been working closely with the authorities throughout the region to ensure that we are completely up to date on what is and what is not permitted for crew changes and we are working hard to accommodate the need for off-signers, wherever it is possible.
“The greatest challenge has been how to handle crew changes at a time when so many travel restrictions and lockdowns were in force, and this challenge still remains,” says Fredrik Nystrom, Vice President Middle East, GAC Group.
“Some seafarers have had to remain on board long beyond their contract period, something which is a great concern for both the industry and those representing the interests and welfare of crew members. We have been working closely with the authorities throughout the region to ensure that we are completely up to date on what is and what is not permitted for crew changes and we are working hard to accommodate the need for off-signers, wherever it is possible,” Nystrom adds.
Daniel Vikstrom, Vice President Marine Services – Middle East, Inchcape Shipping Services, also points out that travel restrictions have created significant hurdles for the shipping industry at large, with thousands of seafarers stuck in an extremely difficult situation due to restrictions on crew changes. “Our priority has always been to safeguard our employees, our customers and their crew, while ensuring that all our operations are conducted in the strictest compliance with Covid-19 safety measures,” he says.
Our priority has always been to safeguard our employees, our customers and their crew, while ensuring that all our operations are conducted in the strictest compliance with Covid-19 safety measures
Inchcape Shipping Services has also invested in several new safety procedures that safeguard people and vessels. These include rigorous screening and PPE requirements for on-and off-signing crew and the completion of risk assessment documents. “During the Covid-19 pandemic, Inchcape has freely provided key information online about port restrictions around the world and where crew changes and flights are possible. The site has received more than 175,000 hits,” he adds
Lay-up and reactivation
Dealing with the issue of lay-up is another pressing task for the sector, say industry experts. Faced with a sharp drop in demand and other logistical challenges, a large number of ship owners and operators are looking to temporarily lay-up vessels to reduce the operating cost. This has called for comprehensive plans and technical measures to maintain vessels while they are out of service and their subsequent reactivation process.
“Unfortunately, there has been a need for some vessels to lay-up until the situation improves,” Vikstrom says. “Inchcape is positioned to help customers make suitable arrangements because of our global network. We are able to suggest a range of lay-up locations, with their pros and cons, and then facilitate all arrangements needed to the highest standards our customers expect.”
Impact on classification services
The Covid-19 pandemic has also posed a serious challenge for ship certification and all associated surveys and audits, which are regularly conducted by classification societies to demonstrate compliance with a wide range of international and national regulations and class rules.
During this period, Tasneef started a mechanism to remotely review documents and issue reports. Moreover, we have developed procedures and tools for remote survey and certification.
“All businesses have faced some difficulties including survey activities,” says Saeed Almaskari, CEO of the Emirates Classification Society (Tasneef). “The option of remote survey is very limited for us, as most of our fleet consist of small ships that require physical checks. However, during this period, Tasneef started a mechanism to remotely review documents and issue reports. Moreover, we have developed procedures and tools for remote survey and certification.”
As economies reopen and businesses try to rise to the challenge, the question remains: What does the future hold for maritime?
While the full extent of the impact of Covid-19 remains unknown, industry experts expect shipping demand to gradually pick up with the easing of restrictions. However, recovery to pre-crisis levels is highly unlikely in the short term.
Until a vaccine is discovered, it appears that we will have to live with and contend with the uncertainties this crisis brings but it is important to keep global supply chains open and maritime trade moving.
“The resumption of manufacturing lines and international trade could potentially be the silver lining for shipping,” says Lars Bergstrom, Vice President for Asia Pacific, GAC Group.
“Until a vaccine is discovered, it appears that we will have to live with and contend with the uncertainties this crisis brings but it is important to keep global supply chains open and maritime trade moving,” he adds.
The maritime sector in the UAE will see a faster recovery than its global peers, say analysts. And the post-Covid-19 era will be marked by the strong rebound, driven mainly by a range of timely measures, strong fundamentals, investments in intelligent technologies and financial incentives.
“The key challenge for UAE ports now is to maintain their operational efficiencies, while developing strategies from the lessons learnt, as businesses return to their previous volumes within the next six months,” says Clasquin from RAK Ports. â–
Marine Equipment sector in the UAE during Covid-19
“The leisure marine side was hit hardest with the closure of marinas in Dubai during the period of movement restriction. This resulted in the closure of boat charter companies, marine tourist companies, service companies and boat builders, and people were not able to take their boats out. The private side, however, revived fairly quickly with many boat owners having invested in servicing their boats and even ordering new ones in view of reduced future travel abroad,” says John W.R. Paul, General Manager, Exalto Emirates.
The MAP IR3 was born out of market demand and we have done well with it. We are happy and proud to have been able to contribute to a safer UAE.
When asked about the company’s newly launched mass fever screening and pandemic control system, MAP IR3, he says, “This is manufactured by Al Marakeb Technologies, a local technology development company specialising in autonomous remote control systems. The MAP IR3 was born out of market demand and we have done well with it. We are happy and proud to have been able to contribute to a safer UAE.”