Red Sky at Night

About 9,000 ships per year call at the port of the Free and Hanseatic City of Hamburg, Germany. Each of those 9,000 ships – whether bulkers, tankers, box carriers, dredgers, offshore support vessels or elegant cruise ships like the Queen Mary 2 – must, on their way in, steam down the Elbe river.

 So when I’m in the mood for spectacle, I walk to the pier and watch the parade.

What do all those 9,000 ships have in common? They all worry about the weather.

ALL ABOUT THE WEATHER

From that pier, the ships look monolithic and invincible. I remember a night when we spotted the CSCL Globe passing by. We could barely see her running lights, but even at a distance we heard the rumble of her plants loud and clear – 69,720 kilowatts moving a 400-meter vessel with 184,000 deadweight tons. Who can imagine any force strong enough to beat a ship like that?

Take a ship like the CSCL Globe out of the Elbe river, place her in the ocean. Whereas in the river she can look graceful and placid, in the ocean she’ll judder and roll into the waves. As ships scale up, the weather scales up too. The elements of the earth and the ocean remain a struggle for any commercial vessel. No matter how big the ship, she is vulnerable.

Spray, salt and wind – at sea, romance and risk are intertwined.

It’s often all about the weather.

Red sky at night, sailors’ delight

Red sky at morning, sailors’ warning.

-Mariners’ Rhyme

Even with modern technology, equipment and shipbuilding expertise flowing into a ship like CSCL Globe, it isn’t any easier for the captain to balance the competing needs of the owners, cargo interests and crew under his command. As soon as the lines are cast off, between the port of departure and the port of arrival, berth-to- berth, the voyage is fraught with hazards.

“You don’t have to set sail to see how nasty it is for the poor people out at sea. It’s life and death for them,” says Peter Jefferson, the once-upon-a-time voice of the BBC’s “Shipping Forecast.”

It’s possible to give this insight a more actuarial slant. In the words of Sven Gerhard of Allianz Global & Corporate Specialty (AGCS), a major marine insurer: “The fact that superstorms are causing ships to sink is concerning. We are seeing more and heavier natural catastrophe events. Weather routing will continue to be a critical component of the safe navigation of vessels.” Yet for the con- signors and consignees who drive trade, it does not seem to be understood that pushing the lowest possible price to carry a container from A to B can risk lives.

“The economic downturn – and its impact on the shipping sector – is likely to have a negative impact on safety,” adds Captain Rahul Khanna, AGCS’s Global Head of Marine Risk Consulting. “Many sectors, such as general cargo, bulk and offshore, are already challenged, and any drop in safety standards will be a serious cause for concern.” Such drops in safety can be reflected in deferred maintenance, which threatens the reliability of equipment, or in pressure on crews to ignore risks that arise during the voyage in order to meet deadlines or avoid demurrage.

RED LINE

A good captain, in theory, will protect against this kind of brinksmanship. The captain’s judgment trumps all other considerations. On board, the captain’s word is law. But sometimes, as may have been the case with the controversial, recent loss of El Faro, the captain can have his own reasons, translated down from top management, for ultimately getting the call wrong.

The conversation between Second Mate Danielle Randolph and Captain Michael Davidson, immortalized in the bridge recordings of El Faro, reflects this old tension:

“It used to be just, ‘We’re doing it. You people are sitting in your office behind a desk and we’re out here. We’re doing it,’” says Second Mate Randolph.

“Well, I’m extending that professional courtesy because it does add a hundred and sixty nautical miles to the distance,” replies Captain Davidson. “It’s 160 more miles. That’s more fuel. You know?”

The captain of El Faro was reluctant to skirt the storm. He had been waiting for permission from Tote Maritime, the owners, to change course. This permission was one that Tote Maritime insisted Captain Davidson did not need as he was, in fact, in charge. Nonetheless, the silence from the shore office was enough to keep El Faro heading into the storm. And maybe due to concern for the bunker needed to steam another 160 nautical miles, all hands were lost.

When competitive pressure and the drive for efficiency lead, as AGCS puts it, to a “drop in safety standards,” this is a red line. Every owner should demand a price floor for his charter rates. No matter how important it may be to keep the wheels of global commerce turning, conscience demands that the cost of safety be passed along to either end of the logistics chain, i.e., to the shipper or the consumer. Forcing the middle of the chain to bear the burden leads to the principle of “blood priority” or, as it is sometimes called, a “tombstone mentality” – namely, that deficiencies are only addressed once people have died, that a lesson is only learned after a tragedy.

Shipping supports our lifestyle, but like any critical infrastructure we rely on, such as the New York City subway, we unfortunately pay the most attention when there’s a breakdown.

APPORTIONING RISK

It would be better if owners, charterers and cargo interests cooperated to ensure that each voyage was a successful commercial venture for all participants, and that everybody went home with a fair and reasonable share of the profit. This would require each of the parties to understand that its prosperity and wellbeing are linked to the others.

The supply chain that feeds our global economy of scale is, however, both impersonal and unforgiving. This means that the triangulation between commercial viability, sound navigation and risk management is not based on visceral relationships but on market prices – like charter rates, cents-per-mile travelled or the total amount of a fuel surcharge. When costs are cut, the shipper does not know whose pocket it pinches.

Weather risk is not sensibly borne by the ship or its crew. Most contracts understand this and incorporate clauses which give the ship and crew excuses to stop working if the weather turns. For ex- ample, the counting of “laytime” – time used in port for loading and unloading – can stop if port authorities or port regulations state that the wind force makes cargo work too dangerous. If the laytime isn’t used, the charterer has more time at no extra cost, at least until the weather improves. As a result, the charterer is less likely to pressure the owner to make up time elsewhere.

Another example is the “weather working day.” If the weather interferes with cargo work during regular working hours, the counting of laytime is suspended as a general exception. A properly written statement of facts can relieve time pressure for the crew by correctly and specifically setting out when the bad weather took place: Was it during or not during regular working hours? This ensures that bad weather during working hours will actually stop the counting of laytime, the way it should.

A captain can help his crew by using the contractual rules that are to his advantage. In the end, it makes no sense to react to pressure that doesn’t really exist. Conversely, a failure to use the contractual rules – by not including, for example, in a statement of facts the times of day required to draw a conclusion about a “weather working day” – can add pressure to an already tough situation.

The owner and charterer may have different opinions about laytime. The owner will want to keep counting since, when the laytime is used up, demurrage starts, and this triggers additional compensation for the owner to be paid by the charterer. Put simply, demurrage is “overtime” pay owed once the laytime included in the charter party’s cost has been used up. The captain may be in an uncomfortable position between the desires of the charterer and the owner. It’s in this kind of situation that an accurate reading of the charter party is most important.

Another classic weather provision in charter parties is “deviation.” The terms here are exceedingly generous. The Safety of Life at Sea (SOLAS) Convention Regulation 33 permits – and, indeed, demands – deviation for the purpose of rendering aid to persons in distress at sea. Under the general clauses of GENCON, arguably the world’s most commonly used standard form charter party, deviation is also permitted if a captain must do so to protect the safety of his ship or crew even if it’s the captain’s own fault that the safety of ship or crew is in danger.

In other words, it doesn’t matter how the bad situation arose. The captain must still do what it takes to avoid casualties. The Hague Rules extend this right of deviation even to cases of merely saving property.

LIFE OR DEATH

At sea, we must respect the fact that the weather is still life or death, despite all our grand technology. A safe voyage requires not just skill at sailing but also a certain awe and fear of the ocean. The rules giving captains the authority to deviate and avoid harm or stop work in bad weather are only the beginning.

We should feel responsible for creating a framework to support the captain in making the right decision, not pressure him to put profit above all else. After all, captains are only human, and humans make mistakes. But where mistakes are encouraged, they are more common.   MarEx