Shipping is more than just “the logistics of the sea.” It is also the invisible side of the Great Depression, the part of trade that is anything but virtual, the dark side of global labor, and a key indicator of the new world balance of power, with pressing issues such as the impact of mega-freighters on the environment and the role of commercial ships in the rescue of migrants.
Shipping is a world unto itself that few know about, even as we have all the statistics to understand its role. Right now, there are 20 million containers travelling the seas and oceans, and at least 10,000 each year end up on the bottom. In 2016, according to the Safety & Shipping Review issued by the insurer Allianz, 85 ships were lost from the global fleet of vessels with a gross weight of over 100 tons—due to sinking, running aground, explosions, fires and other accidents, especially in the waters of South China and South-East Asia.
Shipping is also yet another “bubble,” similar to the one that burst with the bankruptcy of Lehman Brothers and engulfed the planetary economy. Deutsche Bank recently sold off its “problem loans” in this sector (worth $1 billion), where companies owe banks more than $4 billion overall. Two years ago, the Korean company Hanjin Shipping went bankrupt, abandoning goods worth $14 billion in ports around the world. Many shipyards, transport companies, brokers and ship’s crews are surviving on the verge of bankruptcy.
The shipping companies have been ordering larger and larger ships (the Triple E Class ships are 400 meters long, can hold 18,000 containers and cost $185 million each), thinking that the costs would be offset due to scale. But when the freight rates fell, bankruptcies were soon to follow. Meanwhile, the large shipping operators seem to be heading toward consolidation, resulting in giant companies which inevitably result in the failure of small and medium-sized operators, particularly those working on international routes.
When such a bankruptcy occurs, some ships are left waiting for orders, and others are abandoned along with their crew. It happened in Italy: foreign sailors were forced to remain onboard, because if they left the ship without the owner’s permission they would lose the right to their salaries, and they would become undocumented migrants.
Today, Shanghai is the world’s largest port in terms of container traffic, with Chinese ports taking seven spots of the top 10. Rotterdam remains the largest port in Europe, while Italy has seen its Genoa and Gioia Tauro slide out of the top 50 for global ports.
The freight volume transported in the 28 member states of the European Union amounts to around 3.5 billion ton-kilometers per year. Greece, with its 4,199 vessels, still holds the top spot above China (while Italy has just 768). However, Maersk (Denmark) is first among liner shipping companies in terms of container ship capacity (3.2 million TEU, or Twenty-foot Equivalent Unit, the standard size of 20x12x8-foot containers).
The system is apparently highly regulated, but different sets of legislation are often in competition with each other. The International Maritime Organization is the UN agency that issues general rules, which only apply after a certain number of countries have ratified them. In addition to these, there are specific regulations for each country. A few years ago, an Egyptian ship owner complained that the sailors aboard their ship, docked in Venice and flying the Egyptian flag, had gone on strike, which they could not do—the owner claimed—because this was illegal in Egypt.
Each ship is a unique workplace, both because the legislation that applies on board depends on the ship’s flag and because sailors may have different employment contracts with one of the thousands of recruitment agencies which are supporting the logistics of the sea. It is no coincidence that a large part of the global fleet is registered under “flags of convenience”: 8,052 ships are registered in Panama, 3,296 in Liberia and another 3,199 in the Marshall Islands. In 1998, Italy also approved a kind of local “flag of convenience,” the pompously named “International Registry,” which offers tax and social security advantages for ship owners, as well as the possibility to recruit foreign seamen.
On June 25, World Maritime Day, the Indian seamen’s trade union launched a hunger strike that has spread to all the ports of the country: Mumbai, Kochi, Chennai, Kolkata, Andaman, Goa, Gujarat and Andhra Pradesh. The 150,000 Indian workers in the sector demanded raises of $100-150 per month, better pensions and a greater number of personnel aboard each ship.
Unlike other workers, when a sailor sells his labor to an employer, they in fact sell themselves as a whole, to an almost full extent, for a more or less determined period measured in months rather than in hours or working days. The ship will be their only place for work, life and leisure for long periods of time. Contracts are usually for a single journey. Lower-ranked sailors typically come from low-wage countries and prefer long contracts, while at the opposite end of the spectrum, Western European officers usually work on contracts for a few months.
Paradoxically, shipping and migrants are inseparable. At least 1.5 million people are aboard the enormous container ships at any time, with a strong predominance of Chinese, Filipinos, Indonesians and Indians.
We saw the connection with migration in the Sicily Channel at the end of June, with the Alexander Maersk and its 25-meter “walls.” It had to rescue 108 migrants, needing the Lifeline NGO ship and its volunteers to be able to get them onboard, and then headed to Pozzallo, where it had to wait for three days for the propaganda posturing between the Chigi Palace and the Interior Ministry to end. Meanwhile, the company lost $30,000 per day plus penalties for the late delivery of goods, as well as risking possible sanctions by the IMO for violating the Hamburg Convention.
Every year, more than five million seafarers pass through Italian ports, on ships carrying raw materials, semi-finished and finished goods, both legal and illegal. Italy offers little in terms of services for these sailors: the only part of it they see is often the docks. Some associations, such as the Apostolato del mare (Apostleship of the Sea) are trying to go beyond this, for instance in Venice, but the sailors often don’t have time to spend on the shore more than for a phone call to the family and a few quick purchases.
Finally, we must not forget the issue of electronic security in shipping. The ships are subjected to increasingly sophisticated controls, but it is clearly still the case that various illegal goods are being transported in their holds (particularly in the containers): from weapons to cocaine, from counterfeit products to asbestos. The controls are often only formal, and carried out according to algorithms that calculate the danger based on certain risk variables for different types of goods.
Armed conflicts, from Libya to Syria and Yemen, are often sustained through weapons arriving by sea. The batch of cocaine found hidden in a porphyry shipment from Argentina via Spain, aimed at supplying the Trentino region, is also a textbook case. On the other hand, the slowdown due to controls can push companies to direct their shipments elsewhere, so they need to be done quickly. Time is the crucial element, while inspection tools and personnel are limited. As a result, to avoid losing shipping traffic, officials sometimes turn a blind eye.