Inexperienced crews continue to be a cause of concern for P&I clubs and the financial crisis is only likely to exacerbate the situation, leading members of the market have warned.
Before the onset of the economic downturn, shipowners were earning vast sums from their vessels and crews were in high demand. A steady reduction in the number of seafarers over recent years has meant that even inexperienced crews found themselves in high demand and it would appear that this trend remains, although for very different reasons.
The financial crisis has left many shipowners in a fairly dire financial situation and, in a bid to cut costs, some have looked to employ cheap crews. But cutting costs comes at more than just a financial price — the reason these crews are cheap is because they often lack experience.
North of England Club’s Paul Jennings said: “The availability of good quality crew is already an issue and will continue to be. Maintaining quality standards will be a big challenge for the shipping industry and the consequences could pass on to us.”
He added: “There’s a temptation, or a necessity, to cut costs.” But cutting costs by employing less competent and experienced crews could be reflected in an increasing number of claims, he warned.
The situation is made worse by the retirement of older and more experienced seafarers, said Steamship Mutual director Stephen Quartermaine.
“If you think back to the last recovery in shipping at the end of the 1980s, it was noticeable that quite a large amount of crew had left the industry. When the recovery did come, there was a shortage of people — and that could happen again.”
There were numerous reasons why people left the industry but two of the most common were that the work was no longer available to them, or they had just had enough of the constantly altering nature of the shipping world, he said.
West of England P&I Club underwriting director Jerry Westmore said: “Traditionally there has been a spike in crew claims because they aren’t getting work, [and] we may see an increase in arguable claims coming through.”
With an increase in vessels entering cold lay-up as a result of the shipping downturn there have been suggestions that some of the less experienced crews could be forced out of the industry, but Mr Westmore warned: “It could go two ways”.
“We could get rid of the poorer-trained crews and retain the good ones, or conversely we could get rid of the good crews and be left with the bad ones.”
As a result, the P&I clubs may see an upturn in claims in the next couple of years caused by crew negligence.