Trade-offs will be crucial for a resilient maritime sector amid pandemic

The Coronavirus pandemic has had a disruptive impact on the global supply chain, particularly on the port and shipping business and like all port nations, Ghana has had its fair share of the viral sting.

On the global front, the shipping sector’s recovery has been tied to the ongoing reorganisation of economic production system which could push shipping companies to rationalise services on specific routes whilst reinforcing intra-regional maritime transport networks, in the longer term.

In Ghana, strict adherence to protocols to curb the virus’ spread had a significant impact on the domestic shipping industry with unprecedented drops in both imports and exports for the first half of the year.

Official first-quarter trade figures released by the Ghana Shippers Authority have revealed the severity of the impact of COVID-19 on the country’s maritime sector, with significant declines in all aspects of the business.

The total volume of cargo—comprising both containerised and general cargo—handled by the country’s two seaports in the first quarter of 2020 decreased by a whopping 44.9 percent year-on-year, the data showed.

As shown by the industry performance for the half-year, all service providers also incurred losses in their various fields.

Shipping lines, as movers of Ghana’s maritime industry, are still counting their loss even as they continue to offer their seamless services due to the cushioning they give to the fiscal soundness and resilience of an import-laden economy.

Shipping lines shoulder the nation’s international trade aspirations and with their never-ending voyages, they cart both imports—which keeps millions of traders in permanent employment, and exports—from which the nation gets its most treasured forex earnings.

Despite feeling the brunt of the virus with blank sailings—where sailings have had to be cancelled—and, in most cases, sailing at half of their capacity, they have provided comfort and convenience to Ghanaian shippers on their loss.

The transport logistics sub-sector and by extension all the transit trade facilitators were not spared either. The usual energy and bustle usually witnessed at the Tema Port Transit Terminal drowned as the pandemic pulled the brakes on the haulage business.

Shocks to supply chains and reduced industrial activities that curtailed cargo traffic through the port mean there are fewer products to be moved by both transit and domestic haulers, and this impacted harshly on businesses on that side of the shipping value chain.

Labour pain

Marine labour was not spared either with Ghanaian seafarers stuck on vessels battling the stress of isolation while those on land continue to rue their lost incomes as the pandemic rages.

The worldwide lockdowns and bans on travel have seen some seafarers stuck on vessels because they are not signing off and since crew change has been halted, those at home cannot go onboard vessels.

Thousands of seafarers remain trapped at sea, on containerships and other cargo vessels, by travel restrictions—which is a threat to supply chains, according to the International Chamber of Shipping (ICS).

This is certainly not the time for specific or specialised favours for one particular player considering the severity of harm to the sector and its constituents.

At a time that shipping lines were reeling under the shocks of the pandemic, shippers were making some big demands; specifically, they wanted charges such as demurrage to shipping lines, rent to terminal operators and warehouse rent and interest charges payable to Customs all waived.

Much as shippers genuinely needed those waivers to reduce their cost and grow their profit margins, other service providers—like the shipping lines will need such non-tariff revenue to enable them continue to serve the interest of the industry.

Similarly, it will be extremely harsh for ports and terminal operators to adjust their charges and fees upwards but the odds will go against them should they fail to do so.

In such a situation, industry players will be required to make some sacrifices for their survival and continual dependence on each other’s services.

One thing that must be pointed out clearly is the fact that the pandemic has not spared any aspect of the shipping industry, and for that reason, it will be selfish and unacceptable for a section or group of players to demand favours or fail to accommodate their loss at the expense of other stakeholders.

Generally, we can say that a resilient maritime sector has set sail to explore opportunities off the nation’s shores but it requires the needed policy directions and supportive action from industry stakeholders to ship home the needed economic dividend that will cushion the country’s growth agenda.

But to reposition the sector for sustainable growth post-pandemic, consensus and some level of tough sacrifices that must be made which all parties must tolerate and endure.