How the Russian invasion added crew shortages to shipping turmoil

Thousands of miles from Ukraine on a tugboat off Australia, chief mate Simon Prokopenko was trying to figure out how to get home and fight.

“I can not stand aside when this kind of thing is happening in my place,” he told the FT on a call in the weeks after Russia invaded Ukraine.

For the global shipping industry, decisions like this risk becoming a big problem. Together, Ukraine and Russia account for 275,000 of the world’s 1.9mn commercial seafarers, jointly surpassing the Philippines, the biggest supplier of maritime workers.

Ukraine on its own provides 5.4 per cent of the officers that head crews on the 74,000 plus ships trading internationally.

Now, with Ukrainian President Volodymyr Zelensky urging people to stay at home and take up arms, and with mariners like Prokopenko on their way back to the country, shipping executives are warning of shortages of vital staff that keep world trade moving.

“They are one of the top five [providers of] officers at sea today. Losing this source overnight will lead to strain on overall global crew supply, ”said Carl Schou, chief executive of Wilhelmsen Ship Management, one of the world’s largest ship managers.

Russia’s invasion of Ukraine is already causing significant supply chain problems. The biggest container shipping lines have suspended new bookings to Russia for fear of carrying sanctioned cargo, Europe’s ports are suffering from congestion caused by customs checks to comply with sanctions and the Black Sea has been classified as a high risk war zone by the Joint War Committee , an advisory body that guides insurers, hitting grain, iron ore and oil exports.

Oleg Grygoriuk, chair of the Marine Transport Workers Trade Union of Ukraine, estimates that 55 to 60 percent of Ukraine’s 80,000 or so seafarers are currently on ships and, of those at sea, roughly 20 percent want to come back and fight.

The union is advising them to stay on board for their own safety and to keep global logistics running.

“If most of the Ukrainian seafarers leave then there’ll be no nationality able to take their positions and this will be catastrophic for world shipping,” he said.

On a bulk carrier loaded with coal heading to Turkey, Captain Oleksiy Luchyno is one of those who plans to keep working to the end of his contract and then get his family out of Ukraine before deciding what to do next. However he dares not ask his six Ukrainian colleagues about their plans.

“I try to avoid this question,” he said.

Bjorn Hojgaard, head of Hong Kong-based Anglo-Eastern Univan Group, another large ship manager, said it has suspended crew changes for some of the 1,000 Ukrainians it employs partly because Ukrainian men aged 18-60 are now not allowed to leave the country .

For an industry that has struggled with border restrictions over the past two years – at one point in the pandemic 400,000 seafarers were stuck on land or sea – and more recently outbreaks of the Omicron coronavirus variant on ships, “This is the next problem the world is facing in the transport sea chain, ”said Henrik Jensen, managing director at Danica Crewing Specialists, a Hamburg-based company with 1,200 Ukrainian workers.

Russia’s increasing isolation is also causing problems.

Executives say paying Russian nationals is much more difficult because the country’s access to Swift, the major international payment network, has been severely curtailed. At the same time, the cessation of many flights out of Russia has made it difficult to bring crew to where they are needed.

The war has also thrown up questions about corporate responsibilities in an industry that often employs people on a contractual basis.

“You have an obligation to get them home, so what does that look like?” said Stephen Cotton, general secretary of the International Transport Workers’ Federation.

He said a further risk to global supply chains comes from dockworkers who may refuse to handle Russian cargo – sanctioned or not.

The UK has banned Russia-owned, operated, controlled, registered or flagged ships from entering but still permits cargo from Russia to be unloaded.

But the UK union Unite and North America’s International Longshore and Warehouse Union, which both represent dockworkers, have stated their intention to refuse to unload or load any Russian cargo.

Manish Singh, chief executive of Ocean Technologies Group, a company that trains crews, said the challenge was not how to replace Ukrainians but sustaining global trade until these seafarers are in a position to work again. “These [expert] communities take decades to grow, ”he said.

People like Prokopenko, whose wife and three children had fled Ukraine for Poland, feel they have little choice but to exit the industry for now. “If we do not do this, then there will be no home and there’s no point working at sea.”