Stolt-Nielsen CEO: Costly ship rerouting due to overdue crew changes impacting scheduling

Pricey rerouting of ships needed to carry out overdue crew changes, significantly hampered by the ongoing COVID-19 pandemic, continues to impact scheduling, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said.

Shipping companies have predominantly been left to their own devices in dealing with what has become a major humanitarian crisis for seafarers.

In total, some 400,000 people are currently stranded on vessels, and a similar number are prevented from returning to ships, either to earn their living or to return home, due to COVID-19 restrictions on travel and transit. 

Travel bans, embarkation and disembarkation restrictions or suspension in the issuance of travel documents have severely strained the working conditions in the global shipping sector.

As a result, seafarers are either unable to board ships or are trapped on board, extending their contracts beyond their original tours of duty – and often beyond the 11 months maximum period on board, according to international labour standards.

The situation is close to a tipping point as calls from industry bodies on governments to step up and designate seafarers as key workers to expedite the process are met with inaction.

Fears have been raised that the continued status-quo might jeopardize the safety of ships and the environment, as overworked and fatigued seafarers face severe physical and mental health challenges.

As a result, many shipowners have resorted to diverting ships to locations where crew changes are possible, which often meant rerouting from the usual sailing routes used for cargo delivery.

Companies like Precious Shipping even accepted cargoes that are not attractive enough commercially just to get ships in the Atlantic Ocean back towards Asia and close enough to Thailand or India to sign off overdue sailors.

Stolt-Nielsen Limited reported a third-quarter net profit of $29.2 million, with revenue of $474 million, compared with a Q2 2020 net profit of $3.6 million, with revenue of $503.5 million.

The net profit for the first nine months was $12.9 million, with revenue of $1,474.5 million, compared with a net profit of $15.2 million, with revenue of $1,536.2 million a year earlier.

“During the third quarter, all of our divisions generated improved results in the face of continued challenges brought on by the COVID pandemic. While the global economic outlook remains uncertain, we are cautiously optimistic about the fourth quarter and beyond, based on the contract portfolio we have secured across our three logistics businesses,” Stolt-Nielsen added.

Oslo-listed major said that early and decisive actions to reduce costs and preserve cash secured the group approximately $500 million in available liquidity at the end of the third quarter of 2020.

In August, the company bought five 26,000 dwt stainless steel chemical tankers in the second-hand market, which are scheduled for delivery starting December 2020.

The fuel-efficient ships are expected to improve the company’s CO2 footprint as the shipowner retires some of its older ships in the upcoming few years.

The company owns three global bulk liquid and chemicals logistics businesses (Stolt Tankers, Stolthaven Terminals, and Stolt Tank Containers), Stolt Sea Farm, and investments in LNG.