CONSTANTINOS S. GALANAKIS

CEO

ELVICTOR GROUP

The Human Element in Shipping:

Anticipating New Challenges

Elvictor’s Background

Pool of 7,000 seafarers

2,500 seafarers trained on monthly basis in Elvictor’s Training Center

Approximately 350 vessels of various types

7 different nationalities

First Crew Management company since 1977

Accreditation as paperless organization in 2002

First Crew Manager globally being accredited with ILO MLC (01/06/2010)

Development of one of the top 10 training centers in Manila

Text

Since 1977, Elvictor has

been actively involved in:

Ship Management

Elvictor’s Distinctions

Crew Management

Training

Elvictor’s Current Operations

Elvictor specializes in…

Crew Management All Inclusive

Crew Management At Cost

Crew Manning

Office-in-Office

Training Center

Fields of Specialization

Average Contract

6 months and decreasing.

Therefore the need is Doubled

Shortage Domino Effect Global Shipping consists of 84,000 vessels > 1,000 tonnage of various types

Average synthesis per vessel 17 seafarers

Need of Supply of

1,4 million seafarers

Ship Building orders & new entrants in the industry

Natural Decline:

• Age

• Illness

• Alternative work

• Criminalization of Seafarers

Big Countries like China, India,

etc. provide disproportionally

small supply

Several European Ship

Managers employ foreign

crew instead of EU

Nationals, increasing

Seafarers’ unemployment

in Europe, since

Europeans are more

expensive

Supply of seafarers

BIMCO/ISF

624,000 officers

747,000 ratings

LOCATING THE SHORTAGE PROBLEM

Striking rates

of

Unemployment

Outdated

Statistics

from

BIMCO/ISF

Global

shortage is

increasing

due to various

factors

Asian & African versus European

Asian & African Nationalities seem cost efficient

Operating Expenses of Crew Management cheaper than using European Nationalities

Asian and African Nationalities providing long lasting contract of durations and not short term like Europeans

Asian and African Nationalities seem cost efficient

Observation 1

A

Observation 2

B

Observation 3

C

Profits versus Costs Shipping Crisis and Charter Rates do not allow valuable expenses

Demands from Seafarers

cannot match the expenses

and leverage of the Principals

Principals are :

•barely making profits

•imposed with new

regulations from global

organizations

•newbuilt vessels are to float,

increasing competition

amongst them

Forex European Ship Managers pay in Euros and getting paid in Dollars

Ship Managers are paying in Euros or in other Currencies like JPY

Ship Managers are losing from the currency exchange

Charter rates are historically low

Charter rates are paid in Dollars

Dollar has been depreciated

Synthesis Increase or Decrease?

2. Charterers, Oil Majors and

Vetting increase onboard

bureaucracy and

procedures

4. Port State Controls and

other International Bodies

increase requirements

1. Flag States decrease the

minimum manning synthesis to

be competitive, affecting

onboard operations

3. ILO MLC imposes resting

hours, which is impossible

with minimum synthesis

6. POEA and similar

organizations in other

countries increase

recruitment criteria

5. Training Requirements are

increased

An oxymoron schema

Snowball effect

Regulations Ship Managers, Crew Managers & Training Centers face new regulations

Regulations and rising Bureaucracy go against the

will and stamina of the Ship Managers. This has a

snowball effect on the crew manager and the budget

of training that should be used for the seafarers

training and upgrading

Ship Managers, Crew Managers but also Training

Centers are not supported with the current market

conditions and with the vague regulations that

each Organization itself imposes from time to time

What is the next move?

What would be the Solution?

Main Pillars

A B C D

Should reduce bureaucracy

Should apply straightforward regulations

Should apply less strict criteria

Increase the manning synthesis

Ship Managers should subsidize training

Ship Managers promote their crew after 2 years of service, under specific regulated requirements

Flag states

should

Regulatory

Bodies Subsidize

Training

ILO MLC

should impose

that:

Equilibrium Organizations should get together in a round table

ITF

FLAG STATES

BIMCO/ISF

IMO

Fine Tune the regulations and procedures

Find common ground

Minimize Bureaucracy

Issue new laws that support the training and upgrading of the seafarers

P&I

CLUBS

PORT STATE CONTROLS ILO

Ship Managers,Shipping

Recruitment Companies &

Training Organizations

CLASSIFICATIONS

Chartering

Oil Majors

INTERTANKO

INTERCARGO

Other Regulatory Bodies…………

BIMCO

Provide Protection to the Ship Managers by developing REGISTERED ORGANIZATIONS “Ros” for every single member of the shipping industry, placing criteria of checking the members and evaluating them, not only on the basics that are required from Classifications, but also deeper in the ways of operating

Identify

relations and

dependencies

Strategic

measures

derived

7-S Model for the ROs Analysis steps

2 3

Analyze factors that could provide fair-play competition and upgrade their structure that will meet the criteria and obligations of the Shipping Industry, Minimizing the risk of chain reactions in the shipping industry concerning the Human Supply

Identify relations and dependencies of each Registered Organization with the Global Human Supply. Meaning how each RO may directly or indirectly help the Human Resource Supply (e.g. Charters do not pay Ship Managers, this has a chain reaction on Crew Managers and Training Centers that cannot pay or train or upgrade the ranks of the seafarers

Responsibilities to every single member – RO of the Shipping Industry

Clear and measurable legislations avoiding bureaucracy

Feedback from Human Resource Service Companies for improving the Human Resource Supply

Legislation that will govern and protect the Ship Managers from Charterers

Corporate Culture Analysis

Core Analysis

Value Chain Analysis

Analyze

factors

1

All members should be treated equally, placing specific rules and regulations to each Registered Organization depending on the field the RO belongs

Fair Treatment

Puzzle Flow for Regulating Better Shipping

Think out of the Box

Feedback on frequent annual basis and voting from all ROs

Develop anti-bureaucratic amendments and laws, like ‘superchecklists’ for the guidance of each member of the shipping industry

Regulatory Bodies to alternate their existing regulations based on the new protectionist measures that have to be taken

Impose and Empower laws to protect the Crew Manager and the Training from Ship Managers that are not prudent

Organizations get together with

Members of the Shipping Industry

Research, analyze, define and impose

alternations that would better off

the Shipping Industry

Legislate & Protect members of

the Shipping Industry by developing

Registered Organizations

Impose and Empower laws to

protect the Ship Manager from the Charterers

Make Shipping Better

Regulate all members of the Shipping Industry better, by introducing ROs

Regulate Charterers

Common Practices from Flag States

Loosen up regulations

Restructure the global shipping regulations and procedures

Identify the importance of each member to the chain of shipping

Solutions

Legislation among

government and

international bodies to

become straight forward

Legislate members of the

industry like Charterers to

Protect Ship Owners and

Ship Managers.

IMO and other regulatory

bodies to develop campaigns

to advertise seamanship

Control, Check and legislate

through EMSA the training

centers more strictly and

improve the quality of training

Legislations to empower and

provide incentives to

Seafarers

Protect Crew

Managers and

Manning Agents

Flag States, Classes, P&Is to

be part of the “fight against

shortage”

Impose ILO MLC training tactics that

should be followed by the Ship

Manager/Owner and by the Manning

Agents, e.g. subsidization of training

and upgrading of Seafarers

Shipping is global and will be in

a constant need for

specialized personnel, both

onshore and onboard

Help us in reducing unemployment by

promoting the seafaring profession, especially

amongst young people

There are outstanding career

opportunities for young people

Concluding…

Creating Surplus Domino

Subsidize training

Promote Seamanship

Ease the regulations

Governmental and International bodies and organizations to seat on a round table and agree common tactics and procedures that link to each other, in a more straightforward manner

Regulate Registered Organizations in the Shipping Industry

Thank you!!!