By Anastasios Maraslis
Founder and President of Marasco Marine Ltd.
The “sudden freeze” on global economic activity through quarantines, city lockdowns, social distancing, major shifts in consumption behavior, business shutdowns, as well as large-scale unemployment due to the COVID-19 pandemic, has had a serious impact on international trade and economy. The shipping industry and its vessels, employed to carry goods by sea, port-to-port, country to country, services 90% of international trade. It is not surprising that the industry suffered as global trade slowed after China’s factory shutdowns and port closures. Global trade has become increasingly reliant on China over the past two decades. Shipping is by nature a volatile business as it very much depends on world trade, supply & demand of tonnage, and is subject to cycles of prosperity and recession. Sea Transport is affected by international trade, political and geopolitical events, finance, wars, and global economic trends. The COVID-19 crisis represents a global risk that has been managed by policymakers in an unprecedented way, ‘freezing’ the global economy, with measures to contain the pandemic sinking the world economy into paralysis with increasingly disastrous effects as such measures continue. The entire world has entered a “dangerous condition”. Companies caught unprepared will need to upscale rapidly to be able to manage their daily work remotely. Shipping companies have long been able to manage their vessels remotely from home. (Marasco Marine Ltd is fully networked and already provides marine insurance policies, policy endorsements, debit notes, invoices, credit notes, cover notes, survey reports, claims reports, valuation reports, claims supporting documents, etc. in digital form, remotely at the press of a button. Videoconferences have now taken the place of personal meetings and real-time answers to clients’ queries are provided via telecom or through our Marasco website chat application).
In periods of danger like the one we are all experiencing now, reduction is not the answer. The “let’s wait and see” attitude is not the Marasco Marine way of doing things. Risk must be confronted through massive action to end the danger before it brings destruction!
Marasco Marine has strategies and policies in place to manage risks. (It’s what we do since 1991). This is a brief outline of actions that a manager could and should implement internally to confront a condition of danger efficiently:
Marasco Marine’s risk management policy in a “high-risk situation”:
- Bypass the person or persons who have caused this situation and take charge responsibly.
- Control the situation as best as possible and all dangers caused by it, (financial, physical, psychological, etc.).
- Announce any department(s) needing reorganization, placing them on high alert, urgently addressing problems that require immediate action.
- Delegate a mission of strict self-discipline to each department member, to dutifully perform their work, to self-monitor, and self-adjust (no slack can be allowed under dangerous conditions).
- Reorganize activities in such a way as to prevent the situation from reoccurring.
- Introduce a company policy to target and divert such conditions in the future, to avoid endangering the company’s future and/or survival (a contingency fund could be one solution, another might be a trading risks insurance policy, a political risks insurance policy, or an all risks loss of income insurance policy, to mention just a few).
Marasco Marine Ltd mission is to assist ship managers and ship operators on risk prevention and how to best manage risks securing their peace of mind and their companies’ prosperity. Marasco Marine has been very caring and helpful to hundreds of shipping companies since 1991, until today.