News / December 26, 2016
“Welcome”: Statement from Captain Tim Harris, Director, SIMSA
– It is a real pleasure to address you through our new website. To our many guests, welcome to Honiara and the Solomon Islands Maritime Safety Administration (SIMSA).
- Domestic Shipping: challenges and opportunities
– Shipping plays a special role in our economic future; nationally and globally.
– Confidence in the future is weak – both in developed and developing economies. There is diminishing belief in central banks’ ability to reflate economies. Private investment remains weak, almost everywhere. Trade has slowed. And government initiatives to reform and liberalise their economies to spur private investment and job creation have in most countries been slow, and in some instances gone backwards.
– The global politics have not helped. Slow growth has weakened political will to embark on needed structural reforms, even where the benefits that the population can gain from reforms are much larger than the costs they face.
– We have to find ways out of this economic and political mood we’ve caught ourselves in around the world. We have to build confidence in the future – invest in needed public infrastructure, invest in people, and liberalise rules to support private investment. And wherever we are in the world, we must address the challenge of sharing the gains from growth fairly among our people.
– Shipping, and especially domestic shipping, is a real opportunity, a bright spot in this future. It is a sector that by conservative projections has the potential to grow substantially in the next decade and beyond.
– The Asia Pacific Region especially should see gradual growth in shipping in the next decade, exceeding the growth of the Asian/Pacific economies. The reason for this has to do with the changing face of Asia and the Pacific. Rising affluence in Asia through the rapid expansion of the middle-class is growing the demand for travel exponentially. It is not surprising that China has made shipping a key part of its One Belt, One Road initiative.
– However, shipping faces major challenges, as we know, especially in the domestic market. Margins remain tight and risks are high in the competitive maritime industry. Too many ships operate hub constituency routes, and the concepts of liner shipping in the Solomon Islands are practically unknown.
– Over-tonnaging means there is not enough regular cargo or passenger demand, creating freight wars and depressing freight rates and passenger fares to unsustainable levels, but increasing the numbers of qualified sailors required for safe manning. There is growing competition for the scarce skilled manpower, particularly captains, officers, engineers and maintenance crew, so shipowners are illegally using untrained, non-qualified “wantok” crews recruited straight from the village or off the streets.
– Security threats are now a serious reality everywhere, and becoming more complex, and there is increased concern over the environmental impact of shipping that we all have to address together.
– The lower price of oil has been a boon to the maritime industry over the past few years, although it will not last forever. The industry should make use of this opportunity – to capitalise on new technologies in every segment of the shipping supply chain, to reshape our businesses and develop new competencies. For example, big data can be harnessed for planned and predictive maintenance – spotting and acting on problems before they emerge, and hence lowering costs.
– Technology also allows for better analysis of customer habits, and better relationships with customers by personalising sea travel. There is scope to use technology to improve productivity; in the ports, at sea, on board the ships and in the shipping offices ashore – going beyond the advances of the past few years.
– We must also make use of this opportunity of lower oil prices and rising demand for travel. If we do this right, we can maximise the growth in our economy. We can benefit over the next decade and beyond; but If we stick with the status quo, or worse drift into further protectionism, we will not only hamper the growth of shipping but weaken its potential to stimulate national economic growth.
- SIMSA’s strategy in domestic shipping
– Shipping is the key sector in Solomon Island’s domestic economic future. It contributes to every part of our GDP; more than in most mainland, non-island economies. Virtually every other sector of our economy depends on an efficient and advanced shipping sector. Importantly too, shipping is a relatively high productivity sector, and can create quality jobs for the future. And it has the potential to spur the growth of more enterprises, including smaller players in every segment of the supply chain, besides large players like the Hong Kong based Swire’s (on international routes), the Solomon Islands Ports Authority (SIPA) and some domestic shipowners with the larger fleets.
– Let me share some of SIMSA’s philosophy and our strategies in supporting the future growth of shipping.
- Prioritising shipping safety
– First and foremost, the safety of shipping is paramount. Governments have to devote substantial resources and effort to this area of our work; something that has been poorly understood and consequently partially neglected in the past thirty to forty years. Shipping mishaps are not just costly in terms of human lives; witness the “Princess Ashika” in Tonga and the “Rabaul Queen” in Papua New Guinea, but spectacular in a negative way – they severely dent public confidence.
– In the Solomon Islands we have had our own spectacular sinking of the “Frances Gerena” on December 18th 2013; a vessel with a Safety Certificate to carry 75 people that sank with 409 souls on board. Thanks be to God, and the diligence of SIMSA’s Maritime Rescue Co-ordination Centre (MRCC) personnel, all 409 were rescued safely, without the slightest injury – truly a Christmas miracle.
– We have witnessed the severe denting of public confidence following a string of unfortunate accidents around the world, and in particular in the Asia/Pacific Region, in just the last two years. Safety of shipping must be given top priority in both domestic and international maritime transport policy making, and we should certainly not let politics lead to decisions that compromise safety, ignore international best practices and fail to seek economic efficiency.
- Deploying technology across the supply chain
– Second, we must promote the use of technology across the supply chain. SIMSA is seeking to become an independent, not for profit, autonomous, regulatory body to be known as the Solomon Islands Maritime Authority (SIMA) funded through the current taxes and levies collected by SIG and set up under its own Act of Parliament. We believe this will enable Solomon Islands shipping, and SIMA in particular, to deliver seamless and customer-centred service to our shipping stakeholders, to be passed on to the shippers and passengers.
– Countries like Australia and some in Europe are pioneers in their extensive use of passenger self-service, whereby passengers check themselves onto the vessel, being monitored electronically and SIMA intends to explore how we might dopt these and other innovations in our own context.
- Promoting liberal market access
– Third, the government is advised to seek the benefits of greater competition among shipping lines and ships. Limiting traffic rights and implementing ownership and control restrictions hurt the traveller by limiting choice and hamper innovation in our maritime industry. In short, it prevents economies from developing to and performing at their full potential.
– This is why the international maritime community has called on governments to give their maritime industries greater commercial flexibility by lifting such restrictions. It is also why SIMSA in recent years, and SIMA in future takes a liberal approach towards competition and market access. Our end-goal is not only the success of Solomon Islands maritime industry, but also the vibrancy of the economy at the provincial and village levels.
– Our policies are therefore aimed at maximising connectivity to traditional and emerging efficiencies, and providing travellers with the benefits of competition and greater choice under-lined by strong implementation and enforcement of regulation. We welcome foreign and new carriers to operate in the Solomon Islands through shipping companies registered in the Solomon Islands alongside locally owned ones.
– As SIMA becomes better equipped and stronger; staffed by knowledgeable and experienced officers, attention will be turned to the potential of the international maritime industry, for employment, but also for strategic reasons; to gain a foothold in the Solomon Islands supply chain. Today, all of the routes that come in and out of Honiara and Noro are served only by foreign shipping companies, we are completely at their mercy.
- Ensuring infrastructure capacity in time for the future
– Fourth, we all want to avoid congestion in the ports. It hurts growth, and is negative for both passengers and the environment. We are therefore working with SIPA, planning new and expanded facilities, especially concerning the comfort and welfare of passengers, and particularly facilities for nursing mothers, mothers with young children, elderly people and the sick. SIMSA/SIMA will also embark on initiatives to tackle shipping congestion and inefficiencies.
- Developing talent and skills
– A fifth priority is to develop the human capital for shipping, both at sea and in the shipping company offices ashore.
– SPC and the IMO have increased their presentation of Regional training opportunities for administrators and regulators in the past few years, through technical cooperation programmes to promote capability development, particularly among regulatory agencies, to facilitate implementation of IMO’s Standards and Recommended Practices. But each of us, as governments, must also work with the industry to ensure that our shipping workforces are suitably-skilled to meet current and future needs.
– We know we cannot rely only on education that people receive before they get into a job. Skill requirements keep changing while they are on the job, including the need for new competencies that help us make the most of new technologies. This is clear in the shipping sector. We are therefore anticipating new skill requirements, and must keep investing in the shipping skills of the future. We must also find ways to enlarge responsibilities and improve the quality of individual jobs, and improve the quality of the working environment for every individual
– As part of this requirement, Solomon Islands has recently been awarded scholarships by the international maritime community to send young people to the Australian Maritime College, the World Maritime University and the International Maritime Law Institute in Malta. Recently a SIMSA officer has been funded by SPC to undertake a distance learning course with Lloyds Academy in the United Kingdom. It is intended that these opportunities will continue annually for some years to come.
Shipping is an opportunity, for our economy and as an enabler and catalyst for global growth. But there is much work to be done to ensure that shipping can indeed achieve its potential as an enabler for growth, and I hope that I have shared some food for thought from SIMSA/SIMA’s perspective to stimulate comprehensive discussion of the way forward.
Captain Tim Harris,
Director of Marine,
Solomon Islands Maritime Safety Administration