Covid-19 reveals how working from home will cut more shore jobs
DESPITE disruptions caused by the Covid-19 crisis, more than 80 per cent of the normal volumes continued to be shipped, according to Sea-Intelligence Maritime CEO Lars Jensen
DESPITE disruptions caused by the Covid-19 crisis, more than 80 per cent of the normal volumes continued to be shipped, according to Sea-Intelligence Maritime CEO Lars Jensen.
This was done by many if not most shore-based workers working from home, he said. CMA CGM had half he shore-based worker working remotely. In South America, it was 90 per cent.
'Right now, shore-based employees successfully ensure supply chain continuity despite having to work from home. However, in the longer term they are facing a development where there will be fewer of their jobs available,' he said.
Automating the entire end-to-end flow of data and documents will now move faster, said Mr Jensen, writing in Newark's Journal of Commerce. This means a reduced need for back-end customer service staff to handle these tasks.
Setting aside seafarers who unable to perform crew changes have worked months beyond their contracts, Mr Jensen focused on staff ashore.
Carriers were able to have most of their employees work remotely. This also means that over the past five months, the land-based employees have proven how adaptable and valuable they are in a time of crisis.
'But this is where, for them, the potential troublesome outlook also begins.' he said.
How much will the workforce be reduced. Hapag-Lloyd in 2010, shipped 4.9 million TEU and had 5,457 shore-based personnel at the end of the year. This means, as a simple average, that each employee had a productivity of 17.4 TEU per person per week.
In Q1 2020, Hapag-Lloyd's productivity using this measure was 21.6 TEU per person per week. Hence, the productivity improvement had reduced their total workforce by 2,590 people compared with a situation without such improvement. Hapag-Lloyd has a global market share of 7.2 per cent.
If all other carriers have undergone a similar productivity improvement since 2010, this means the industry has shed 36,000 jobs over the past decade. If the other carriers have not yet seen such improvement, the digitisation will push them in that direction and the job reductions will follow, he said.
'How much additional improvement will we then see going forward as a consequence of the digitisation? If we move from 21.6 TEU per person per week to, say, 25 or 30 TEU per person per week, this would mean an elimination of an additional 20,000 to 42,000 shore-based jobs in the coming years,' Mr Jensen said.