Ships and Shipping

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    New Freighters Could Ease Red Sea Cargo Disruptions

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    Analysts and shipping executives say they expect costs to fall later this year as companies receive vessels they ordered two to three years ago.After the Houthi militia started attacking container ships in the Red Sea last year, the cost of shipping goods from Asia soared by over 300 percent, prompting fears that supply chain disruptions might once again roil the global economy.The Houthis, who are backed by Iran and control northern Yemen, continue to threaten ships, forcing many to take a much longer route around Africa’s southern tip. But there are signs that the world will probably avoid a drawn-out shipping crisis.One reason for the optimism is that a huge number of container ships, ordered two to three years ago, are entering service. Those extra vessels are expected to help shipping companies maintain regular service as their ships travel longer distances. The companies ordered the ships when the extraordinary surge in world trade that occurred during the pandemic created enormous demand for their services.“There’s a lot of available capacity out there, in ports and ships and containers,” said Brian Whitlock, a senior director and analyst at Gartner, a research firm that specializes in logistics.Shipping costs remain elevated, but some analysts expect the robust supply of new ships to push down rates later this year.Before the attacks, ships from Asia would traverse the Red Sea and the Suez Canal, which typically handles an estimated 30 percent of global container traffic, to reach European ports. Now, most go around the Cape of Good Hope, making those trips 20 to 30 percent longer, increasing fuel use and crew costs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Drought Saps the Panama Canal, Disrupting Global Trade

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    For over a century, the Panama Canal has provided a convenient way for ships to move between the Pacific and Atlantic Oceans, helping to speed up international trade.But a drought has left the canal without enough water, which is used to raise and lower ships, forcing officials to slash the number of vessels they allow through. That has created expensive headaches for shipping companies and raised difficult questions about water use in Panama. The passage of one ship is estimated to consume as much water as half a million Panamanians use in one day.“This is the worst we have seen in terms of disruption,” said Oystein Kalleklev, the chief executive of Avance Gas, which transports propane from the United States to Asia.The problems at the Panama Canal, an engineering marvel that opened in 1914 and handles an estimated 5 percent of seaborne trade, is the latest example of how crucial parts of global supply chains can suddenly seize up. In 2021, one of the largest container ships ever built got stuck for days in the Suez Canal, choking off trade. And the huge demand for goods like surgical masks, home appliances and garden equipment during the pandemic strained supply chains to their breaking point.Before the water problems, the canal handled some 38 ships a day. In July the authorities cut that to 32 vessels.Fewer passages could deprive Panama of tens of millions of dollars in revenue, push up the cost of shipping and increase greenhouse gas emissions when ships travel longer routes.In Panama, a lack of water has hampered canal operations in recent years, and some shipping experts say vessels may soon have to avoid the canal altogether if the problem gets worse. Fewer passages could deprive Panama’s government of tens of millions of dollars in annual revenue, push up the cost of shipping and increase greenhouse gas emissions when ships travel longer routes.Though Panama has an equatorial climate that makes it one of the wettest countries, rainfall there has been 30 percent below average this year, causing water levels to plunge in the lakes that feed the canal and its mighty locks. The immediate cause is the El Niño climate phenomenon, which initially causes hotter and drier weather in Panama, but scientists believe that climate change may be prolonging dry spells and raising temperatures in the region.Before the water problems, as many as 38 ships a day moved through the canal, which was built by the United States and remained under its control until 2000. The canal authority in July cut the average to 32 vessels, and later announced that the number would drop to 31 on Nov. 1. Further reductions could come if water levels remain low. The canal authority is also limiting how far a ship’s hull can go below the water, known as its draft, which significantly reduces the weight it can carry.Container ships, which transport finished consumer goods, typically reserve passage well in advance, and have not faced long delays. But ships carrying bulk commodities generally don’t book passage.Tree trunks are visible due to low levels of water. The drought also presents tough choices for Panama’s leaders, who must balance the water needs of the canal with those of residents.Vessels waiting to cross the Panama Canal. The passage of one ship is estimated to consume as much water as half a million Panamanians use in one day.This presents bulk shipping companies with an expensive calculus: They can risk waiting for days, pay a big fee to jump the line or avoid the canal entirely by taking a longer route.Mr. Kalleklev, the shipping executive, said his company decided in August to pay $400,000 in a special auction to move a ship ahead in the queue, roughly doubling the total cost of using the canal. Other companies have paid over $2 million, a cost they will sometimes bear to ensure ships don’t miss their next assignment. A portion of these extra costs will be passed on to consumers, already pummeled by inflation.The pain, however, has been limited because the U.S. economy is not running very hot and demand for imported goods is relatively muted.“If this was a year ago, when we still had record high freight rates and consumers still spending a lot on containerized goods from the Far East, then you would see more drama than you have now,” said Peter Sand, chief analyst at Xeneta, a shipping market analytics company.But traffic through the canal is likely to remain at lower levels in the coming months. Reducing passages helps conserve water, because huge amounts are used up every time a ship goes through the locks as it travels the 40 miles across Panama.The drought also presents tough choices for Panama’s leaders, who must balance the water needs of the canal with those of residents, over half of whom rely on the same sources of water that feed the canal.The canal’s board recently proposed building a new reservoir in the Indio River to bolster the water supply and increase traffic through the canal, which generates over 6 percent of Panama’s gross domestic product. Under the plan, the new water supply could allow for an additional 12 to 15 passages daily.For over a century, the Panama Canal has provided a convenient way for ships to move between the Pacific and Atlantic Oceans.The canal’s board recently proposed building a new reservoir in the Indio River to bolster the water supply and increase traffic through the canal.“In optimal terms, the canal can handle 38 transits per day, so 12 to 15 is a lot,” said Rodrigo Noriega, a lawyer and a columnist for Panama’s La Prensa newspaper.Building the reservoir is expected to cost nearly $900 million, and the canal authority could start accepting bids from contractors toward the middle of next year with construction starting early in 2025. But that timeline could well be delayed; the construction of larger locks was completed two years late, in 2016, and that project was marred by cost disputes.The new reservoir would also involve acquiring land that is protected by a 2006 law, and displace at least some of its inhabitants. Mr. Noriega said he expected Panama’s legislature to pass a law that would lift the ban on acquiring land. But he and others note that new water sources could also be built in other places.Without a new water source, the canal could lose significant amounts of business. Other ocean routes are, of course, longer and more expensive, but they are less likely to have unpredictable delays. One alternative is to transport goods between Asia and United States through the Suez Canal to the East Coast and Gulf Coast. Another is to ship goods from Asia to the West Coast ports — and then transport them overland by train or truck.“In theory, something that offers a cheaper, shorter route should always be in favor, but it’s the uncertainty that can be a killer,” said Chris Rogers, head of supply chain research at S&P Global Market Intelligence.Protracted disruptions at the canal could stoke interest in building land routes in Mexico, Colombia and other countries that have coastlines on both oceans, said Richard Morales, a political economist who is running as an independent candidate for vice president in an election next year.The efforts to secure new water supplies could be a race against climate change.Because interest in building a canal dates to the 19th century, Panama has rainfall records going back some 140 years. That gives scientists more confidence when concluding that a weather change is a permanent shift and not merely random, said Steven Paton, a director of the Smithsonian Tropical Research Institute’s Physical Monitoring Program on an island in Lake Gatun, which makes up a large part of the canal and supplies most of its water.He said that while scientists were unsure about climate change’s impact on El Niño, two of the driest El Niño periods of the last 140 years had occurred in the last quarter-century, and that the current one could be the third.“It doesn’t say that this is climate change,” Mr. Paton said, “but it does say that this is wholly consistent with almost all of the climate change models.”Sol Lauría More

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    Shipping Contributes Heavily to Climate Change. Are Green Ships the Solution?

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    On a bright September day on the harbor in Copenhagen, several hundred people gathered to welcome the official arrival of Laura Maersk.Laura was not a visiting European dignitary like many of those in attendance. She was a hulking containership, towering a hundred feet above the crowd, and the most visible evidence to date of an effort by the global shipping industry to mitigate its role in the planet’s warming.The ship, commissioned by the Danish shipping giant Maersk, was designed with a special engine that can burn two types of fuel — either the black, sticky oil that has powered ships for more than a century, or a greener type made from methanol. By switching to green methanol, this single ship will produce 100 fewer tons of greenhouse gas per day, an amount equivalent to the emissions of 8,000 cars.The effect of global shipping on the climate is hard to overstate. Cargo shipping is responsible for nearly 3 percent of global greenhouse gas emissions — producing roughly as much carbon each year as the aviation industry does.Figuring out how to limit those emissions has been tricky. Some ships are turning to an age-old strategy: harnessing the wind to move them. But ships still need a more constant source of energy that is powerful enough to propel them halfway around the world in a single go.Unlike cars and trucks, ships can’t plug in frequently enough to be powered by batteries and the electrical grid: They need a clean fuel that is portable.Ursula von der Leyen, center, the president of the E.U. Commission, stands with the captains of the Laura Maersk as well as company and government officials in Copenhagen in September.Betina Garcia for The New York TimesThe Laura Maersk is the first of its kind to set sail with a green methanol engine and represents a significant step in the industry’s efforts to address its contribution to climate change. The vessel is also a vivid illustration of just how far the global shipping sector has to go. While roughly 125 methanol-burning ships are now on order at global shipyards from Maersk and other companies, that is just a tiny portion of the more than 50,000 cargo ships that ply the oceans today, which deliver 90 percent of the world’s traded goods.The market for green methanol is also in its infancy, and there is no guarantee that the new fuel will be made in sufficient quantities — or at the right price — to power the vast fleet of cargo ships operating worldwide.Shipping is surprisingly efficient: Transporting a good by container ship halfway around the world produces far less climate-warming gas than trucking it across the United States.That’s true in part because of the scale of modern cargo vessels. The biggest container ships today are larger than aircraft carriers. Each one is able to carry more than 20,000 metal containers, which would stretch for 75 miles if placed in a row.That incredible efficiency has lowered the cost of transport and enabled the modern consumer lifestyle, allowing retailers like Amazon, Walmart, Ikea and Home Depot to offer a vast suite of products at a fraction of their historical cost.Yet that easy consumption has come at the price of a warmer and dirtier planet. In addition to affecting the atmosphere, ships burning fossil fuel also spew out pollutants that reduce the life expectancy of the large percentage of the world’s people who live near ports, said Teresa Bui, policy director for climate at Pacific Environment, an environmental organization.Cargo ships at the Port of Los Angeles in 2021 sometimes had to wait days to dock because of congestion, producing huge amounts of pollution.Coley Brown for The New York TimesThat pollution was particularly bad during the Covid-19 pandemic, when supply chain bottlenecks caused ships to pile up outside of the Port of Los Angeles, producing pollution equivalent to nearly 100,000 big rigs per day, she said.“They have been under regulated for decades,” Ms. Bui said of the shipping industry.Some shipping companies have tried to cut emissions in recent years and comply with new global pollution standards by fueling their vessels with liquefied natural gas. Yet environmental groups, and some shipping executives, say that adopting another fossil fuel that contributes to climate change has been a move in the wrong direction.Maersk and other shipping companies now see greener fuels such as methanol, ammonia and hydrogen as the most promising path for the industry. Maersk is trying to cut its carbon emissions to zero by 2040, and is pouring billion of dollars into cleaner fuels, along with other investors. But making the switch — even to methanol, the most commercially viable of those fuels today — is no easy feat.Switching to methanol requires building new ships, or retrofitting old ones, with different engines and fuel storage systems. Global ports must install new infrastructure to fuel the vessels when they dock.Perhaps most crucially, an entire industry still needs to spring up to produce green methanol, which is in demand from airlines and factory owners as well as from shipping carriers.Methanol, which is used to make chemicals and plastics as well as fuel, is typically produced using coal, oil or natural gas. Green methanol can be made in far more environmentally friendly ways by using renewable energy and carbon captured from the atmosphere or siphoned from landfills, cow and pig manure, or other bio waste.By using green methanol, the Laura Maersk could produce 100 fewer tons of greenhouse gas per day, equivalent to the emissions of 8,000 cars.Betina Garcia for The New York TimesCargo ships require fuel sources that are powerful enough to propel them halfway around the world in a single go.Betina Garcia for The New York TimesFlemming Sogaard Christensen, the chief engineer of the Laura Maersk, inside the engineering room. The ship’s engine can burn oil or a greener type of fuel made from methanol.Betina Garcia for The New York TimesBut the world today does not yet produce much green methanol. Maersk has committed to using only sustainably produced methanol, but if other shipping companies end up using methanol fuel made with coal or oil, that will be no better for the environment.Ahmed El-Hoshy, the chief executive of OCI Global, which makes methane from natural gas and greener sources like landfill gas, said companies today were producing “infinitesimally small volumes” of green methanol using renewable energy.“Companies haven’t done much in our industry yet quite frankly,” he said. “It’s all hype.”Fuel producers still need to master the technology to build these projects, he said. And in order to finance them they need buyers who are willing to commit to long-term contracts for green fuel, which can be three to five times as expensive as conventional fuel.Maersk has signed contracts with fuel providers including OCI and European Energy, which is building in Denmark what will be the world’s largest plant producing methanol with renewable electricity. The shipping company already has clients like Amazon and Volvo that are willing to pay more to have their goods transported with green fuels, in order to reduce their own carbon footprints.But many other companies are not yet willing to pay the necessary cost for greener technologies, Mr. El-Hoshy said.The missing piece, said Mr. El-Hoshy and others in the shipping and methanol industries, is regulation that would help level the playing field between companies trying to clean up their emissions and those still burning dirtier fuels.The European Union is ushering in rules that encourage ships to decarbonize, including new subsidies for green fuels and penalties for fossil fuel use. The United States is also spurring new investments in green fuel production and more modern ports through generous domestic spending programs.Maersk has clients like Amazon and Volvo that are willing to pay more to have their goods transported with green fuels, in order to reduce their own carbon footprints.Betina Garcia for The New York TimesBut proponents say the key to a green transition in the shipping sector are global rules that are pending through the International Maritime Organization, the United Nations body that regulates global shipping.The organization has long received heavy criticism for its lagging efforts on climate. This summer, it adopted a more ambitious target: eliminating the global shipping industry’s greenhouse gas emissions “by or around” 2050.To get there, nations have promised to agree on a legally binding way to regulate emissions by the end of 2025, which they would put into effect in 2027.Yet countries have yet to agree on what kind of regulation to use. They are debating whether to adopt a new standard for cleaner fuels, new taxes per ton of greenhouse gas emitted or some kind of mix of tools.Some developing countries, and nations that export low-value goods like farm products, say that strict regulation would raise shipping costs and be economically harmful.Proponents of the regulation — including Maersk — say it’s necessary to avoid penalizing those who are trying to clean up the business, and provide certainty about the industry’s direction.“There has to be an economic mechanism by which you level the playing field so that people are incentivized and not punished for using low-carbon fuels,” said John Butler, the chief executive of the World Shipping Council, which represents container carriers including Maersk.“Then you can invest with some confidence,” he added.A container ship traveling halfway around the world produce less climate-warming gas than a truck traveling across the United States.Betina Garcia for The New York TimesVincent Clerc, the chief executive of Maersk, said the company would continue to adopt new green technologies as they became available.Betina Garcia for The New York TimesStill, Maersk acknowledges that green methanol is unlikely to be the final solution. Experts say that the fuel’s reliance on finite sources of waste, like corn husks and cow manure, mean there will not be enough to power the entire global shipping fleet.In an interview, Vincent Clerc, the chief executive of Maersk, said that the entire maritime sector was unlikely to ever be powered predominantly by methanol. But Maersk had no regrets about moving some of its fleet from fossil fuels to methanol now, then adopting new technologies as they become available, he said.“This marks a real systemic change for this sector,” Mr. Clerc said, gesturing toward the vessel piled high with 20-foot containers in front of him.Eric Leveridge, the climate campaign manager for Pacific Environment, said his group was glad that Maersk and other shipping companies were moving toward more sustainable fuels. But the organization is still concerned that “it is more for optics and that the impact is potentially being exaggerated,” he said.“When it comes down to it, even if there is this investment, there’s still a lot of heavy fuel oil ships on the water,” he said. More

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    Wheat Prices Remain High as Concern Grows About Black Sea Instability

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    As Black Sea-bound vessels clustered in the waters near Istanbul, wheat prices remained elevated on Thursday, up 13 percent since Monday, when Russia pulled out of a wartime agreement that had been considered critical to stabilizing global food prices.The termination of the deal, which had permitted Ukraine to safely export its grain through the Black Sea, could have significant long-term consequences for grain supplies, said Alexis Ellender, a global analyst at Kpler, a commodities analytics firm. Despite robust grain harvests from exporters including Brazil and Australia, prices could become volatile.“By not having Ukraine there as a supplier, we’re increasing the vulnerability of the global grain market to these shocks,” Mr. Ellender said. “In the short term, supplies are good, but longer term, if we get any more supply shocks, we’re more vulnerable in terms of the global market.”Another drought in Brazil, like in 2021, or a disruption to Australia’s barley and wheat crop caused by El Niño, could cause prices to soar, he said.Russian threats to attack commercial vessels heading to Ukrainian ports have stalled traffic in the area. Marine tracking data shows that ships that had been en route to the Black Sea are sitting in ports in Istanbul as they wait to see if an agreement could be hammered out.“They’re still deciding what they’re going to do,” he said. Some vessels could look to pick up shipments of grain from other parts of Europe.At the moment, a quick resolution looks unlikely. Russia bombarded the port city of Odesa with missiles and drones on Tuesday and Wednesday, after an apparent Ukrainian drone strike on a Russian bridge linking the occupied Crimean Peninsula to mainland Russia.The suspension of the deal between Russia and Ukraine also has implications for maritime insurers and shipowners, who will no longer have insurance coverage to travel to Ukrainian ports, said James Whitlam, a product director at Concirrus, a marine data and analytics platform. While the deal between Russia and Ukraine was in effect, ships were able to secure insurance coverage under a temporary agreement.“Insurance markets are now scrambling around trying to understand what exposure they have,” Mr. Whitlam said.Despite recent increases, grain prices are still lower than they were on the eve of Russia’s invasion of Ukraine in February 2022, partly because the end of the deal was expected, Mr. Ellender said. In addition, Ukrainian grain exports have recently been at reduced levels because of limited labor, with workers fighting the war, and limited fuel supplies and lost territory to Russia.Ukraine has also increased exports by truck, train and river barge.Ukraine is still likely to be able to export most of its wheat, corn, barley and sunflower seeds via alternative routes, said Rabobank, a Dutch bank, on Thursday. But this will put additional pressure on ports on the Danube River, which flows from the Black Forest in Germany to the Black Sea, and the cost of transport will become more expensive, and rail infrastructure will be at a higher risk of Russian attack, the note said.“The higher transport cost means that Ukrainian farmers may, quite possibly, reduce planted area in the future,” the note said.Ukraine is one of the leading exporters of grain and the leading global exporter of sunflower oil, and the deal had allowed Ukraine to restart the export of millions of tons of grain that dropped after the invasion.Ukraine has exported 32.9 million metric tons of grain and other agricultural products to 45 countries since the initiative began, according to United Nations data. Under the agreement, ships had been permitted to pass by Russian naval vessels that had blockaded Ukraine’s ports in the aftermath of Russia’s full-scale invasion.Soaring prices are expected to hit the poorest people in the world the hardest. Ukraine last year had supplied more than half of the World Food Program’s wheat grain sent to people in Afghanistan, Ethiopia, Kenya, Somalia, Sudan, and Yemen, according to the U.N. More

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    Looming UPS Strike Spurs Some Companies to Rethink Supply Chains

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    Businesses around the country are facing what could be the latest disruption to how they get their goods to their customers in a timely and affordable fashion.Kathryn Keeler and her husband, Stuart de Haaff, own an olive oil company in the hills of central California. The couple spend their days harvesting olives, bottling the oil, labeling the glass bottles and shipping them out, relying primarily on UPS to get their product to kitchens throughout the United States. They are far from alone. UPS handles about a fourth of packages shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index, many of them for small businesses like Ms. Keeler’s company, Rancho Azul y Oro.But with the labor contract between UPS and 325,000 of its workers expiring at the end of the month and a potential strike looming, business owners around the country are facing what could be the latest in a series of supply chain disruptions they have confronted since the start of the pandemic.Some are pre-emptively turning to FedEx, the next largest private carrier in the United States, or the Postal Service. Others are calling their third-party shippers — firms that work with the likes of UPS, FedEx and DHL to handle their clients’ shipping needs — to ensure that their packages can still get to their final destinations even if there is a strike.The logistical challenge is just one more burden on businesses that have been stretched thin over the past few years.“Maybe a larger business can withstand those types of situations,” Ms. Keeler said. But as small-business owners, she and her husband “don’t have a lot of extra time in our day to be on the phone with the post office or FedEx.”Since 2020, the pandemic has strained the global supply chain in a number of ways. E-commerce reached record levels as stuck-at-home Americans bought clothes, furniture, workout equipment and groceries online. Companies had to navigate Covid-related shutdowns at factories in China and Vietnam. There were worldwide delays when a large container ship got stuck in the Suez Canal, leading to containers piling up at the Port of Los Angeles. Those situations affected the way goods came into the United States.A UPS strike could hobble the way brands move their wares domestically.“This is something that affects us on our home turf, and how do we solve for that?” said Ron Robinson, the chief executive of BeautyStat Cosmetics, which uses UPS to ship its skin care products to retailers like Ulta and Macy’s.One strategy that his team will lean on is trying to bundle packages, sending as many as it can out at once, he said.Switching to another carrier is going to cost some companies.Ryan Culver, the chief executive of Platterful, a monthly charcuterie board subscription service, also uses UPS. Switching over to FedEx Express — necessary to ensure that the meats in his packages reach consumers in time — would cost about $5 to $10 more per delivery.Using FedEx to ship goods can sometimes be more costly for small businesses.Hunter Kerhart for The New York TimesTeri Johnson, the founder of Harlem Candle Company, received an email on June 26 from her third-party shipper about a potential UPS strike. It suggested she switch to FedEx. That will cost her about $2 extra for each candle shipped in the greater New York area. Sending her candles to California will cost even more.“We don’t really have a choice right now,” Ms. Johnson said.FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network could accommodate. “Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now,” the company said in a post on its website on Thursday.The Postal Service said in an emailed statement that it “has a strong network, and we have the capacity to deliver what is tendered to us.”Larger companies are relying on sophisticated backup plans that have been tested over the past few years. The pandemic and previous tariff trade wars pushed many major retailers with global supply chains to diversify the countries where their vendors are and the parcel carriers they use.“We’ve been focused on investing in a lot of transportation solutions that allow us to more nimbly move freight between carriers,” said Alexis DePree, the chief supply chain officer at Nordstrom. “We can do that with a lot more flexibility and speed than we were able to in the past.”Some third-party carriers are seeing a boost in their businesses as the possibility of a UPS strike comes into focus for their clients. Stord, a third-party logistics and technology provider based in Atlanta whose clients include apparel makers and consumer-package companies, has been sending emails out telling its clients not to worry. Stord uses a cloud-based platform to offer services like warehousing and fulfillment and handles tens of thousands of their packages a day.By combining the volume of its broad portfolio of client brands and using software to make decisions, Stord has the leverage to better negotiate prices with the large parcel carriers, said Sean Henry, the company’s chief executive.“We’ve been negotiating with FedEx and U.S.P.S. about rates around UPS so our customers don’t have to do that,” he said.Stord said more of its clients had asked it to negotiate with carriers on their behalf. He said that equated to “tens of millions of dollars of annual revenue” for his business.Still, some business owners are not letting the possibility of a UPS strike stress them out just yet.Bill McHenry, president of Widgeteer, which sells cookware to large retailers, said he felt “kind of numb” after navigating the pandemic-related challenges. “I’ve seen a lot of stuff and the stories that I’ve heard and things we’ve had to go through and survive — not just the pricing but the upheaval of thinking you have a container but don’t,” he said.He said the potential rail strike last December had been a bigger concern for him.In the meantime, the possibility that a deal could be reached between UPS and the union that represents its workers, the International Brotherhood of Teamsters, remains. The union announced on Wednesday that negotiations had broken down, after previously saying the sides had reached a tentative agreement. If an agreement is not reached, a strike could happen as early as Aug. 1.If that occurs, “we would be collateral damage,” Ms. Keeler said. More

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    Russia Sidesteps Western Punishments, With Help From Friends

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    A surge in trade by Russia’s neighbors and allies hints at one reason its economy remains so resilient after sweeping sanctions.WASHINGTON — A strange thing happened with smartphones in Armenia last summer.Shipments from other parts of the world into the tiny former Soviet republic began to balloon to more than 10 times the value of phone imports in previous months. At the same time, Armenia recorded an explosion in its exports of smartphones to a beleaguered ally: Russia.The trend, which was repeated for washing machines, computer chips and other products in a handful of other Asian countries last year, provides evidence of some of the new lifelines that are keeping the Russian economy afloat. Recent data show surges in trade for some of Russia’s neighbors and allies, suggesting that countries like Turkey, China, Belarus, Kazakhstan and Kyrgyzstan are stepping in to provide Russia with many of the products that Western countries have tried to cut off as punishment for Moscow’s invasion of Ukraine.Those sanctions — which include restrictions on Russia’s largest banks along with limits on the sale of technology that its military could use — are blocking access to a variety of products. Reports regularly filter out of Russia about consumers frustrated by high-priced or shoddy goods, ranging from milk and household appliances to computer software and medication, said Maria Snegovaya, a senior fellow for Russia and Eurasia at the Center for Strategic and International Studies, in an event at the think tank this month.Even so, Russian trade appears to have largely bounced back to where it was before the invasion of Ukraine last February. Analysts estimate that Russia’s imports may have already recovered to prewar levels, or will soon do so, depending on their models.In part, that could be because many nations have found Russia hard to quit. Recent research showed that fewer than 9 percent of companies based in the European Union and Group of 7 nations had divested one of their Russian subsidiaries. And maritime tracking firms have seen a surge in activity by shipping fleets that may be helping Russia to export its energy, apparently bypassing Western restrictions on those sales.While Western countries have not banned the shipment of consumer products like cellphones and washing machines to Russia, other sweeping penalties were expected to clamp down on its economy. They include a cap on the price that Russia can charge for its oil as well as restricted access to semiconductors and other critical technology.Companies like H&M halted operations in Russia after the invasion of Ukraine, but the economy has proved resilient.Maxim Shipenkov/EPA, via ShutterstockSome companies, including H&M, IBM, Volkswagen and Maersk, halted operations in Russia after the invasion, citing moral and logistical reasons. But the Russian economy has proved surprisingly resilient, raising questions about the efficacy of the West’s sanctions. Countries have had difficulty reducing their reliance on Russia for energy and other basic commodities, and the Russian central bank has managed to prop up the value of the ruble and keep financial markets stable.On Monday, the International Monetary Fund said it now expected the Russian economy to grow 0.3 percent this year, a sharp improvement from its previous estimate of a 2.3 percent contraction.The I.M.F. also said it expected Russian crude oil export volume to stay relatively strong under the current price cap, and Russian trade to continue being redirected to countries that had not imposed sanctions.Most container ships have stopped ferrying goods like phones, washing machines and car parts into the port of St. Petersburg. Instead, such products are being carried on trucks or trains from Belarus, China and Kazakhstan. Fesco, the Russian transport operator, has added new ships and new ports of call to a route with Turkey that transports Russian industrial goods and foreign appliances and electronics between Novorossiysk and Istanbul.Sergey Aleksashenko, former deputy minister of finance of the Russian Federation, said at an event this month that 2023 would be “a difficult year” for the Russian economy, but that there would be “no catastrophe, no collapse.”Some parts of the Russian economy are struggling, he said, pointing to car factories that shut down after being unable to secure parts from Germany, France, Japan and South Korea. But military expenditures and higher energy prices helped prop it up last year.“We may not say that Russian economy is in tatters, that it is destroyed, that Putin lacks funds to continue his war,” Mr. Aleksashenko said, referring to President Vladimir V. Putin. “No, it’s not true.”Russia stopped publishing trade data after its invasion of Ukraine. But analysts and economists can still draw conclusions about its trade patterns by adding up the commerce that other countries report with Russia.The International Monetary Fund said it expected Russian crude oil exports to stay relatively strong despite a Western price cap. Andrey Rudakov/BloombergMatthew Klein, an economics writer and a co-author of “Trade Wars Are Class Wars,” is one of the people drawing conclusions about this Russia-size hole in the global economy. According to his calculations, the value of global exports to Russia in November was just 15 percent below a monthly preinvasion average.Global exports to Russia most likely fully recovered in December, though many countries have not yet issued their trade data for the month, he said.“Most of that recovery has been driven overall by China and Turkey particularly,” Mr. Klein said.It’s unclear how much of this trade violates sanctions imposed by the United States and Europe, but the patterns are “suspicious,” he said. “It would be consistent with the idea that there are ways of trying to get around some of the sanctions.”Silverado Policy Accelerator, a Washington nonprofit, recently issued a similar analysis, estimating that the value of Russian imports from the rest of the world had exceeded prewar levels by September.One of the case studies in that report was the jump in Armenian smartphone sales. Andrew S. David, the senior director of research and analysis at Silverado, said the trends reflected how supply chains had shifted to continue providing Russia with goods.Samsung and Apple, previously major suppliers of Russian cellphones, pulled out of the Russian market after the invasion. Exports of popular Chinese phone brands, like Xiaomi, Realme and Honor, also initially dipped as companies struggled to understand and cope with new restrictions on sending technology or making international payments to Russia.But after an “adjustment period,” Chinese brands started to take off in Russia, Mr. David said. Overall Chinese exports to Russia reached a record high in December, helping to offset a steep drop in trade with Europe. Apple and Samsung phones also appeared to begin to find their way back to Russia, rerouted through friendly neighboring countries.“Armenia is certainly not the only one,” Mr. David said. “There’s a lot coming through central western Asia, Turkey and the former Soviet republics.”Shipments to Russia of other products, like passenger vehicles, have also rebounded. And China has increased exports of semiconductors to Russia, though Russia’s total chip imports remain below prewar levels.President Vladimir V. Putin at a military training facility in Russia. Military expenditures and higher energy prices helped prop up the Russian economy last year.Pool photo by Mikhail KlimentyevOne major open question is how effectively the Western price cap will hold down Russia’s oil revenue this year.The cap allows Russia to sell its oil globally using Western maritime insurance and financing as long as the price does not exceed $60 per barrel. That limit, which is essentially an exception to Group of 7 sanctions, is designed to keep oil flowing on global markets while limiting the Russian government’s revenue from it.Some analysts have suggested that Russia is finding ways around the effort by using ships that do not rely on Western insurance or financing.Ami Daniel, the chief executive of Windward, a maritime data company, said he had seen hundreds of instances in which people from countries like the United Arab Emirates, India, China, Pakistan, Indonesia and Malaysia bought vessels to try to set up what appeared to be a non-Western trading framework for Russia.“Basically, Russia has been gearing up toward being able to trade outside of the rule of law,” he said.Mr. Daniel said his firm had also seen a sharp uptick in shipping practices that appeared to be Russian efforts to contravene Western sanctions. They include transfers of Russian oil between ships far out at sea, in international waters that are not under the jurisdiction of any country’s navy, and attempts by ships to mask their activities by turning off satellite trackers that log their location or transmitting fake coordinates.Much of this activity had been taking place in the mid-Atlantic Ocean. But after media coverage of suspicious practices in this region, the hub moved south, off the coast of West Africa, Mr. Daniel said.“They’re exploding,” he said of deceptive shipping practices. “It’s happening at an industrial scale.”So far, the oil price cap appears to be accomplishing its goal of reducing the price that Russia can charge while keeping global supplies flowing. But it remains to be seen whether this shadow fleet of ships is big enough to allow Russia to buy and sell oil outside the cap, said Ben Cahill, a senior fellow at the Center for Strategic and International Studies, during a January panel discussion.“If that fleet is big enough for Russia to really operate outside the reach” of the Group of 7 countries, the cap probably “won’t have the kind of leverage that policymakers wanted,” Mr. Cahill said. “I think we should know within a couple of months.”Alan Rappeport More

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    Russia’s War on Ukraine Worsens Global Starvation

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    Moscow blocks most shipments from Ukraine, one of the world’s largest wheat producers, and its attacks on the country’s energy grid also disrupt the flow of food.ISTANBUL — Hulking ships carrying Ukrainian wheat and other grains are backed up along the Bosporus here in Istanbul as they await inspections before moving on to ports around the world.The number of ships sailing through this narrow strait, which connects Black Sea ports to wider waters, plummeted when Russia invaded Ukraine 10 months ago and imposed a naval blockade. Under diplomatic pressure, Moscow has begun allowing some vessels to pass, but it continues to restrict most shipments from Ukraine, which together with Russia once exported a quarter of the world’s wheat.And at the few Ukrainian ports that are operational, Russia’s missile and drone attacks on Ukraine’s energy grid periodically cripple the grain terminals where wheat and corn are loaded onto ships.An enduring global food crisis has become one of the farthest-reaching consequences of Russia’s war, contributing to widespread starvation, poverty and premature deaths.The United States and allies are struggling to reduce the damage. American officials are organizing efforts to help Ukrainian farmers get food out of their country through rail and road networks that connect to Eastern Europe and on barges traveling up the Danube River.But as deep winter sets in and Russia presses assaults on Ukraine’s infrastructure, the crisis is worsening. Food shortages are already being exacerbated by a drought in the Horn of Africa and unusually harsh weather in other parts of the world.The United Nations World Food Program estimates that more than 345 million people are suffering from or at risk of acute food insecurity, more than double the number from 2019.“We’re dealing now with a massive food insecurity crisis,” Antony J. Blinken, the U.S. secretary of state, said last month at a summit with African leaders in Washington. “It’s the product of a lot of things, as we all know,” he said, “including Russia’s aggression against Ukraine.”The food shortages and high prices are causing intense pain across Africa, Asia and the Americas. U.S. officials are especially worried about Afghanistan and Yemen, which have been ravaged by war. Egypt, Lebanon and other big food-importing nations are finding it difficult to pay their debts and other expenses because costs have surged. Even in wealthy countries like the United States and Britain, soaring inflation driven in part by the war’s disruptions has left poorer people without enough to eat.A line for food aid in Kabul. An enduring global food crisis has become one of the farthest-reaching consequences of Russia’s war.Agence France-Presse — Getty Images“By attacking Ukraine, the breadbasket of the world, Putin is attacking the world’s poor, spiking global hunger when people are already on the brink of famine,” said Samantha Power, the administrator of the United States Agency for International Development, or USAID.The State of the WarAerial Attacks: A deadly New Year’s Eve assault is the latest strike in Russia’s three-month campaign on Ukraine’s energy infrastructure, which analysts say is an effort to demoralize the Ukrainian population by plunging it into cold and darkness.A New Alliance: The United States is scrambling to stop Iran from producing drones, as officials believe the Middle Eastern nation is building a partnership with Russia.Hopes Dim for Peace Talks: Both Ukrainian and Russian officials say they are willing to discuss making peace, but their terms for sitting down at a negotiating table suggest otherwise.Clergymen or Spies?: To Ukraine’s security services, the Russian Orthodox Church poses a uniquely subversive threat — a trusted institution that is not only an incubator of pro-Russia sentiment but is also infiltrated by priests, monks and nuns who have aided Russia in the war.Ukrainians are likening the events to the Holodomor, when Joseph Stalin engineered a famine in Soviet-ruled Ukraine 90 years ago that killed millions.Mr. Blinken announced on Dec. 20 that the U.S. government would begin granting blanket exceptions to its economic sanctions programs worldwide to ensure that food aid and other assistance kept flowing. The action is intended to ensure that companies and organizations do not withhold assistance for fear of running afoul of U.S. sanctions.State Department officials said it was the most significant change to U.S. sanctions policy in years. The United Nations Security Council adopted a similar resolution on sanctions last month.But Russia’s intentional disruption of global food supplies poses an entirely different problem.Moscow has restricted its own exports, increasing costs elsewhere. Most important, it has stopped sales of fertilizer, needed by the world’s farmers. Before the war, Russia was the biggest exporter of fertilizer.Its hostilities in Ukraine have also had a major impact. From March to November, Ukraine exported an average of 3.5 million metric tons of grains and oilseeds per month, a steep drop from the five million to seven million metric tons per month it exported before the war began in February, according to data from the country’s Ministry of Agrarian Policy and Food.That number would be even lower if not for an agreement forged in July by the United Nations, Turkey, Russia and Ukraine, called the Black Sea Grain Initiative, in which Russia agreed to allow exports from three Ukrainian seaports.Russia continues to block seven of the 13 ports used by Ukraine. (Ukraine has 18 ports, but five are in Crimea, which Russia seized in 2014.) Besides the three on the Black Sea, three on the Danube are operational.The initial deal was only for four months but was extended in November for another four months. When Russia threatened to leave it in October, global food prices surged five to six percent, said Isobel Coleman, a deputy administrator at USAID.“The effects of this war are hugely, hugely disruptive,” she said. “Putin is pushing millions of people into poverty.”While increases in the price of food this past year have been particularly sharp in the Middle East, North Africa and South America, no region has been immune.“You’re looking at price increases of everything from 60 percent in the U.S. to 1900 percent in Sudan,” said Sara Menker, the chief executive of Gro Intelligence, a platform for climate and agriculture data that tracks food prices.Before the war, food prices had already climbed to their highest levels in over a decade because of pandemic disruptions in the supply chain and pervasive drought.The United States, Brazil and Argentina, key grain producers for the world, have experienced three consecutive years of drought. The level of the Mississippi River fell so much that the barges that carry American grain to ports were temporarily grounded.The weakening of many foreign currencies against the U.S. dollar has also forced some countries to buy less food on the international market than in years past.Russia attacked the port of Kherson, on Ukraine’s Black Sea coast, in November. Before the war, farmers shipped out 95 percent of the country’s wheat and grain exports through the Black Sea.Finbarr O’Reilly for The New York Times“There were a lot of structural issues, and then the war just made it that much worse,” Ms. Menker said.U.S. officials say the Russian military has deliberately targeted grain storage facilities in Ukraine, a potential war crime, and has destroyed wheat processing plants.Many farmers in Ukraine have gone to war or fled their land, and the infrastructure that processed and carried wheat and sunflower oil to foreign markets has broken down.At a farm 190 miles south of Kyiv, 40 of the 350 employees have enlisted in the army. And the farm is struggling with other shortages. Kees Huizinga, the Dutch co-owner, said Russia’s attacks on the energy grid have led to the shutdown of a plant that provides his farm and others with nitrogen fertilizer.Other fertilizer plants in Europe were forced to shut down or slow production last year as natural gas prices soared, a result of the war. Natural gas is critical for fertilizer production.“So this year’s harvest has already been reduced,” Mr. Huizinga said in November. “And if Russians continue like this, next year’s harvest might even be worse.”He added that transportation costs have risen sharply for farmers in Ukraine.Before the war, farmers shipped out 95 percent of the country’s wheat and grain exports through the Black Sea. Mr. Huizinga’s farm paid $23 to $24 per ton to transport its products to ports and onto ships. Now, the cost has more than doubled, he said. And an alternative route — by truck to Romania — costs $85 per ton.Mr. Huizinga said Russia’s compromise on Black Sea shipments has helped, but he suspects Moscow is hobbling operations by slowing inspections. Under the arrangement, each vessel leaving one of three Ukrainian ports on the Black Sea has to be inspected by joint teams of Ukrainian, Russian, Turkish and United Nations employees once the ship reaches Istanbul.The teams look for any unauthorized cargo or crew members, and vessels heading to Ukraine need to be empty of cargo, said Ismini Palla, a spokeswoman for the U.N. office overseeing the program.U.N. data shows that the rate of inspections has dropped in recent weeks. The parties agreed to deploy three teams each day, Ms. Palla said, adding that the United Nations has requested more.“We hope that this will change soon, so that the Ukrainian ports can operate again at higher capacity,” she said. “Ukrainian exports remain a vital element in combating global food insecurity.”Ms. Palla said the parties’ decision in November to extend the agreement contributed to a 2.8 percent drop in global wheat prices.Over the last six months, food prices have retreated from highs reached this spring, according to an index compiled by the United Nations. But they remain much higher than in previous years.An uncertainty for farmers this winter is the soaring price of fertilizer, one of their biggest costs.Farmers have passed on the higher cost by increasing the price of food products. And many farmers are using less fertilizer in their fields. That will result in lower crop yields in the coming seasons, pushing food prices higher.Subsistence farms, which produce nearly a third of the world’s food, are being hit even harder, Ms. Coleman said.Food rations were distributed in Sana, Yemen. The war in that country has left its people vulnerable to food insecurity.Yahya Arhab/EPA, via ShutterstockIn a communiqué issued at the close of their meeting in Bali, Indonesia, in November, leaders of the Group of 20 nations said they were deeply concerned by the challenges to global food security and pledged to support the international efforts to keep food supply chains functioning.“We need to strengthen trade cooperation, not weaken it,” Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said at the summit.The U.S. government spends about $2 billion per year on global food security, and it started a program called Feed the Future after the last big food crisis, in 2010, that now encompasses 20 countries.Since the start of the Ukraine war, the United States has provided more than $11 billion to address the food crisis. That includes a $100 million program called AGRI-Ukraine, which has helped about 13,000 farmers in Ukraine — 27 percent of the total — gain access to financing, technology, transportation, seeds, fertilizer, bags and mobile storage units, Ms. Coleman said.The efforts could help rebuild the country while alleviating the global food crisis — one-fifth of Ukraine’s economy is in the agriculture sector, and a fifth of the country’s labor force is connected to it.“It’s hugely important for Ukraine’s economy,” she said, “and for Ukraine’s economic survival.”Edward Wong More

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    If There Is a ‘Male Malaise’ With Work, Could One Answer Be at Sea?

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    Before dawn on a recent day in the port of Seattle, dense autumn fog hugged Puget Sound and ship-to-shore container cranes hovered over the docks like industrial sentinels. Under the dim glimmer of orange floodlights, the crew of the tugboat Millennium Falcon fired up her engines for a long day of towing oil barges and refueling a variety of large vessels, like container ships.The first thing to know about barges is that they don’t move themselves. They are propelled and guided by tugs like the Falcon, which is owned by Centerline Logistics, one of the largest U.S. transporters of marine petroleum. Such companies may not be household names, but the nation’s energy supply chain would have broken under the pandemic’s pressure without the steady presence of their fleets — and their crews.“We’re a floating gas station,” said Bowman Harvey, a director of operations at Centerline, as he stood aboard the Falcon, his neck tattoo of the Statue of Liberty pivoting from the base of his flannel whenever he gestured at a machine or busy colleague nearby. Demand is solid, he said, and the enterprise is profitable. The company’s client list, which includes Exxon Mobil and Maersk, the global shipping giant, is robust. But manning the fleet has become a struggle.Multiyear charter contracts for key lines of business — refueling ships, transporting fuel for refineries and general towing jobs — are locked in across all three coasts, plus Hawaii, Alaska and Puerto Rico, Mr. Harvey said. Yet as pandemic-related staffing shortages have eased in other industries, Centerline is still short on staff. “Hands down,” Mr. Harvey said, “our biggest challenge right now is finding crew.”Safely moving, loading and unloading oil at sea requires both simple and high-skill jobs that cannot be automated. And the labor supply issues in merchant marine transportation are emblematic of the conundrum seen in a variety of decently paying, male-heavy jobs in the trades.Overall Labor Force Participation Has Fallen Among Men

    Note: The overall labor force, as defined by the U.S. Bureau of Labor Statistics, includes all Americans age 16 and older who are classified as either working or actively looking for work.Source: U.S. Bureau of Labor Statistics By The New York TimesOver the past 50 years, male labor force participation, the share of men working or actively looking for work, has steadily fallen as female participation has climbed.Some scholars have a grim explanation for the trend. Nicholas Eberstadt, the conservative-leaning author of “Men Without Work,” argues that there has been a swell in men who are “inert, written off or discounted by society and, perhaps, all too often, even by themselves.” Others, like the Brookings Institution senior fellow Richard V. Reeves, put less emphasis on potential social pathologies but say a “male malaise” is hampering households and the economy.“Hands down, our biggest challenge right now is finding crew,” said Bowman Harvey, a director of operations at Centerline.Members of the Millennium Falcon crew.Centerline employees are among about 75,000 categorized by the Department of Labor as water transportation workers, a group in which men outnumber women five to one.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.October Jobs Report: U.S. employers continued to hire at a fast clip, adding 261,000 jobs in the 10th month of the year despite the Fed’s push to cool the economy.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.Disabled Workers: With Covid prompting more employers to consider remote arrangements, employment has soared among adults with disabilities.A Feast or Famine Career: America’s port truck drivers are a nearly-invisible yet crucial part of the global supply chain. And they are sinking into desperation.Though the gender split in the industry is more even for onshore office roles, workers and applicants for jobs on the water are predominantly male. Centerline says it has roughly 220 offshore crew members and about 35 openings. Captains and company managers agree that changing attitudes toward work among young men play a part in the labor shortage. But the strongest consensus opinion is that structural demographic shifts are against them. “We’re seeing a gray wave of retirement,” said Mr. Harvey, who is 38.Even though replacements are needed and, on the whole, lacking, there are new young recruits who are thriving, such as Noah Herrera Johnson, 19, who has joined Centerline as a cadet deckhand, an entry-level role.On a Thursday morning out in the harbor, Mr. Herrera Johnson deftly unknotted, flipped and refastened a series of sailing knots as the crew unmoored from a sister boat that was aiding the refueling of a Norwegian Cruise Line ship. A small crowd of curious cruise passengers peeked down as he bopped through the sequences and the sun’s glare began to pierce the fog, bouncing off the undulating waves.“I enjoy it a lot,” Mr. Herrera Johnson said of his work, as he sliced some meat in the galley later on. (Some kitchen work and cleaning are part of the gig and the fraternal ritual of paying dues.) “I get along with everyone — everyone has stories to tell,” he said. “And I was never good at school.”Mr. Herrera Johnson, who is Mexican American and whose mother is from Seattle, spent most of his life in Cabo San Lucas, in Baja California, until he moved back to the United States shortly after turning 18.Though entry-level roles aboard don’t require college credentials, new regulations have made at least briefly attending a vocational maritime academy a necessity for those who want to rise quickly up the crew ladder. Because he is interested in becoming a captain by his late 20s, he began a two-year program at the nearby Pacific Maritime Institute in March, and he earns course credits for work at Centerline between classes.Noah Herrera Johnson, left, preparing to throw a line to Andrew Nelson, right, as the Millennium Falcon docked in Seattle.Mr. Herrera Johnson, right, joined the Falcon crew as a cadet deckhand, an entry-level role.He got his “first tug” in May: an escapade from New Orleans through the Panama Canal to San Francisco, patched with some bad weather. “Two months, two long months — it was fun,” he said. “We had a few things going on. We lost steering a few times. But it was cool.”In short, the industry needs far more Noahs. Many Centerline employees have informally become part-time recruiters — handing out cards, encouraging seemingly capable young men who may be between jobs, undecided about college or disillusioned with the standard 9-to-5 existence to consider being a mariner instead.“When I’m trying to get friends or family members to come into the business,” Mr. Harvey said, “I make sure to remind them: Don’t think of this as a job, think of it as a lifestyle.”Internet connections aboard are common these days, and there is plenty of downtime for movies, TV, reading, cooking and joking around with sea mates. (On slow days, captains will sometimes do doughnuts in the water like victorious racecar drivers, turning the whole vessel into a Tilt-a-Whirl ride for the crew: sea legs required.)Of course, those leisurely moments punctuate days and nights of heaving lines, tying knots, making repairs, executing multiple refueling jobs and helping to navigate the tugboat: rain or shine, heat or heavy seas.It’s “an adventurous life,” Mr. Harvey said, one that he and others acknowledge has its pros and cons. Mariners in this sector — whether they are entry-level deckhands, midtier mates and engineers, or crew-leading tankermen and captains — are usually on duty at sea in tight quarters and bunk beds for a month or more.On the bright side, however, because of an “equal time” policy, full-time crew members are given roughly just as much time off for the same annual pay.“When I go home, you know, I’m taking essentially 35 days off,” said Capt. Ryan Buckhalter, 48, who’s been a mariner for 20 years. For many, it’s a refreshing work-life balance, he said: None of the nettlesome emails or nagging office politics in between shifts often faced by the average modern office worker trying to get ahead.Still, Captain Buckhalter, who has a wife and a young daughter, echoed other crew members when he admitted that the setup could also be “tough at times” for families, including his own.Capt. Ryan Buckhalter piloted the Millennium Falcon on Elliott Bay.A checklist in the wheelhouse of the tugboat.Crew members say they value knowing that their work, unlike more abstract service jobs, is essential to world trade. And average starting salaries for deckhand jobs are $55,000 a year (or about $26 an hour) and as high as $75,000 in places like the San Francisco area, with higher living costs.The company also offers low-cost health, vision and dental care for employees, and a 401(k) plan with a company match. So the chief executive, Matt Godden, said in an interview that he didn’t feel that wages or benefits were a central reason that his company and competitors with similar offerings had struggled to hire.“Right now a lot of companies are really hurting,” Captain Buckhalter said. “You kind of got a little gap here with the younger generation not really showing up.”If the labor market, like any other, operates by supply and demand, managers within the maritime industry say the supply side of the nation’s education and training system is also at fault: It has given priority to the digital over the physical economy, putting what are often called “the jobs of the future” over those society still needs.Mr. Harvey adds that his industry is also grappling with increased Coast Guard licensing requirements for skilled roles, like boat engineers or tankermen, who lead the loading and discharging of oil barges. The regulations help ensure physical and environmental safety standards, Mr. Harvey said, but reduce the already limited pool of adequately credentialed candidates.Women remain a rare sight aboard. Some captains make the case that this stems from hesitance toward a life of bunking and sharing a bathroom with a crop of guys at sea — a self-reinforcing dynamic that company officials say they are working to alleviate.“We actually do have women that work on the vessels!” said Kimberly Cartagena, the senior manager for marketing and public relations at Centerline. “Definitely not as much as men, but we do have a handful.”Several economists and industry analysts suggested in interviews that another way for companies like Centerline to add crew members would be to expand their digital presence and do social media outreach. Mr. Godden, Centerline’s chief executive, said he remained wary.“If you did something very simple, like you set up a TikTok account, and you sent somebody out every day to create varied little snippets, and you get viral videos of strong men pulling lines and big waves and big pieces of machinery,” Mr. Godden said, then a company would risk introducing an inefficient churn of young recruits who would “like the idea of being on a boat” but not be a fan of the unsexy “calluses” that come with the job.Crew members say they value knowing their work is essential to world trade. But in the long term, he said, there is reason for optimism. He pointed to the recent establishment of the Maritime High School, which opened a year ago just south of the Seattle-Tacoma airport with its first ninth-grade class.“I think their first class is looking to graduate a hundred people, and then they got goals of getting up to 300, 400 graduates a year,” Mr. Godden said. He has been meeting with the school’s leaders this fall and is convinced they will help create the next pipeline in the profession.“Yes, labor shortages may increase or decrease depending upon how the market works — but I always have this sense that there’s always going to be this sort of built-in group of folks who cannot — just cannot — stand seeing themselves sitting at a desk for 30, 40, 50 years,” he said. “It’s this hands-on business almost like, you know, when you’re a kid and you’re playing with trucks or toys, and then you get to do it in the life-size version.” More