Thomas A. Kazakos: The sector needs to upskill and reskill Cyprus shipping staff

According to Thomas A. Kazakos, Director-General of the Cyprus Shipping Chamber, the global maritime industry is currently undergoing a digital revolution, while endeavouring to minimise the impact of geopolitical tensions.

As he tells GOLD, the Cyprus shipping sector needs to upskill and reskill seafarers and shore-based staff while striving to attract more shipowners, ship managers and charterers to the island.

This year marks the 35th anniversary of the Cyprus Shipping Chamber. What are some of its key achievements in supporting the local maritime sector?

The Cyprus Shipping Chamber was established in 1989 as the trade association of the shipping industry in Cyprus, with the main purpose of promoting the interests of Cyprus shipping and further the reputation of the Cyprus flag, whilst promoting and protecting the interests of its members, nationally and internationally. In this respect, the Chamber became the single voice of individual shipping companies, which would spend time, resources and expertise on assisting the Government to resolve shipping-related operational problems, improve the image and maintain the competitiveness of Cyprus shipping.

Key achievements include collaborating with the Maritime Administration in the late 1990s to introduce measures that helped the Cyprus flag achieve a prominent position on the ‘White List’ of all regional MOUs on Port State Control before the country joined the European Union.

Additionally, the Chamber contributed to the accession of Cyprus to the EU in 2004, through the seamless transposition of the relevant shipping aquis into national law, as well as the subsequent approval by the European Commission of the island’s specialised Shipping Taxation System in 2010 and 2019, which gave financial certainty to shipping companies and maintained the competitiveness of Cyprus as a major shipping centre.

Lastly, the Chamber has been instrumental in the upgrading of the Maritime Administration by promoting the creation, in 2018, of the Deputy Ministry of Shipping. The Chamber will continue to work closely with the Government, the House of Representatives, political parties and other industry bodies as necessary to maintain the image and competitiveness of the Cyprus shipping industry.

The digitalisation of the maritime industry is progressing rapidly. What impact will a future automated shipping industry have on seafarer and shore-based staff training?

The maritime industry is going through a significant transformation as automation technologies revolutionise the way operations are conducted. The advent of automated shipping will certainly affect both seafaring and shore-based staff training in several ways.

Rapid technological changes and digital transformation challenge future-proof skills for maritime developments, resulting in a substantial need for upskilling and reskilling. Training institutions and employers will need to invest in these programmes to ensure a skilled workforce.

Seafarers and shore-based staff will need specialised training in operating and maintaining automated systems. This may involve understanding advanced technologies such as Artificial Intelligence, machine learning, robotics and autonomous navigation systems.

Skills related to computer programming, cybersecurity, troubleshooting automated systems and data analytics will become more critical. Continuous learning and adaptation will be essential to stay abreast of advancements in the field and to ensure the safe and efficient operation of automated ships.

Geopolitical tensions in Ukraine and the Middle East have disrupted trading routes and affected energy demand and costs. How do you expect this turmoil to rearrange the maritime industry’s current agenda?

Past experience has shown that any disruption to maritime trade can have a profound impact on the global economy.

The latest potential flashpoints are Ukraine and the Red Sea, where de-escalation does not appear to be imminent and could have yet another increased negative economic impact, hampering vital trade routes, lengthening transit times, affecting decarbonisation efforts and resulting in production delays and higher inflation.

Shipping traffic in the Black Sea is limited and the Red Sea is still largely being avoided, with fewer daily transits due to the elevated risks for seafarers, cargoes and ships. As a result, insurance risk premiums have gone up. As such, trade has become increasingly politicised and shipping is caught in the middle of all this!

Higher oil prices already reflect these tensions, which could easily lead to supply concerns should the situation further escalate. Given the global nature of the oil market, all regions would be affected by higher oil prices. For the tanker shipping market, this means yet another headache that it could do without, after sanctions on Russia led to significant shifts in oil trade patterns and much more sea mileage.

This creates a ‘ripple-effect’ which translates into higher greenhouse gas (GHG) emissions as ships have to travel greater distances and faster to compensate for the detours. Increased CO₂ emissions are a direct consequence, at least for the foreseeable future. Current geopolitical tensions could also significantly slow down the shipping industry’s decarbonisation efforts and, in the long term, might significantly disrupt or render unattainable the IMO’s intermediate targets.

These rather negative developments are really testing the supply chain but all stakeholders are expected to find innovative ways to keep the industry wheels turning. Digitalisation will be one of the solutions. Amid continuous geopolitical tensions, supply chain turbulence is a significant issue that requires a joint effort and attention. Artificial Intelligence (AI) will be the catalyst in ‘minding that gap’ and taking alternative routing decisions when there are supply chain bottlenecks.

Today, Cyprus has the 11th largest merchant fleet globally and the 3rd largest fleet in the European Union with more than 2,200 ocean-going vessels totaling 21 million gross tons. Could Cyprus become number one and the backbone of EU shipping?

The aim remains for the Cyprus Registry and the Cyprus shipping industry to make steady progress and increase the number of ships registered under the Cyprus flag and of those being operated/managed from Cyprus.

To achieve this highly ambitious target, there is an absolute need for the tax and operational framework of the shipping industry in Cyprus to remain intact and, if possible, to become even more competitive, primarily to maintain the current numbers and secondly to attract new, high-quality shipowners, ship managers and charterers to the island.

This can only be achieved via close cooperation and mutual trust between the private and public sectors locally, especially between the Deputy Ministry of Shipping, the Ministries of Finance and Labour and the Cyprus Shipping Chamber and other relevant stakeholders.

Clear evidence of the success of such cooperation was the European Commission’s approval of Cyprus’ specialised – and very competitive – Shipping Taxation system following the country’s EU accession.

This interview first appeared in the May edition of GOLD magazine. Click here to view it.