Seafarers are warning of a growing humanitarian crisis aboard dozens of Australian coal-carrying vessels that are unable to dock in China, with shipping companies reportedly unable to pay importers to release the cargo.

In the second half of 2020, Chinese restrictions on coal imports from Australia – part of a wider trade dispute between the two nations – left vessels anchored in the Bohai Sea for months on end, unable to offload cargo, divert course or even change crews.

“It’s totally devastating,” says Gaurav Singh, a navigation officer aboard Anastasia, which has been unable to dock since leaving Australia’s Hay Point in July last year. “Everyone is in panic, physically and mentally exhausted without any hope,” he tells GTR.

Anastasia’s crew of 18, which comprises 16 Indian nationals, one Russian and one Filipino, are now entering their 21st consecutive month at sea.

An assessment by a UK-based psychiatrist, arranged by the vessel’s operator MSC Shipmanagement, concluded that “most of the crew are suffering from anxiety and depression issues”, Singh says.

One staff member has attempted suicide in recent weeks, he adds, while another dislocated his wrist and had to wait five days before Chinese authorities allowed him to receive medical attention.

Yet Anastasia is one of dozens of vessels in the same situation.

At the end of January, GTR was able to identify 45 vessels carrying Australian coal destined for China that had not made a port call since leaving Australia. Most departed Australia in September and October 2020, but some set sail as early as May.

The vast majority report their intended destination as the ports of Jingtang or Caofedian, though some are destined for Bayuquan, Dandong or others. The Australian ports of departure are Hay Point, Abbot Point, Newcastle and Gladstone.

A further 11 vessels are known to be carrying Australian coal, and have also been anchored in Chinese waters for weeks or months, but appear to have made a port call in the interim.


Impasse over stranded cargo

For a small number of those vessels, attempts at crew rescue have been successful.

Jag Anand’s crew spent more than six months anchored outside the port of Jingtang, but have since been reunited with their families after the vessel’s owner – Great Eastern Shipping, India’s largest private ship ownership company – brokered an agreement to allow a crew change.

Anastasia’s Singh says he believes a handful of other ships, including Topas, Knightship and Chiara D’Amato, have been permitted to change crews or have found an alternative buyer for the Australian coal aboard.

The issue, he says, is that importers in China “own the cargo, and only they have the right to sell their cargo to any buyers”.

Demurrage charges for non-delivery, paid by the shipping companies, are currently considered too expensive in most cases. Another complication is that diverting bulk cargo is logistically complex and would likely result in further costs.

“This is all because of commercial interest,” Singh says. “This is all business, and not a single company wants to bear losses. Our company said that the amount demanded by the importers is totally unreasonable.”

MSC Shipmanagement did not comment when approached by GTR, but issued a statement in January saying it has “repeatedly requested during the ship’s voyage that the seafarers onboard should be relieved to return home to their families”.

“These proposals have not yet been implemented by the chartering parties which determine the ship’s movements,” a spokesperson said at the time.

Despite talks with authorities in China and India, MSC says in a second January statement that no proposed solution has worked so far.

“MSC, as the technical operator of the ship, cannot simply order the master to deviate to a port for a crew change, as the vessel could be arrested as a result,” it says. “This would only perpetuate the problem and may result in the crew remaining onboard for even longer than necessary.”


Import data: a mixed picture

The situation for stranded seafarers is not helped by a lack of clarity over the extent of China’s restrictions on importing Australian coal.

By November last year, it had been widely reported that importers were under instruction to halt the purchase of coal from Australia – with numerous vessels already stranded – but there had been no public announcement from Beijing on the matter.

On December 13, the state-owned Global Times published an online article titled ‘Australia shut out of new China coal policy’, which appeared to confirm claims that restrictions were in place, but within days that article had been removed from the media outlet’s website.

Then-trade minister for Australia, Simon Birmingham, later cast doubt on the validity of the piece, saying: “I tend not to believe everything that I read in Chinese state-owned media.”

Vessel tracking data provided by Refinitiv to GTR shows a sharp drop in Australian coal exports to Australia in the last three months of 2020.

It calculates that just over 2.5 million tonnes was offloaded at Chinese ports in October, down from 6 million the previous month and from January and June highs of around 9.5 million.

The figures for November and December are 0.78 million and 0.67 million tonnes respectively, with Refinitiv estimating that as much as 7 million tonnes of coal remains stuck onboard vessels unable to dock.

However, Chinese customs data provided by Fitch Ratings list coal imports from Australia as zero in December.

It is not clear which figure is correct, but theoretically, it is possible a small amount of Australian coal may have been offloaded in China even while restrictions were in place, says Richard Lu, a senior analyst at business intelligence company CRU in Beijing.

It could be that annual quotas had not yet been exhausted, that some buyers had received special treatment from authorities, or that relief was granted to vessels that had been stranded at ports for so long, he suggests.

But ultimately, Lu says, the underlying reality “is unknown because of the nature of the obscure policy”.

Another point of confusion is why some Australian exporters were apparently still sending coal to China after details of the ban were widely reported. GTR has identified four vessels – Catharina Oldendorff, Ocean Happy, Great Glen and Okra – that departed Hay Point or Newcastle as recently as November 2020.

“I can’t understand why banks and insurers would be willing to finance or insure cargoes in November and December, except for the fact that the ban was only ‘formalised’ by a Chinese state-run media article in early December,” says Toby Hassall, lead analyst for Refinitiv’s global coal market research division, speaking to GTR.

“Even then it has not really been formalised by a statement by the Chinese authorities. So perhaps that is the only reason financiers have been willing to take any risk with these cargoes: the lack of a formal ban.”

GTR has not identified any vessel exporting Australian coal to China later than November 20.