A shortage of officers on ships is forecast to worsen and risks impacting carrier profitability, according to Drewry’s recently published Manning 2014
"Owners and managers need seafarers, and they want experience, expertise and quality. However, they do not have the resources to fund substantial rises in remuneration. In recent years, owners and managers have been heavily cost-focused, as weak freight-rate earnings have yielded poor returns. Manning has become the natural target for cost cutting," said London-based Drewry.
Drewry estimates the current officer supply to be 610,000, representing a shortfall of 19,000 personnel. This shortfall is forecast to rise to 21,700 by 2018 given that there will be a requirement for an additional 38,500 officers by this time.
“While ratings (crew) remuneration packages tend to follow International Transport Workers Federation (ITF) standard terms, officer earnings are more market driven,” explained Drewry’s managing director, Nigel Gardiner. “Manning costs look set to come under renewed upward pressure, putting a further squeeze on profitability unless owners are able to push freight rates higher.”
Drewry said there is less supply pressure with members of the crews that are not officers.
"This will have a moderating influence on wage negotiations currently underway between the ITF and International Bargaining Forum, which represents employers. The other factor in owners’ favor is that most seafarers are paid in U.S. dollars. When converted to domestic currency, seafarer earnings tend to compare well with other occupations," it explained.
“But the shortage of officers remains, especially among senior engineering ranks and for specialist ships such as LNG carriers,” warned Gardiner. “There is also a general drift towards shorter working tours and increased benefits which is putting further pressure on supply.”
The International Bargaining Forum is the mechanism by which a group called the International Maritime Employer's Council
negotiates on behalf of its members with seafarer unions. The IMEC represents 180 shipping companies that operate 9,70 vessels and employ 210,000 seafarers.
Last week, the ITF announced that seafarers working on ships owned by members of the IBF Joint Negotiating Group will receive a 6.5-percent pay increase over the next three years.