Thursday, June 12, 2014
Drewry: Growing officer shortage to impact carriers' bottom line
The shortage of mariners in the officer corps is expected to escalate, affecting carrier profitability, according to the Manning 2014 Annual Report published by Drewry Maritime Research. The report covers trends in seafarer availability, wages, and officer demand.
Drewry reports owners and managers need trained, experienced seafarers, but don't have the money to fund substantial rises in pay due to years of weak freight rate rates and vessel overcapacity.
Manning the vessels has become a natural go-to item for cost cutting in the industry, since it's the largest single element in ship operating costs, and officer recruitment is likewise impacted, the report said.
Drewry notes the current officer supply is around 610,000, which leaves a shortfall of 19,000 personnel. The shortfall is predicted to grow to 21,700 by 2018 since an additional 38,500 officers will be needed by then.
"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."
The report asserts there is less supply pressure with ratings and this will have a moderating influence on wage negotiations that are underway between the ITF and International Bargaining Forum, which represents employers.
Another factor in owners' favor is that most seafarers are paid in U.S. dollars, which make seafarer salaries look good to compared with other occupations.
"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."
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