Ocean cargo carriers face another challenge: manning vessels

The current shortage of officer corps seafarers is forecast to worsen and risks impacting ocean cargo carrier profitability, according to Drewry’s recently published Manning 2014 Annual Report.

By ·

The current shortage of officer corps seafarers is forecast to worsen and risks impacting ocean cargo carrier profitability, according to Drewry’s recently published Manning 2014 Annual Report.

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, being the single largest element in ship operating costs, with officer recruitment being directed towards the lowest cost source.

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,” says 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.”

However, there is less supply pressure with ratings and 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.

“But the shortage of officers remains, especially among senior engineering ranks and for specialist ships such as LNG carriers,” warns Gardiner. “There is also a general drift towards shorter working tours and increased benefits which is putting further pressure on supply.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Increase Efficiency and Profits with Smarter Logistics Planning
Optimize your fleet by maximizing capacity and reducing empty miles
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...