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
Logistics Network Analysis
Logistics network monitoring is an important step in understanding what actually occurs throughout your supply chain.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
IAM, IoT and the Connected Supply Chain
There are three primary models of Identity and Access Management (IAM) technology that CTOs, CSOs, and Supply Chain executives are using to enhance their trading partner communities. While each leverages IAM and the IoT as core components only an “Outside-in” approach truly connects people, systems and things reliably and securely across the supply chain.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...