According to the latest Manning report published by Drewry, despite a recovery in cargo shipping markets, ship manning costs will remain suppressed as shipowners and operators continue to be financially challenged and the officer shortfall recedes.
The absence of assurance in the industry has seen compensation increase at the same rate since 2009, and over the past year average officer rates have fallen into contrary. Despite the fact that there is still a general deficit in officer numbers, this has reduced noticeably over the past year and the poor financial state of the industry has forced employers to limit labor expenses to affordable levels.
In the meantime, ratings salary rates have fared slightly better and Drewry estimates that average global charges have increased by around 1% between 2016 and 2017, which is constant with the trend of the past few years. Both International Labour Organisation (ILO) and International Transport Workers’ Federation (ITF) base rates have stayed untouched in 2017. Nevertheless, seafarers have been aided by a stronger US dollar, since majority are compensated with this currency.
“Since the fall in oil prices the demand for officers in the offshore sector has fallen and this has been a major factor in the softening of overall seafarer wage costs,” said Martin Dixon, Director of Research Products and editor of the report. “While some sectors, such as LNG that require officers with particular experience, will continue to see above-average wage rises, we expect the downward pressure on manning costs to prevail with below inflation increases anticipated over the next five years.”
Drewry estimates that the ongoing officer shortfall contracted by a third over the past year to 13,700, based on an assessment of the global shipping fleet encompassing all sectors except non-cargo carrying ship types, such as tugs and passenger ships, and smaller coaster vessels, such as oil tankers and bulk carriers of less than 10,000 dwt. By contrast, all assessments continually show a surplus of ratings.
“However, slowing fleet growth and a healthy supply of officers is expected to eliminate the officer shortage over the next five years with a small surplus anticipated for 2021,” added Dixon. “But we think that experienced officers for service on specialist vessel types such as gas carriers will continue to be in tight supply.” SOURCE: Drewry