Escalating skills shortages cut into carrier profits

A growing shortage of trained seafarers – particularly officers – will compromise carrier profitability, according to the Manning 2014 Annual Report published by Drewry Maritime Research last week. The report covers trends in seafarer availability, wages, and officer demand. The report points out that 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 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. The current officer supply is around 610 000, which leaves a shortfall of 19 000 personnel, Drewry reports. The shortfall is predicted to grow to 21 700 by 2018 since an additional 38 500 officers will be needed by then. “While crew remuneration packages tend to follow International Transport Workers Federation (ITF) standard terms, officer earnings are more market driven,” said Drewry managing director for maritime research, 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.”