Drewry: Shipping’s Recovery Not Enough to Lift Seafarer Wage Costs
Ship manning costs are set to remain suppressed despite a recovery in cargo shipping markets, as shipowners and operators continue their financial struggles while officer shortfall recedes, shipping consultancy Drewry said.
The lack of confidence in the industry has seen wage increases almost at a standstill since 2009, and over the past year average officer rates have slid into reverse.
While there remains an overall shortfall in officer numbers, this has reduced markedly over the past year and the poor financial state of the industry has forced employers to limit labour costs to affordable levels.
“Ratings wage levels have fared little better and we estimate that average global rates have risen by around 1% between 2016 and 2017, which is consistent with the trend of the past few years,” Drewry said.
“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,” Martin Dixon, Director of Research Products, said.
“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.”
Dixon believes that the slowing fleet growth and a healthy supply of officers would eliminate the officer shortage over the next five years with a small surplus anticipated for 2021. However, experienced officers for service on specialist vessel types such as gas carriers “will continue to be in tight supply.”