Shipping’s Recovery Insufficient to Lift Seafarer Wages


Suppression of ship manning costs will continue despite a recovery in cargo shipping markets, with operators facing further financial challenges and the officer shortfall receding, according to the latest Manning report published by global shipping consultancy Drewry.

The lack of confidence in the industry has seen wages stay almost the same since 2009, with average officer rates sliding into reverse over the past year.

Drewry has also reported that the poor financial state of the industry has forced employers to limit labour costs to affordable levels.

Average global rates have risen by around 1% between 2016 and 2017, which is consistent with the trend of the past few years.

Both International Labour Organisation (ILO) and International Transport Workers’ Federation (ITF) base rates have remained unchanged in 2017.

However, seafarers are benefitting from a stronger US dollar, as most are paid in this currency.

Martin Dixon, Director of Research Products and editor of the report, 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.

“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.

Dixon added: “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.

“But we think that experienced officers for service on specialist vessel types such as gas carriers will continue to be in tight supply.”

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