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September 07, 2017

Seafarers unlikely to benefit from shipping's recovery says 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, according to the latest Manning report published by global shipping consultancy Drewry.

Drewry says 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.

Meanwhile, ratings wage levels have fared little better and Drewry estimates that average global rates have risen by around 1% between 2016 and 2017, which, it says, 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 have been helped by a stronger US dollar, as most are paid in 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."

Source: Drewry