Cost growth made a return to seafaring in 2018 and is expected to accelerate moderately. This is based on recovering vessel earnings and continued shortfall in officer numbers, according to the latest Manning Annual Review and Forecast report by Drewry.
Manning costs have increased in 2018 after many years of stagnation, as pressure in most cargo shipping markets has been reduced, allowing employers to lift wage levels, especially amongst the market-related officer ranks. As Drewry notes, the mean aggregate manning costs increased by about 1% in 2018 with both ratings and officer pay rising by the same margin.
The wage growth took place in spite of the reduction in officer numbers, which are retreating to more manageable levels. However, the shortage will continue for the foreseeable future, as longer leave and shorter tours of duty increase man-berth ratio requirements.
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In addition, Drewry foresees pressure on vessel operators’ costs to continue to lessen wage inflation. The International Transport Workers’ Federation (ITF) has not agreed new wage scales with employer organisations, effective from January 2019. Nevertheless, this will not lead to a notable rise in average salaries.
Finally, average manning costs will probably rise moderately over the next five years, with some acceleration expected at the end of the forecast period.
Better vessel earnings and competition for scarce officers certified to crew specialist ships will also increase wages in this period.
