Navigating a crisis in the making
By John Ioannou
‘Where have all the seafarers gone?’ is a familiar lament heard in the crewing departments of ship management companies all around the world.
The Baltic and International Marine Council (BIMCO), the world’s largest shipping trade organisation estimates there are around 1.8 million seafarers currently active globally across 74,000 vessels.
Yet in Limassol, one of the world’s largest third-party crew management hubs, firms are constantly searching for qualified seafarers. As a thriving maritime hub, Cyprus is keen for young people to choose a career at sea and a small cluster of maritime academies on the island have now expanded to Greece.
During the recent inauguration of the Cyprus-affiliated Merchant Marine Academy of Chios, Deputy Minister of Shipping Marina Hadjimanolis once again stressed the government’s commitment: “Our support to maritime professions, through actions and encouraging young people to love the sea, is a given,” she said, emphasising that seafarers are the backbone of global shipping.
Despite these efforts, seafaring remains largely unattractive to young people in developed nations like Cyprus. The long months away from home, tough working conditions and the constant threat of criminalisation and abandonment make the profession undesirable for all but the most passionate. Many students enter maritime academies intending to work ashore in local ship management and those who do sail often quit after just a few contracts.
The Covid pandemic only reinforced the idea that seafaring is a difficult, dangerous and undervalued job. Crews worldwide were stuck on board for months beyond their contracts, with no hope of relief. The “no-jab, no-job” policies imposed by employers and regulators left many seafarers feeling like hostages, deprived of autonomy.
Exhausted and disillusioned, many left the industry. The ensuing Russia-Ukraine war drained even more skilled crew out of the market, while in the background, a large demographic of older seafarers with hard-earned skills and experience continued to retire.
Attempts to reverse the decline in wealthier nations have yet to bear fruit. Greece has declared 2024 the year of naval education to encourage young people to go to sea. Yet, during the Seatrade Maritime Crew Connect Global 2023 conference, over 57 per cent of senior shipping executives surveyed said they would not encourage their children to go to sea due to the poor working and living conditions. Efforts at gender diversification have also stalled, with women making up less than 2 per cent of the seagoing workforce. Although this untapped source could help, the numbers of female seafarers on cargo vessels remain too low to compensate for shortages.
And yet, this is only half the story.
Despite the difficulties, disillusionment and danger, global seafarer supply is actually increasing as poorer countries build crew pools they hope will become sources of valuable foreign currency remittances. The emergence of India, China and now Africa as crew supplying regions has – in terms of sheer numbers – easily compensated for shrinking seafarer numbers in richer nations. This is demonstrated by on-the-ground deployments, as even maturing markets like the Philippines enjoyed a banner year during 2023, deploying an all-time high of 578,626 seafarers as per the Filipino Department of Migrant Workers.
However, the market is imbalanced. Drewry Consultants’ 2023 Manning Annual Review and Forecast highlights a 9 per cent shortage of skilled officers globally, up from 5 per cent in 2022 – the highest level since Drewry began analysing the market 17 years ago. The rapid growth of the global fleet has worsened the situation, driving officer salaries up by 10-15 per cent through 2023, according to a Danica shipping survey of over 6,000 seafarers.
The International Chamber of Shipping (ICS) and BIMCO’s industry-renowned Seafarer Workforce Report also builds on themes of officer shortages that go back 30 years, describing a 12 per cent rise in officer demand since 2015 with a shortfall of more than 26,000 officers expected by 2026.
Contrast this with only a 1 per cent increase in the demand for ratings and supply begins to resemble a pyramid with tighter constraints the higher we go: at the base are plentiful ratings and cadets, in the middle are lower ranked officers and at the peak are experienced senior officers in short supply. Although the Seafarer Workforce Report is well regarded, it should be noted that the ICS and BIMCO are trade associations that are keen to keep seafarer labour pools well-stocked and their focus on pure statistical analysis often overlooks the broader economic, geopolitical and technological forces that drive changes in the crewing market. To illustrate, the 2005 report predicted an alarming shortage of officers that never fully materialised due to the crash of 2008.
Similarly, 2010’s analysis also reported acute shortages even though shipping was in the middle of its worst crisis in living memory. Moreover, the oil bust of 2014 created high unemployment for offshore crews, and while things have been better since, the recent dip in oil and gas prices and the push toward decarbonisation means day rates for these positions are again falling.
Likewise, officers on cruise ships have recently struggled to find work as the residual effects of the pandemic linger and the environmental backlash against the sector grows.
Automation also looms large on the horizon. AI and other technologies may soon revolutionise shipping, reducing the need for crew. Commercial incentives are strong: crew salaries comprise 50 per cent of a ship’s operating expenses, while human error is responsible for over 80 per cent of serious incidents.
Already, radio officers have been replaced by the Global Maritime Distress and Safety System (GMDSS) and engine crew numbers have been reduced by automation.
Demand for crew is cyclical, shaped by market forces and geopolitical events. While managers bemoan shortages, many invest little in solutions, such as larger crew contingents or improved working conditions. The International Transport Workers Federation (ITF) recently identified under-manning and violations of work and rest hours as key causes of exhaustion, particularly for senior officers. Fatigue and stress correlate directly with accidents and near-misses, creating a vicious cycle that makes seafaring even less attractive.
Ship managers are also notoriously demanding and risk averse when sourcing officers from the open market. Operating in earth’s most hostile environment, they want to extract maximum value when hiring those responsible for the safety and profitability of their huge seagoing investments. As such, even qualified candidates must jump through many hoops like multiple interviews, on-site assessments and extensive psychometric testing before final approval from Marine and Technical Superintendents who may still raise objections to anyone less-than-perfect that might compound the difficulty of their own jobs. This leads to stagnation in the market, with many officers reluctant to risk a move, even if it means promotion or better pay.
Despite the hardships, there will never be a shortage of seafarers, most of them from poorer countries, willing to take risks for better opportunities. The challenge is how to channel and develop these vast pools of labour into a stable and productive seagoing workforce. The solution may be part regulatory, part market driven. Regulators could enforce larger crew contingents as proposed by the ITF, who have long pushed for flag states to set the number of crew required for each vessel’s optimal operation and not just the minimum safe manning as is currently in force. Increasing crew contingents, even by a few cadets or ratings, has a huge positive effect, minimizing fatigue and accidents and improving earnings with swifter port turnarounds and better vessel maintenance.
Regulators must also look into skill transfer between vessel types, so that seafarers can shift sectors during downturns. For example, the offshore bust in 2014 left many officers unemployed, but the undermanned tanker market could not absorb them as the skills required in each sector are quite different.
Industry driven initiatives should include in-house cadet programmes where ship managers can build up pools of home-grown crew. This is a proven strategy that pays dividends and is surprisingly inexpensive.
A cadet can be employed for as little as $15 a day and promoted into an officer rank in as little as two years, yet many firms will not hire cadets unless mandated by their tonnage tax requirements.
Living and working conditions should also be honestly appraised. Shorter contracts, better planning rotations that allow for more family time and improved facilities like catering, accommodation and connectivity must be the norm and not the exception.
For now, crew imbalances will continue, with skilled officers at a premium and cadets from poorer nations struggling to find work. Maritime hubs like Limassol will also feel the strain, as as fewer graduates bring shipboard skills to shore-based roles.
At sea, exhaustion, isolation and stress will continue, leading many experienced seafarers to exit the profession. Unless these systemic issues are addressed with a holistic approach that goes beyond the alarmism of trade bodies and the platitudes of government officials, we risk an inflection point where the safety and reliability of the global supply chain is seriously compromised. But by then we will count a far greater cost, not least the further disillusionment and exhaustion of those who work at sea. As was proven yet again during the pandemic, the world’s seafarers are indeed the invisible workforce, rarely appreciated but greatly relied upon to keep our food, medicine and energy flowing.
Surely they deserve much better.
John Ioannou is a Senior HR and Crew Management Consultant based in Limassol
