Jun.17--A shortage of seafarers in the officer corps is expected to worsen, threatening carriers’ bottom lines, according to Drewry’s recently published Manning 2014 Annual Report.

　　Drewry said shipowners and managers need experienced mariners, but do not have the resources to fund substantial rises in wages because of weak freight rates caused by overcapacity.

　　“Manning has become the natural target for cost cutting, being the single largest element in ship operating costs, with officer recruitment being directed towards the lowest-cost source,” the report said.

　　Drewry estimates the current officer supply to be 610,000, representing a shortfall of 19,000 personnel. This shortfall is forecast to rise to 21,700 by 2018, given that there will be a requirement for an additional 38,500 officers by this time, according to the report.

　　“While ratings (crew) remuneration packages tend to follow International Transport Workers Federation standard terms, officer earnings are more market driven,” said Nigel Gardiner, Drewry’s managing director. “Manning costs look set to come under renewed upward pressure, putting a further squeeze on profitability unless owners are able to push freight rates higher,”

　　Esben Christensen, director of AlixPartners, said in a conference call with Stifel Transportation & Logistics Research Group last month that ocean freight rates are about 25 percent below where carriers need them to be to make money as a result of industry oversupply. Total industry capacity has risen to 16.9 million TEUs in 2013 from 10.9 million TEUs in 2007, according to AlixPartners, and the global fleet is set to increase another 5.6 percent this year, according to a recent Alphaliner newsletter.

　　“Carrier health is worse than it was in 2009 and has deteriorated since 2010, as debt load has increased due to [capital expenditure] related to newer vessels,” Christensen said.

　　However, Drewry said one factor in owners’ favor is that most seafarers are paid in U.S. dollars, so their earnings tend to compare well with other occupations when converted to their domestic currencies.

　　“But the shortage of officers remains, especially among senior engineering ranks and for specialist ships such as LNG carriers,” Gardiner said. “There is also a general drift towards shorter working tours and increased benefits which is putting further pressure on supply.”