London, UK, 15 June 2022 – Seafarer wage rates are expected to accelerate amid a worsening imbalance between the supply of and demand for officers. According to Drewry’s latest Manning Annual Review and Forecast report, sustained fleet growth will lead to the largest officer shortfall for the world’s merchant fleet in over a decade by 2027, with significant implications for recruitment and future manning cost inflation.

The current global officer shortage is estimated at around 5% of the total officer pool, which is broadly manageable for vessel operators in practical terms. However, there is heightened risk that the Russia-Ukraine conflict could further restrict the supply of officers.

Looking ahead to 2027, the supply-demand gap is expected to widen to a deficit of more than 8% of the global officer pool. This comes despite a slight anticipated increase in supply growth as training rates improve, with Covid-related restrictions having become far less significant. While the supply of ratings has also slowed, this is of less concern to employers, as it remains generally responsive to rising demand as the global fleet expands.

“Recruiting and retaining quality officers with experience on sophisticated vessel types is likely to be the first pressure point in a tightening supply pool,” said Rhett Harris, Head of Manning Research at Drewry. “Employers need to ensure that a career at sea is an attractive career option for ambitious and well-educated people.”

Global consumer price inflation is forecast to exceed 7% in 2022 before easing to around 3% over the forecast period to 2027. In response, seafarer wage rates are expected to increase by around 2.5% annually on average, up from approximately 1.5% in 2022. However, higher volatility is expected across ranks, nationalities, and vessel types outside these averages.

“Accelerating manning costs are being driven by inflationary macroeconomic pressures and rising officer shortfall,” added Harris. “Together with higher insurance and supply chain costs, these pressures will further fuel higher vessel operating costs over the medium term.”