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Seafarer salaries jump 10 – 15% but could level off in 2024

Photo: Danica Crewing Henrik Jensen, CEO of Danica Crewing
Henrik Jensen, managing director Danica Crewing
Seafarer salaries are rising by over 10% according to a survey by Danica Crewing but could level off in the coming year as container and bulker owners tighten their belts.

The result of the survey completed over 6,000 seafarers are being presented at Seatrade Maritime Crew Connect Global 2023 in Manila and showed that across all senior officer ranks salary increase of 10 – 15% regardless of nationality.

The top four ranks for dry bulk carriers saw particularly sharp rises despite the sector’s poor performance in terms of freight and charter rates in recent times. Speaking to Seatrade Maritime News on the sidelines of Seatrade Maritime Crew Connect Global 2023, Henrik Jensen CEO of Danica, attributed this partly to the rise in vetting services such as RightShip resulting in owners seeking senior officers capable of dealing with these requirements and executing their business model.

While wage increases of 10 – 15% may not sound that dramatic relative to inflation rates in double-digits in some countries Jensen noted that with salary payments primarily in US dollars many seafarers gain significantly in relative terms due to the exchange rate with the currency in their home country.

Overall Jensen believes the crewing market has tipped in the favour of seafarers.

“We are witnessing a wage spiral like we saw leading up to the previous financial crisis. The root cause for these wage increases is the combination of a general shortage of very competent seafarers and a better financial situation for most vessel owners which is making employers more generous with remuneration,” he explained. “And, with a surplus of job offers, seafarers can afford to be picky.”

Looking ahead though the huge fall off container shipping rates and continued depressed dry bulk shipping market could put a damper on seafarer wage rises in the coming year. “I think what you will see next for 2024 the likes of the container and bulker owners will be much more careful with costs,” Jensen told Seatrade Maritime News.

The switch to alternative fuels with dual-fuel methanol, ammonia and other fuel types is something that he sees a sliding process in terms of demand for seafarers with the relevant experience. A more immediate driver in terms of demand could be for seafarers with the required skills for operating vessels retrofitted with fuel saving devices.

“Of course, you need chief engineers who understand that game, so that's again maybe driving salaries up back up.” Owners who have trained seafarers for specific equipment will be keen to retain those crew encouraging them to offer higher wages.

While one side the survey paints a picture of seafarers in demand in the other it shockingly showed that 36% of crew had not been paid their salary on time, with 8% saying it was not paid in full. Some 23% of seafarers who responded to the Danica survey said they had experienced a shortage of food or drinking water during their recent voyages, while 24% had their contracts extended and did not go home on time.

Jensen attributes these numbers to their being two different types of owners – those who consider their crew as an asset, and some who just view their seafarers as a commodity.