Makoto WashizuPresident

Japan International Transport Institute

Seminar on the Problem of the Global Shortage of Seafarers and the role of the Shipping Industry through CSR activities11 May 2010

The growing shortage of seafarers has become an issue of global concern while the world economy has been grown rapidly.◦ 6% of shortfall of officers in 2015 was predicted (BIMCO/ISF MANPOWER 2005 UPDATE)

◦ Recent positive and negative factors to the demand for the world commercial fleets

Positive factor：the rapid increase in global cargo movement due to new emerging economies represented by BRICs

Negative factor：the decrease in global cargo movement by the global financial crisis in 2008

“Go to Sea Campaign!” launched by IMO in Nov. 2008◦ Addressing to the problem of the global shortage of seafarers as a part of the theme “2010: Year of the

Seafarer”

◦ Major issues addressed in the IMO’s Campaign document

There is the apparent reluctance on the part of young people to choose seafaring as a profession;

Carriers at sea of young seafarers are often short and they actively chose not remain at sea.

London, May 2010 2

Change between 2005 and 2010

A need for a study on prospect for world future Demand/Supply of seafarers reflecting the recent various changes in world economy

A need for collecting voices of students and maritime institutes and clarifying possible measures

Background

The purpose:◦ To obtain the prospect on world future Demand/Supply of seafarers in

2020 by reflecting the recent changes in the world economy and shipping industry (See the left box.);

◦ To propose possible measures to facilitate stakeholders to secure a quantity of quality seafarers by reflecting voices of students and faculty staff of maritime institutes. (See the right box.)

2. Possible measures

Survey on attraction of seafaring as a vocation

-Information from students of maritime institutes

Survey on actual situation of femaleseafarers

-Information from female students of and female graduates from maritime institutes)

The Purpose and Methods of this study

1. Prospect for world future D/S of seafarers

Grasping the actual situation onWorld economy and commercial fleets

Prospect for future D/S of seafarers towards 2020

Estimating the demandof seafarers in 2010

-The No. of world fleets-A backup ratio-Standard manning

Evaluating the supply of seafarers in 2010

-Information from Maritime Institutes-Evaluation on the transitions of wages

Predicting the demandof seafarers in 2020

-The growth rate of world fleets

Evaluating future supply of seafarers towards 2020

-Information from maritime institutes

96 

97 

98 

99 

100 

101 

102 

103 

104 

105 

106 

2002 2003 2004 2005 2006 2007 2008 2009 2010

Tonmile GDP

Since 2002◦ The world economy had been grown rapidly due to new emerging economies

such as BRICs;◦ The world commercial fleets have been enlarged led by large expansion in

maritime cargo movement due to great economic growth. After September 2008◦ The world economy fell down sharply triggered by the collapse of the

investment bank, Lehman Brothers

London, May 2010 4

※Values in 2002 => 100Tonmile: Review 2008, Fearnleys

GDP (constant price): IMF World Economics Outlook

Financial Crisis in 2008

Falling down sharplyOf the world economy

Rapid decrease in the maritimecargo movement

Recovering tothe level in2008

The world economy isrecovering due to newemerging economies

Recent changes in the world economy and its influence 1. Prospect for world future D/S of seafarers

Gro

wth

rate

London, May 2010 5

895  914  912  966 1,126 

1,335 1,512 

1,813 2,101 

2,799 

0 

500 

1,000 

1,500 

2,000 

2,500 

3,000 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

(s)

Rapid growth

(Note: Displaying 2,000GT and greater

Tanker, 9,517 

Bulk Carrier, 8,153 

Dry Cargo /Passenger, 17,953 

The number of the world commercial fleets

(as of the end of 2009)35,623

（#2,000GT and greater)

(Source: Lloyd’s Register – Fairplay, Oct 2009)

Since 2003, rapid increase of the number of ships completed.Many ships were completed even in 2009 when the world economy fell down sharply by the global financial crisis because the orders were made a few years before the completion date.

No. of ships completed from 2000 to 2009 (in operation only)

Influence to the world commercial fleets by the global financial crisis in 2008

1. Prospect for world future D/S of seafarers

Ship scrapping◦ The number of scrapped ships in 2009 was 947, but it is expected that this will

decrease in near future and settle down to the usual range of the number between 200 and 400 due to the rapid recovery of the world economy.

Cancellation of orders of new shipbuildings◦ Recently there are cancellations of ship orders scheduled to be completed on

and after 2011. Therefore the influence of cancellation for a few years’ term just after the global financial crisis in 2008 is slight.

Change in ship type◦ Change in ship type does not affect a total number of ships completed.Lay up◦ Not a cold lay up, but primarily warm lay-up with seafarers on board.Low speed operation◦ It could cause the decrease in efficiency of operation, but the number of ships in

operation is not changed by this substantially.

The influence was slight to the transition of the numberof the world fleets by these elements.

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Consideration on elements which might influence the transition of the world commercial fleets after the crisis

1. Prospect for world future D/S of seafarers

The supposed capacity of seafarers on each ship by ship type and ship size◦ Inclusion of only ships of 2,000GT and greater in order to limit to

ships used for international shipping as much as possible.◦ Classified into two classes:

1) 2,000～7,999 GT and 2) 8,000 GT and greater.◦ As for the class of 8,000 GT and greater, it was categorized into

seven classes by ship type.

The back-up ratio of seafarers was set at 50 %.The demand for seafarers in 2010 :◦ Officer： 445,055. Ratings： 648,914.

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Deck Engine Deck Engine Catering

4 4 4 4 2 18VLCC 5 5 6 7 3 26

LNG Tanker 5 6 8 8 3 30LPG/Chemical/Product Tanker 4 5 5 5 3 22

Other Tanker 4 5 5 5 3 22Bulk Carrier 4 4 5 5 3 21Container 4 5 5 6 3 23

Other Dry Cargo 4 4 5 5 3 21

2,000 - 7,999GT

8,000GTand over

Officer RatingShip Type Total

Officer 103,192 193,511 296,703 148,352 445,055Rating 128,990 303,619 432,609 216,305 648,914

Total 232,182 497,130 729,312 364,656 1,093,968

Total2,000-7,999GT8,000GTand over

SubtotalBack-up Ratio

(50%)

Calculation on the demand for seafarers in 20101. Prospect for world future D/S of seafarers

100 

110 

120 

130 

140 

150 

160 

170 

180 

2002 2003 2004 2005 2006 2007 2008 2009 2010

Croatia India Philippines

The balance of Demand/Supply for seafarers is reflected in the transitions of wages:◦ D/S is tight ⇒ The wages would increase up;◦ D/S is well balanced ⇒ The wages would remain flat.Recent trends in transition of wages of seafarers:◦ Rapidly increased up by 2008, but slightly decreased in 2009 and

going up again very slightly in2010.⇒Supply and Demand are sufficiently balanced for the

immediate future.

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Rapid increase D/S: relaxedWages: slightly

decreased

※2002＝100

Supply of seafarers in 20101. Prospect for world future D/S of seafarers

(Note1: Displaying ships of 2,000GT and greater)(Note2: The real value in 2002 is set as 100 for the

comparison purpose.) (Note3: The value in 2010 (an estimate) and values

before 2010 are based on interviews with some shipping companies.)

The annual average growth rate in number of the world commercial fleet towards 2020◦ To predict future annual average growth rate in number of the world

commercial fleets in the decade, taking into account the decrease in the world economic growth rate for this decade caused by the global financial crisis.

→to set the above future annual growth rate 0.7% of increase towards 2020, regardless of ship type and ship size.

London, May 2010 9In 2010：35,623 ships ⇒ in 2020：38,197 ships

Prospects for the world commercial fleets towards 20201. Prospect for world future D/S of seafarers

(Note: Including ships of 2000GT and greater)

Officers: 477,208. (=additional 32,153 of officers to the number in 2010.)Ratings: 695,795. (=additional 46,881 of ratings to the number in 2010.)

High potential on supply of seafarers◦ Maritime institutes could increase up their capacity of students in order

to respond to a possible increase in the demand for seafarers as necessary. (Based on views on future demand/supply from maritime institutes of India and Philippines.)

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445,055 460,851 

477,208 

648,914 671,946 

695,795 

400,000 

450,000 

500,000 

550,000 

600,000 

650,000 

700,000 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(S) Officer Rating

15,796（3.5%）

32,153（7.2%）

23,032（3.5%）

46,881（7.2%）

(Note1: Including ships of 2000GT and greater)(Note2: It is supposed that the number of the fleets would increase at the rate of 0.7% annually after 2010.)

Prospect for necessary global supply of seafarers to meet future estimated demand in 2020

1. Prospect for world future D/S of seafarers

Survey on students of Maritime Institutes◦ Survey by a questionnaire to students of 12 maritime institutes of the

world (6 countries) (India, Philippines, Croatia, Norway, Republic of Korea and Japan) (Totally 1026 students)

◦ Points of survey: Merits/demerits of seafaring, carrier planning, etc.Survey on Presidents/faculty staff of maritime institutes◦ Survey by a questionnaire to and interview with 7 maritime institutes of

the world (5 countries)(India, Philippines, Croatia, Republic of Korea and Japan)

◦ Points of survey:Questionnaire: Present situation and future prospects of maritime institutes;Interview: Future management plans including change of capacity of the institutes towards 2020, measures to secure the entrants to the institutes, etc.

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Survey on attraction of seafarers2. Possible measures to secure a quantity of quality seafarers

1. “Important to promote significance and attraction of seafaring and shipping industry from childhood.⇒ Promote importance of seafaring and shipping industry from

primary education period, etc.2. “Fewer opportunities for obtaining on board experience for

getting certificate of competence.”⇒ Introduction of national training ships, expansion of cadet

system, etc.3. “Many seafarers to hope to move to a land-based work.”

⇒ Improvement in working style and conditions of seafarers, etc.4. “Necessary to Improve in the image of seafaring in the public”

⇒ Avoiding unnecessary fanning up of negative information for seafarers such as piracy and accidents. Enhancement of dissemination of positive information such as good market conditions, etc.

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(Major comments/indications and possible measures)

The results of the survey on attraction of seafarers2. Possible measures to secure a quantity of quality seafarers

Very limited working places and positions on board for female seafarers:

Voices from female ex-seafarers:◦ A big gap tends to occur between female

seafarers’ dedication to work and actual duties entrusted by male seafarers because male seafarers became particularly conscious and careful about female seafarers.

Major results of the questionnaire to female students:◦ There is a high potential for the female students to become a supply source of seafarers

because a high ratio of female students hope to be employed by shipping companies and among them, to become seafarers.

◦ Compared with male students, a higher ratio of female students hoping to become seafarers are willing to move to a land-based work in the future.

Possible measures toward greater female participation:◦ Improvement of working situations for female seafarers （Ex. Manning to the types of ships

other than ferry and passenger ships, shortening of a term on board.）◦ Introduction of a support system for female seafarers （Ex. Introduction of day nursery

and/or a financial support for a baby-sitter by companies.)

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Ferry, 68% Cruise, 26%Cargo,6%

0% 20% 40% 60% 80% 100%

（Investigated by ILO in 2003)

Femal, 23,177 

Male, 374,521 

Officer, 345 Rating, 1,398 

Other(Hotel Servicesetc),

21,434 

Actual situations regarding female seafarers andpossible measures towards greater female participation

2. Possible measures to secure a quantity of quality seafarers

（Source: ITF Women Seafarers’ Meeting 2005）

London, May 2010 14

Thank you for your attention.