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A Comprehensive Deep Dive into Maritime Talent Acquisition for a Post-Pandemic World, Part 3

Last week we continued our three-part series on maritime talent acquisition by addressing changing demographics in the labor market and the importance of company culture to the next generation of seafarers. This week we wrap up our discussion and journey with a final segment on crew shortages, industry safety statistics, supply chain vulnerabilities, along with costs incurred for personnel turnover. Please join in the comments section to share with us your experiences. Without further ado, we present the final segment in our three-part series.

Crew Shortages, Safety, Supply Chain Vulnerability, & Tech Adoption

The maritime industry has historically been an older crowd, and it shows. The percentage of 55 years and older seafarers has been growing. As a benchmark, numbers show it was 4% in 2000 and 11% by 2015. The average age of a Master is held at 47 years old. Chief Engineer grew by two years to 49. Engine and Deck ratings increased by five and six years to 40 & 39, respectively. Deck and Engine Officers decreased by one year to 34 and 36, respectively. In contrast, offshore watchkeeping officers declined from 47 to 39 years of age.[1] Numbers that tell a compelling story of perhaps why the industry is so challenging to make a change.

As of May 2020, IHS Markit estimates 400,000 seafarers working on merchant cargo ships, 300,000 on cruise and passenger ships, and 200,000 on all other categories of vessels. From 2015 to 2019, a reported 310 killed and 467 missing seafarers (which equates to approximately a 0.012% chance of dying in this industry). According to the U.S. Bureau of Labor Statistics, the top 10 most dangerous & hazardous jobs in 2020 (when calculated on a fatality rate of a job based on the number of deaths per 100,000 full-time workers) lists commercial fishing as the 2nd most dangerous occupation. Per 100,000 workers, a fatality rate of 77.4 deaths occurs due to drowning, weather, collisions and shipwrecks, rogue waves, malfunctioning gear, slips, trips, and falls.[2] Not ideal statistics when attracting younger talent who now have more opportunities to stay safer with shoreside positions.

Carl Shou, CEO and president of Wilhelmsen Ship Management, stated that “The fallout effect of this pandemic has been very damaging for the future recruitment of seafarers.”[3] Said crisis could lead to a mass exodus of crews from sailing jobs to shoreside opportunities that would prevent seafarers from being stuck at sea again.

Rear Admiral (ret.) Peter Brady, Director General of the Maritime Authority of Jamaica, alerted that “if seafarers are not available to operate the ships, those vessels will simply lay alongside idle. Does the world need that now?” Certainly not. The Suez Canal’s blocking recently demonstrated the destructive impact that just one vessel can have by the 1,300 ft-long, 220,000-ton ship, Ever Given. The world’s just-in-time (JIT) supply chain network was stress-tested during the six (6) days it was wedged in the Suez. For reference, Lloyd’s List estimates that the 120-mile waterway sees $9 billion worth of goods, or $400 million per hour, pass through the Suez Canal each day.[4]

Stephen Flynn, professor of political science at Northeastern University, explains that “the disruption of a week of this size is going to continue to have cascading effects… it’s going to be at least 60 days before things get sorted out and appear to be a bit back to normal.”

The importance of having a reliable global supply chain cannot be overemphasized. It is the very reason that Spares CNX exists. Our goal, since day one, is to help maximize operational efficiencies through the digital transformation that ensures fleet readiness and optimization. Each one of us is directly affected by shipping’s vulnerability and reliability, which is why we are so passionate about serving this space.

Nevertheless, a compounding issue is the effect of having countless vessels unable to sail due to crew shortages or maintenance. This effect would have immeasurable consequences across the global JIT network. As a cautionary tale, the U.S. economy’s post-pandemic reopening has been further negatively impacted as millions of jobs are unfilled. This has prevented many businesses from reopening due to extended COVID-19 unemployment benefits. As a thought experiment, imagine the impact if the entire global fleet were laid up pier side, unable to sail because of crew shortages.

To address problems of attracting and retaining new crew, the rapid adoption and investment of technology should be considered. Technology adoption needs to be intuitive to operations, proliferate better workplace safety, and provides a smart user experience/user interface (UX/UI). Crews want to serve on Star Trek’s USS Enterprise and not a 1970s analog bulker. It will be far easier for companies to hire crews that get to serve on a vessel where the bridge or engine room looks like the inside of a Tesla.

Integrated bridges with voice commands, augmented reality projections on bridge windows, and advanced sensors that foster better decision-making are all existing technologies. As a result, shipping companies will significantly benefit from these investments. In addition, to get older crew members to comply with new procedures and policies, the integration of cutting-edge technology will allow for new systems and methods to be implemented.

Bottom Line

According to the 2021 U.S. Bureau of Labor Statics report, the annual turnover rate was 57.3 percent. With the cost of replacing individual employees ranging from one-half to two times the employee’s yearly salary (conservatively), this represents a $1 trillion problem in the U.S. alone. For example, a 100-person company with an average salary of $50,000 could experience an approximate financial liability of $1.4 million to $5.7 million per annum. Therefore, it may be far more cost-effective to invest in retaining current employees through increased salaries, financial empowerment, wellness programs, and personal development opportunities.

The above numbers demonstrate merely a financial burden –yet don’t account for the soft costs. For example, losing your best people means losing your reliable winners, constant innovators, and most effective problem solvers. Perhaps while thinking of these as costs, instead, we should see them as risk management measures. Fiduciary duty may require a paradigm shift to prevent a crewing timebomb from going off.

The most important questions will be: Can companies bridge this gap? Can they make seafarers trust their relationship with the employers that extend past the current contract? Will the adoption of cutting-edge technology lure the top minds and performers?

There is no easy path forward, as the maritime industry will have to work harder than ever to attract and retain young talent. Similar to professional sports teams, companies must find and recruit the best candidates before their rivals do. To keep the global fleet moving, maritime leadership will need to locate top talent, offer flexible individual working schedules (where possible), and competitive compensation packages. Additionally, to satisfy younger generations, they must demonstrate a company culture that reflects the overall need to impact social-environmental issues positively.

[1] Crewing demographic timebomb laid bare
[2] The Top 10 Most Dangerous & Hazardous Jobs in 2020
[3] Seafarer shortage warning post-pandemic
[4] The ship that blocked the Suez Canal may be free, but experts warn the supply chain impact could last months

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