Memorandum submitted by the Department
of Maritime Studies and International Transport of Cardiff University
THE FUTURE OF THE UK SHIPPING INDUSTRY
A study undertaken by Cardiff University during
1995 and 1996
investigated the UK economy's requirements for people with seafaring
experience to fill shore based jobs. This memorandum updates some
of the findings of that study. In doing so, it takes account of
subsequent research at Cardiff
and the findings of a recently published study by London Guildhall
The memorandum thus only addresses one of the terms of reference
on which the Transport Sub-Committee has invited written memoranda,
namely that related to the issue of the maritime skills base.
In particular, it discusses the consequences and implications
of a shortfall in supply of ships' officers to fill vacancies
in land based jobs where seafaring experience is considered to
be essential by employers.
2. THE REQUIREMENT
Using data gathered in a survey of firms and
other institutions identified as belonging to the maritime related
sector, Cardiff's initial study estimated that the number of shore
based jobs which employers would prefer to fill with people with
seafaring experience as 16,825 (see Table 1).
|Estimated number of jobs which employers would prefer to fill with former seafarers
|Jobs where seafaring skills are considered essential
|Jobs where seafaring skills are considered an advantage
|Jobs filled by:||
|UK ex-MN deck and engineer officers||10,988
|UK ex-MN other personnel||2,044
|Ex-RN petty officers and ratings||715
|Foreign ex-seafarers (mostly former deck and engineer officers)
|Source: Gardner and Pettit (1996).
Of the 11,778 jobs estimated to be in the essential category,
87.5 per cent are filled by former merchant navy officers. Jobs
in the essential category tend to be highly technical in nature
and may require additional training. These types of jobs are usually
filled by officers holding at least a Class 1 certificate. Former
naval officers, apart from those who are engineers, are seldom
employed in such jobs; they are usually employed either as general
or personnel managers by shore based businesses in the sector.
Foreign ex-seafarers within this category are predominantly engineers
and are largely employed in posts abroad by overseas branches
of UK companies. The principal employers of such foreign ex-seafarers
are insurance companies and classification societies.
3. ANNUAL DEMAND
An estimate of the likely annual demand for seafarers to
fill vacancies in shore based jobs in the UK economy is given
in Table 2, and an estimate of the likely annual demand for ships'
officers to fill vacancies in such jobs in the essential category
is given in Table 3. These estimates are central projections and
were derived from data gathered in the initial Cardiff study.
|Estimated mean annual demand for seafarers to fill vacancies in shore based jobs
|Jobs filled currently by||Annual demand
|UK ex-MN deck and engineer officers||529
|UK ex-MN other personnel||99
|Ex-RN petty officers and ratings||34
|Foreign ex-seafarers (officers)||68
|Source: Gardner and Pettit (1998)"Delivering for Britain" conference presentation.
|Estimated mean annual demand for ships' officers to fill vacancies|
in shore based jobs in the essential category
|Jobs filled by||Annual demand
|Ex-MN personnel (officers)||421
|Source: Gardner and Pettit (1998).
Estimates of the likely annual demand for British merchant
navy officers to fill vacancies in shore based jobs in the essential
category are given in Tables 4 and 5. Table 4 shows the composition
of the central demand projection on a sectoral basis.
|Estimated mean annual demand for British officers to fill shore|
based jobs in the essential category by sector
|Maritime Operations Land Based||74
|Maritime Operations Water Based||112
|Financial and other services||73
|Shipbuilding and Marine equipment||20
|Source: Gardner and Obando-Rojas (1998)"Greenwich Forum" conference paper.
Table 5, on the other hand, shows how the mean demand estimate
is affected by attaching a 95 per cent confidence interval to
the central projection. By attaching a confidence interval to
the central projection we can say, therefore, there is a 95 per
cent probability that actual mean annual demand for British merchant
navy officers to fill vacancies in jobs in the essential category
lies somewhere between a lower limit of 319 and an upper limit
of 523. Employers, moreover, will be normally looking for Class
1 certificate holders to fill such vacancies.
|Estimated mean annual demand for British merchant navy ships' officers|
to fill vacancies in shore based jobs in the essential category
|Source: Gardner and Pettit (1998).
4. THE SUPPLY
As the main source of supply for jobs in the essential category
has traditionally been wastage from the British shipping industry,
projections about the future annual supply of British ships' officers
with Class 1 certificates to fill such jobs may be derived from
past cadet and junior engineer intake numbers if the natural wastage
rate is known. This was the method used to calculate the number
of active seagoing officers in the Cardiff University projection
shown in Table 6; it assumes a 6.5 per cent natural annual wastage
rate. Since a British seafarer is unlikely to obtain a Class 1
certificate before the age of 25 years and evidence suggests that
employers in the shore based sector do not normally recruit seafarers
who come ashore after they have reached the age of 45 years, intake
figures for the past 28 years are required to make such projections.
Figure 1 shows the intake numbers on which the subsequent supply
projections in this memorandum are based.
An alternative estimate for the total number of active seagoing
officers in 1997 within the relevant age range comes from the
recently published study by the London Guildhall University. These
projections were derived from an analysis of records relating
to the certification of officers over a period of five and a half
years from January 1992 to July 1997. The five and a half year
timescale was necessary to ensure all revalidations of certificates
were captured in the analysis.
Table 6 provides a comparison between the results of the
Guildhall study and the projection made by Cardiff for 1997.
|The number of seagoing ships' officers (25-45 years) in 1997
|Age range||UK seafarers|
|Sources: McConville et al. (1998); Gardner and Obando-Rojas (1998).
Both estimates are similar for the total number of officers
in the 25-45 age range, thus apparently providing support for
the 6.5 per cent annual natural wastage assumption made by Cardiff
in its projections.
Although the estimates for the total number of officers within
this 20 year age range are similar, a comparison at a more disaggregated
level, where the 20 year age range is broken down into four five-year
sub-categories, shows that there are significant differences between
the two estimates in terms of the number of officers in each sub-category.
An explanation for the additional 478 officers in the 40-45 age
range in the Guildhall study may be that it includes as active
seagoing officers some former seafarers who are now employed in
the shore-based sector, such as pilots and other professionals,
who are required to revalidate their certificates. On the other
hand, Cardiff's projection may overestimate the number of officers
in the 30-35 and 35-40 age ranges and underestimate those in the
25-30 age range because it assumes that all ships' officers have
obtained their Class 1 certificates by the age of 25 and thus
will be eligible for recruitment by employers in the shore based
sector seeking to fill vacancies in the essential category.
Clearly, this is not likely to be so because, as the Guildhall
study shows (see Table 7), only 5.4 per cent of officers in the
25 to 30 age range hold Class I certificates. So, the pool of
officers from which shore based employers can recruit seafarers
with Class 1 certificates in the 25 to 45 age range is considerably
smaller than that indicated by Cardiff's projection.
On the basis of the findings of the Guildhall study, therefore,
it is more realistic to assume an age range of between 30 and
45 years for recruitment to the shore-based sector if employers
seek to fill posts with Class 1 certificate holders.
|Proportion of seagoing Class 1 certificate holders in the 25-45 age range
|Age range||Class 1|
in age group
|Source: McConville et al (1998).
5. THE INTERACTION
The present pool of seagoing British officers within the
30-45 age range is estimated as being less than 6,000. This reflects
the low level of cadet intake prevalent during most of the 1980s,
and the pool has now shrunk to the level where it cannot satisfy
shore based demand by natural wastage alone. Thus, the most likely
solution to the problem posed by the shortfall in officer supply
is that it will be resolved by the market, and the salaries of
former seafarers employed in jobs where their experience is considered
essential will rise relative to people of similar professional
status in the shore-based sector because replacements are in short
supply. Moreover, such rises in salaries will induce higher wastage
rates among British officers at sea in the relevant age range
causing a rapid depletion in the present pool of seagoing ships
officers and also job switching among former officers already
in the shore based sector.
The dynamics of the interaction process can best be visualised
by simulating it. The controllable variables of the model are
recruitment intake, natural wastage rate per year, recruitment
age range and shore based demand. For different scenarios the
time series of the simulation depends on whether the actual wastage
rate reaches 100 per cent per year, or whether the seagoing pool
recovers and reaches a steady state condition. The output from
the model shows the size of the pool of seagoing officers and
the actual wastage rate at yearly intervals. The former is dependent
on the latter. The effects of controlling any of the variables
are readily apparent in the output.
In the real world, the value of variables may be changed
by the adoption of appropriate policies. For example, a measure
that could be taken to boost cadet intake is increasing current
training funding, either through government support or industry-based
initiatives. Demand from the shore based sector, on the other
hand, could be reduced by tapping alternative sources of supply
such as training non-seafarers in the appropriate skills or by
the recruitment of qualified foreign seafarers.
The following scenarios will analyse the effect of different
policies on the size of the pool of seagoing officers and on actual
wastage rates. In all the scenarios it is assumed that the natural
wastage rate from the seagoing pool of officers is 6.5 per cent
per annum and that the age range over which such officers are
recruited to fill shore based job vacancies is 30 to 45 years.
Scenario 1: Maintaining current governmental policy
Figure 2 shows what is likely to happen if present policy
is maintained and interaction between shore and sea based employment
occurs. The scenario assumes that mean annual shore based demand
is 421 (central demand projection) and that cadet intake is maintained
at the level of 650 cadets per annum. Under these conditions the
pool of seagoing officers is virtually depleted by 2007 and the
actual wastage rate from the seagoing pool has increased to over
90 per cent.
Scenario 2: Raising the recruitment level of cadets
Figure 3 shows what is likely to happen if the recruitment
level of cadets is miraculously raised during 1998 and interaction
occurs. The scenario assumes that mean annual shore based demand
is 319 (lower confidence limit demand projection) and that cadet
intake is raised to 2,000 cadets in 1998 and maintained at that
level. Under these conditions the pool of seagoing officers is
virtually depleted by 2009 and the actual wastage rate from the
seagoing pool has increased to around 70 per cent. Raising cadet
intake numbers only thus is not a viable solution to the pending
Scenarios 3 and 4: Shortening the training period and reducing
shore based demand
Figure 4 and 5 show two possible alternative outcomes if
a fast track junior officer training programme is introduced for
graduates and programmes are also developed to train non-seafarers
to fill some of the job vacancies in the shore based sector currently
filled by Class 1 certificate holders, thereby reducing shore
based demand. In both scenarios it is assumed that cadet intake
is maintained at 650 cadets per annum, that the fast track graduate
intake is 800 and the training period necessary for them to obtain
Class 1 certificate can be shortened to four years and that training
programmes developed for non-seafarers to fill job vacancies in
jobs currently filled by Class 1 certificate holders will, from
2004 onwards, reduce shore based demand by least 160 persons per
annum. In the scenario depicted in figure 4, however, shore based
demand is assumed to be 421 (central demand projection) over the
period 1998-2003, whereas in the scenario depicted in figure 5
it is assumed to be 319 (the lower confidence limit projection).
These scenarios both show that there is a possibility that
the maritime skills base may yet be saved if appropriate policy
measures are adopted, since the pool of seagoing officers after
declining from its present level eventually begins to recover.
Of course, if the lower confidence limit demand projection reflects
the real world situation the prospects of saving the skills based
are significantly improved.
It is clear that the UK is in grave danger of losing its
maritime skill base within the next decade. The present situation
is, in fact, much worse than previously feared. This is partly
because, as the London Guildhall study shows, the pool of British
seagoing ships' officers from which employers can recruit to fill
vacancies in shore based jobs is much smaller than previously
thought, as less than 50 per cent of the relevant age range hold
Class 1 certificates; and partly because, as our modelling work
demonstrates, the situation will rapidly deteriorate as a consequence
of the failure to recruit a sufficient number of cadets in the
past to satisfy shore based demand without increasing wastage
rates from the sea based pool beyond the level which shipowners
can reasonably be expected to tolerate. Hence, unless decisive
action is taken now to remedy the situation, there is little prospect
of saving the skills base.
Because of the lead time involved in cadet entrants to the
shipping industry becoming fully qualified professionally (i.e.,
obtain their Class 1 certificate) any viable solution to the problem
requires now radical measures to be taken which tackle both the
demand and supply side aspects of the problem. We suggest, therefore,
that immediate action is taken to develop a fast track junior
officer training programme for graduates and training programmes
for non-seafarers to fill some of the posts currently filled by
former ships' officers with Class 1 certificates when they become
vacant. To resolve the problem the former programme needs to be
based on an intake of 800 university graduates per annum and the
latter programmes should collectively seek to reduce shore based
demand for Class 1 certificate holders by at least 160 persons
per annum by the year 2003.
The consequences of failing to act now and adopt the proposed
measures are likely to be:
UK shipping companies will cease to train British
cadets and junior officers.
Firms that are footloose will move their maritime
related business offshore to other maritime centres abroad where
the required seafaring expertise can be found with a consequential
loss of employment in the UK far greater than the number of former
ships' officers currently employed by such firms.
Other firms will have no alternative but to recruit
foreign seafarers unless they diversify into non-maritime related
Mr Bernard Gardner
Dr Mohamed Naim
Mr Bernardo Obando-Rojas
Dr Stephen Pettit
2 December 1998
Gardner B M, Pettit S J, (1996) The UK economy's requirements
for people with experience of working at sea. Report to the
Department of Transport, Chamber of Shipping and Marine Society.
University of Wales Cardiff. pp. 123. Back
The research team has presented results of the work at various
conferences: Is the European Union Seafarer An Endangered Species?
Dublin (1996); International Association of Maritime Economists,
London (1997); Delivering for Britain, London (1998); and
the Greenwich Forum Conference on Manpower Shortages in the
Maritime Industries, London (1998). A number of academic articles
will appear in 1999: Gardner B M, Pettit S J, Seafarers and the
land-based jobs market-The present UK situation, Marine Policy,
Vol. 23, No. 1. pp. 103-115; Gardner B M, Pettit S J, The land-based
jobs market for seafarers-Consequences of market imbalance and
policy implications, Marine Policy, Vol. 23, No. 2, pp.
161-175; Obando-Rojas B, Gardner B M, Naim M, A system dynamic
analysis of officer manpower in the merchant marine, Maritime
Policy and Management, Vol. 26, No. 1, pp. 39-60. Back
McConville J, Glen D, Dowden J (1998), "1997 UK seafarers
Analysis", The Centre for International Transport Management,
London Guildhall University. Back
Another reason why Cardiff projections may underestimate the number
of officers in the 25-30 age range is that they assume all recruitment
of cadets takes place at the age of 16. However, the Guildhall
study may overestimate the number of officers in this age range,
to some extent, as the estimates are likely to include former
seafarers who have come ashore after gaining their Class 3/ 4
certificate because they could not find employment at junior officer