Faststream Recruitment Group
UK
USA
Singapore
Norway
maritime employment review autumn 2008
global people specialist
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group managing director’s introduction Welcome to the Faststream Maritime Employment Review which is published in the midst of a global economic crisis, free falling freight rates and a general feeling of doom and gloom. But if you are someone with good experience in the shipping industry, then your skills still continue to be very much in demand. Despite the deteriorating economic situation, our offices in the UK, USA, Norway and Singapore are experiencing a continued call for commercial shipping people and our shipowning, broking and commodity trading clients are telling us that they expect to continue hiring people in the New Year. Driving this is the huge growth of the global merchant fleet which continues to expand at a relentless pace and needs a wide range of skilled professionals to service it. Recruitment, whether on the commercial or technical side, continues to be a headache for employers and many are struggling to fill crucial positions. Indeed, a recent Faststream survey of members of the Society of International Gas Tankers and Terminal Operators (SIGTTO) revealed that nearly 60% of them thought that recruitment was the number one issue facing their industry. The ongoing uncertainty driven by the credit crunch has led to candidates being much less willing to take a chance and relocate to a new company. The promise of large bonuses is failing to attract candidates, with base salary a far more important factor. Vacancies continue to be at very high levels.
Clients and candidates are always asking us what is happening in the recruitment market, so we have decided to produce quarterly reports on the state of the global market. In this report we focus on commercial chartering and broking roles in particular, but future issues will look at technical and other job types around the world. In a candidate short market, we recommend that companies actively pursue talent, customise their approach to suit the role and link their long term business planning with succession planning. Vacancy levels are going to continue to grow and companies need to sell themselves to candidates. We hope that you find this review useful.
Mark Charman Group Managing Director
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contents Introduction
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Contents
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Current Global Climate
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European Employment Overview
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Asia-Pacific Employment Overview
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USA Employment Overview
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Key Global Trends
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Faststream is an international recruiter which specialises in the shipping, marine and energy industries. Headquartered in Southampton (UK), the company has regional headquarters in Oslo, Singapore and Fort Lauderdale. The company was founded in 1999 and has enjoyed rapid year on year growth. To find out more please visit www.faststream.com
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current global climate After five years of boom is the party over for the shipping industry? At the time of writing (early October), amid panic in the financial markets and growing economic uncertainty, dry bulk freight rates have plummeted. Yet as a leading specialist recruitment firm for the global shipping industry with offices in the UK, Scandinavia, Asia and the USA, we are still witnessing increasing pressure on commercial roles. Shipbrokers, chartering managers, financiers, freight derivative traders, operators and lawyers are currently in demand as never before.
Dry Bulk Earnings Indicator (Jan 2000 - Oct 2008)
In terms of the size of the global fleet, the shipping industry continues to grow at a fast pace. Shipping companies around the world have been expanding at breakneck speed. New companies have emerged and established operations expanded in Europe, Asia and the USA. Analysis of the shipyards’ forward bookings reveals a record orderbook of nearly 600 million deadweight tonnes (dwt). If we limit ourselves to vessels of 10,000 dwt or larger (to ensure we are dealing with large oceangoing vessels), there are about 7,637 vessels of 578 million dwt on order at the world’s shipyards. Most of these vessels will deliver between now and 2010. The scale of growth is staggering. The existing industry fleet totals 16,383 ships of 923 million dwt. New vessels on order comprise 47% of the existing fleet by vessel numbers and 63% by dwt.
120,000 100,000
$ per day
Shipowning companies in particular face a huge lack of qualified candidates for their operational and technical departments.
80,000
Newbuilding orderbook 10,000 dwt or larger by vessel type Total orderbook 7,637 vessels
60,000 40,000 20,000 0
Other
(Source: Doll Shipping Consultancy)
Heavy Lift Vehicle Carriers
“One thing is for certain. More ships puts a greater demand on recruitment” Whether or not global economic demand will pick up again to meet demand for these vessels at high freight rates remains debatable, but one thing is certain. More ships mean a greater requirement for not only seafarers, but also onshore support staff and ancillary services industries. From ship operations to finance, chartering to legal advice, the range of work generated by a single vessel is vast and requires a range of specialists to service this business.
General Cargo Container Gas Tanker Bulker
(Source: Doll Shipping Consultancy)
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current global climate While difficult to say how many new jobs will be generated by these new vessels, the scale of fleet growth will ensure that job growth is substantial. Existing jobs will also become more demanding as regulatory changes and new technology ensure that specialist experience or qualifications will be needed. However this increased demand for people comes at a time when the market is increasingly candidate short. Shipping is a niche sector and commercial roles within it require candidates with a specialist set of skills which cannot be built up overnight. From Singapore to London, global shipping centres and the companies operating within them are competing for talent. Shipping people are generally by their nature highly mobile and open to the prospect of new challenges in a new city or country, wherever that may be. Companies need to work hard to retain existing employees and attract new blood. In this report we focus on shipbroking and chartering roles. The very strong freight rates and asset prices coupled with massive activity has translated into very high bonuses for many shipbrokers. Many have seen their pay cheques top the US$2m mark, but the dramatic falls in the market this autumn will see smaller Christmas bonuses.
We are unlikely to see some of the very lucrative and tempting packages offered before the summer, but whatever the market conditions, certain shipbroking firms will always need their star performers and will continue to offer attractive packages to the right people. The question facing junior brokers is whether in the face of a lengthy slump their employers will invest the large profits of recent years in training so that they are well positioned for any change in the market or whether they will be let go. In the face of a low market will some brokers reaching retirement age decide to hang up their boots early, opening up more vacancies to a new generation?
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european employment overview The European shipping scene has continued to expand, with all the major centres including London, Hamburg, Oslo, Copenhagen and Athens experiencing continued growth on the back of recent buoyant freight markets. Corporate tax issues continue to feature heavily on shipping companies’ agendas with recent unfavourable changes to Norway’s tonnage tax regime and the UK’s leasing arrangements leading to a number of companies to move locations with high profile companies such as Wilh. Whilhelmsen recently moving its operations from Oslo to Malta. This year’s changes to the UK’s so called “non-dom” tax regime, whereby UK resident but non-domiciled individuals, are now taxed on their overseas earnings has not as yet led to a flight of commercial shipping people to Athens, Geneva and Monaco as feared by a number of London based organisations. This issue is thought to be particularly relevant to the sizeable Greek shipping community based in London at both the most senior and middle management levels. However, only time will tell if the London Greek shipping community will move en masse to Athens. Certainly the attraction of low personal tax regimes of locations such as Dubai, Singapore and Geneva are often cited by candidates as a draw, but are not usually a decisive factor for those seeking a move out of the UK. The quality of the company, career prospects, benefits, lifestyle and salary are generally the more important factors. Oslo’s chartering scene remains active, although no longer exclusively services the locally based shipping companies. We have seen more creativity in recent years with smaller shipbroking operations opening up. With many companies not recruiting during the poor shipping markets of the 80s and 90s, a generation of commercial shipping people are reaching retirement age, but continuing to work. We believe that this will continue to be the case so long as the dry bulk and tanker markets continue to provide the opportunities
for good bonuses. If in the long term freight markets return to the levels of pre-2003, then we predict a flight of shipbroking and chartering experience. We are already seeing more opportunities arising than ever before for mid level candidates with experience and this phenomenon will become more pronounced.
“We are already seeing more opportunities arising than ever before for mid level candidates with experience...” Copenhagen continues to rise as a commercial shipping centre with strong government support for its maritime sector. The sector is active and like all markets many of the employers prefer local candidates to fill vacancies, but there is a particularly strong Swedish, Norwegian, Croatian and Polish presence here. The Greek market is facing a manpower challenge. Greek shipping companies have been at the forefront of the huge wave of new vessel orders and now control a greater number of vessels than ever before. Greek shipping companies have traditionally relied on Greek ex-seafarers to manage their operations, but the pool of Greek national seafarers is dwindling and shipping companies are struggling to find suitable candidates. We believe that Greek shipping companies will increasingly look to Bulgarians and Romanians to fill the gap. Hamburg and Bremen remain Europe’s leading container market centres and with more German controlled containerships coming down the slipways, we can expect greater pressure on containership operations in the region.
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asia-pacific employment overview Nowhere is the demand for experienced shipping executives more acute than in Asia, and in particular Singapore. Thanks to strong government support through a pro-business environment which includes a low tax regime and specialist arrangements such as the Approved International Shipping Enterprise and the Approved Shipping Logistics Enterprise schemes, Singapore has seen a flood of large and small companies setting up offices in the past three years. This pressure can be felt from junior post fixture roles to senior commercial and technical positions. Whilst there is a good and growing talent pool available locally in Singapore, many companies are looking to attract experienced candidates from other international maritime centres in order to meet their needs. At the same time local marine organisations are seeking to meet this long term future demand for talent by encouraging more graduates to enter the marine industry by promoting the shipping industry as offering exciting, challenging and diverse opportunities.
With its good education system, transport links and high standard of living, Singapore is seen as an attractive place to live. We have seen an increase in the length of time that ex-pats are now spending in Singapore. A few years ago, the majority of ex-pats would spend two to three years in the region before returning home. Today we are seeing individuals choosing to settle in the region for both professional reasons and for the quality of life which Singapore offers. Evidence for this can be seen in the huge waiting lists for foreign schools. Singapore is perceived as an easy place to come to and is growing at the expense of its rival Hong Kong. As the ex-pats become more integrated with the local community, we are also beginning to see fewer companies offering ex-pat packages, but higher salaries. These higher salaries are also filtering to the local workforce, with wages rising across the board. Marine related salaries in Singapore are becoming comparable with other international shipping centres around the world.
“Local organisations are actively encouraging graduates to enter the industry� Whilst there continues to be a net increase of available positions in Singapore, we are also seeing movement from many Indian nationals who are spending a limited time in Singapore and then moving to emerging centres such as Mumbai and Delhi to service the growing number of chartering operations in the region. Other regional movements include a growing volume of Dubai based ex-pats seeking new positions in Singapore as house prices and the cost of living in Dubai continues to rise inexorably.
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usa employment overview “The collapse in the American property market has had a significant impact with individuals finding it difficult and unwilling to relocate�
Whilst the weak dollar makes the US an attractive place for foreign companies to set up shop, shipping and offshore sector companies in the US are struggling to find suitable candidates to fill commercial vacancies. Not only are the companies facing the same challenges as their European and Asian competitors, but the collapse in the American property market has had a significant impact with individuals finding it difficult to relocate and sell their houses. Florida, California and the north east states have been particularly hard hit. In the US there is a particular shortage of senior tanker market executives. Commercial activity has been on the up for the past five years and most successful shipbrokers and charterers have been hesitant to walk away from booked business and bonuses. There continues to be a trend amongst both principals and brokers of poaching teams of trading and chartering staff from rivals. US trading houses are still keen to take on experienced shipping people who bring an established book of talent. Companies are not interested in taking on trainees, but want those who can bring instant business to the company. Interestingly there is no demand in the US from the trading houses for freight derivative traders, but a very strong demand for those with physical freight market experience. With the huge layoffs currently underway in the US banking sector, we are seeing traders seeking positions with companies with physical assets and refining capabilities. Approximately 80% of the US commercial shipping workforce is made up of US nationals with the remainder comprising Scandinavians, Europeans and Indians.
Ex-US seafarers are in strong demand, but many are staying at sea and not coming ashore. An estimated 70% of US seafarers are from the New England area and many are unwilling to relocate to Houston, Florida and the New York region where most of the shipping related jobs are clustered. Many prefer to take lower paid jobs in Boston rather than move across the country.
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key global trends Whilst the situation outlined makes grim reading for many companies looking to expand their operations, the positive news is that there is no shortage of high quality trainees entering the industry. Shipping is now “sexy” and companies are working much harder to promote their image and attract good raw talent. Trainee positions within the leading companies are always oversubscribed as university graduates around the world recognise the wealth of opportunities offered by the industry.
With the average length of service within a company now at between three and five years, companies are focusing on offering better packages. We are seeing companies offering more flexible hours, improvements in the work environment, free lunches and other initiatives. Companies are also putting more emphasis on training and studying for professional qualifications for staff both as a means of raising productivity, but also as an incentive to remain with the employer.
Shipbroking is becoming an increasingly professional industry and shipbroking firms are offering more training and increasingly turning to recruitment consultants to help fill vacancies. The days of the “streetsmart” broker look numbered with more companies expecting candidates to have a university degree.
The growing pressure of regulation and more emphasis than ever before on environmental and safety issues has lead to a rise in the importance of the operations department. Good vessel operators take care over issues such as vetting and accident prevention and can make the difference between a successful and failed fixture.