Seafarers’ contributions are vital for global economy

Seafarers’ contributions are vital for global economy
Lori Ann LaRocco June 30, 2023 https://www.freightwaves.com/news/seafarers-contributions-are-vital-for-...

New report details how these maritime jobs and salaries boost GDP

A new report is highlighting the contributions of seafarers and how these unsung heroes of the sea help boost gross domestic product.

The study, “The key role of seafarers in national economies in a net-zero world,” was released this week by the Institute of the Americas at the University of California San Diego and it shows that seafarer jobs and their salaries pack an economic punch to a country’s economy.

Look no further than the Philippines, which is the home of 30% of the world’s seafarer workforce, said Leonardo Beltran, former deputy secretary of energy of Mexico and a fellow at the Institute of the Americas.

The country’s contributions to the world’s global trade cannot be understated.

The money going back into the Philippines economy accounted for 1.8% of the nation’s GDP in 2022, according to the report, which was commissioned by the International Chamber of Shipping. The report said this cash infusion would add an additional 0.5% of GDP per year to the U.K., U.S. or Philippine economies.

“[It] is a great example of how a country is taking proactive steps in identifying opportunity,” Beltran told American Shipper. “By investing in better data, they can develop resources and make decisions to collaborate in areas of skills training, construction and the development of supportive policies to contribute to the national economy.”

The report added, “This extensive presence is reflected in the composition of international vessel crews, where approximately one in every five crew members is Filipino, seafarers are highly sought after. They work as officers, engineers and ratings (seafarers without a certificate of competence), among other things, on a variety of vessel types. Remittances play a substantial role in the Philippine economy.”

The Russian Federation, Indonesia, China and India round out the top five of the global merchant fleet.

The maritime industry was thrust into the spotlight when consumers around the world were running out of toilet paper. This once taken-for-granted industry and the influence and impact it has on the supply chain is finally garnering the acknowledgement and understanding it deserves. Now seafarers are finally being acknowledged for the powerful impact they have on the global economy.

Expanding to the rest of the world, the maritime sector contributed $432 billion to the United States’ GDP, or around 2% of its GDP, last year. There’s no question seafarers and the maritime industry are critical to global economic growth. We have seen through the decades how trade when introduced to a country sparks the development and sustainment of the middle class. The more middle class we have, the bigger increase we see in the growth of trade. After all, trade takes people.

In anticipation of the growth in trade, Beltran said approximately 1,000 new vessels will be needed to move goods across the ocean highway. That means an additional 30,000 seafarers will be needed to work the vessels. Between the indirect and direct investments, which are estimated to be north of $32 billion, a total of 84,500 indirect jobs will be created, Beltran explained in the report. That’s a lot of money going into the global economy.

Unfortunately, the maritime sector faces similar challenges as other industries: finding talent and the training of talent. According to the report, the Malaysian economy is being damaged due to the lack of skilled workers and shipping companies hiring seafarers from neighboring places like Singapore.

“Thus, the Malaysian government must invest time and capital in human resource development,” the report states. “The development and expansion of the shipping industry depends on it. To produce more seafarers with a valid Certificate of Competency under the [Standards of Training, Certification and Watchkeeping for Seafarers], the government must create economic incentives to lure workers and promote training and education for the maritime sector while taking into consideration the current transition to the use of digital technologies.”

The next hurdle facing the pivotal seafaring community will be the maritime sector’s march toward zero emissions. While there is no near-term solution because of the lack of ocean carrier consensus on vessel power generation, once an agreement is made, this will require seafarers to be specialized and highly trained.

The role of the seafarer cannot be discounted. Now is the time for more investment to be made in strengthening the human capital.