Foreign shipping companies hiring South-East Asians

Sooraj Thomas was always fascinated by the sea. Nine months ago, he graduated as a cadet in the merchant navy from a renowned private institute in Chennai. Like many of his seniors, he was confident of landing a job on campus. But Thomas is yet to find a job.

Foreign shipping companies are hiring work-hungry Filipinos and Ukrainians for cheaper salaries, ending a dream run for Indians in a profession once known for its fancy salaries and the rush of adrenaline . “I put in all my effort to be a cadet in the four-year course, but companies are not recruiting us. There is a flood of cadets in the market,” says Thomas.
The shipping industry may have emerged from the two-year downturn, but Indian seafarers are finding it increasingly difficult to get a job in the face of increasing competition from South East Asian cadets. Besides, the rapid strides made by Chinese ship-building companies in the global market have led to more South East Asians being employed. For hundreds of youngsters who aim to make quick money in the profession, this is a let-down. The global supply of seafarers from India has grown only by 22.8% in the past five years while South Asian countries such as Philippines and China saw a 41.6% growth (see chart).
“There is a demand-supply mismatch in the sector. Till a few years ago, Indian seafarers were considered the best in the business,” says Babu CLT, a chief engineer with a domestic shipping company. Indian seafarers were renowned globally for their skill (including their comfort with English), knowledge, aptitude and professionalism. “Ship owners needed a crew that was analytical, expressive, innovative and submissive, which is why they took a fancy to Indians,” says Subrat Mukherjee, GM, manning personnel at ship management company Orient Express. But today, crew from developing countries like Ukraine, the Philippines, Poland, Indonesia and China have captured the market by accepting salaries that are a quarter of what Indian engineers get paid, says Madan Kochhar, president, i-maritime Consultancy.
The Philippines, for instance, has always been a seafarers’ nation. “They are currently the best in terms of crew and in sea faring,” says Mukherjee. Global players are recruiting Filipinos because they are hungry for work and efficient, he adds.
Competition from the Philippines can be traced back to the 2008 recession. During the period, many American and Dutch shipping companies, which were hiring Indian seafarers, were on the verge of bankruptcy, and South Asian countries such as Korea, China and Japan emerged as the front-runners, acquiring ships world-wide. In January 2010, China overtook the Republic of Korea as world’s largest shipbuilding nation in new orders, according to the London-based shipping service provider Clarkson.
India’s ship-building industry accounts for just 1% of the global market. “Filipinos may not be skilled as Indians, but the recession saw the entry of a large number of ship owners, mainly the Chinese and the Koreans. There is also an emotional connect that these countries have with the Philippines,” says Mukherjee. While some Indian companies such as Essar and Varun Shipping did step in, trying to buy ships during the downturn, other South Asian economies had a clear edge in this area, leading to an increase in recruitment of Filipinos.
One of the reasons for the demand-supply mismatch among Indian cadets is that not enough attention is being given to quality training and job security.
The maritime education sector in India was opened up to the private sector in the mid-1990s to meet the demand shortage. There are 126 maritime institutes in India, with an average of 200 students each. The proliferation of institutes has raised questions on the quality of candidates churned out every year. Maritime colleges have more than tripled in the past decade, releasing a large number of graduates into the job market. “Institutes are churning out engineers in just one year. If the government doesn’t introduce a policy for fixed minimal cadet jobs a year, institutes will add no value,” says a director at Varun Shipping who does not wish to be named.
The government needs to increase the number of berths available for cadets, says Mukherjee, adding that a few years ago, ships were run by cadets to give them hands-on experience. “If we don’t nurture them now, the demand will be hugely unfulfilled in the long run,” he says.
Technology has played its part in edging out manpower from ships. A container that would earlier require 10 cadets can now make do with just two. Very often, a cadet is sacrificed to retain senior personnel on the ship, such as a chief officer, who is paid extra to look into the job done by a cadet.
While a chief engineer or chief officer typically earn $11,000 a month (Rs 5,00,000), a cadet earns just over $200 a month (Rs 10,000), which goes towards the senior officer’s pay hike once a cadet’s job is axed. “By doing so, owners are able to reduce their associ-ated costs and compensate for high fuel costs,” says a second officer at a foreign shipping company.
But till the day the industry strikes a balance, dreams of youngsters like Sooraj Thomas, who are passionate about sea faring, will remain unfulfilled.

Source: The Economic India Times