Seafarer market structure analysis of Korean merchant shipping in COVID-19

COVID-19 pandemic clearly demonstrates that seafarers are essential for sustaining world shipping services and global supply chain. Understanding the characteristics of supply and demand in seafarer market will be a solution for the bottleneck issues of seafarer change and shipping services. This paper explores the supply and demand of seafarer market in Korea and evaluates the effects of COVID-19 on both supply and demand sides of Korean seafarers by adopting regression models with panel data for the supply and time series data for the demand. First, this paper finds that the effects of COVID-19 are negative in the demand of Korean seafarer market even with the wider increase of tonnage of the Korean flagged ships in 2020. The demand shock seems to be resulted by the traveling restriction and stricter immigration measures to travellers after the announcement of COVID-19 pandemic. Second, supply in the regression models of panel data is affected negatively after declaration of the COVID-19 pandemic in 2020. The COVID-19 pandemic may trigger the hesitation of seafaring due to the travelling restriction and bottlenecks from seafarer changes onboard. Besides these findings, the correlation coefficients between the number of Korean seafarers of merchant ships and merchant fleet illustrate a diverse relationship between the two. The expansion of Korean ocean-going fleet is accompanied by the decrease of Korean seafarers on the Korean flag. The employment of foreign seafarers since 1992 has resulted in the continual decrease of ratings employment in the Korean flagged ships. The inflow of foreign deck officers in the Korean flagged ships after 2005 could lessen the officer deficiency caused by high separation rate of Korean deck officers. This inflow implies that seafarer market in a country not only affects global seafarer market in the world through the changes of seafarer supply and demand in the country, but is affected by the global market. The dual markets of Korean seafarers in ocean-going and coastal shipping present the following phenomena: severe aging of seafarers in coastal shipping and wider difference in welfare level of seafarers between the two. Further research on wage and career advancement of Korean seafarers would widen and deepen our understanding on seafarer market both for Korea and the rest of the world.