Ship operating costs increase again but insurance costs plummet
International accountant and shipping consultant Moore Stephens says total annual operating costs in the shipping industry increased by an average 2.2 per cent in 2010. This compares with the 2.0 per cent average fall in costs recorded for the previous year, which was the first time since 2002 that operating costs had fallen. All cost categories showed an overall increase this time, with the exception of stores and insurance – with the latter falling by 4.7 per cent overall.
The findings are set out in OpCost 2011, Moore Stephens’ ship operating costs benchmarking tool, which reveals that all individual categories of vessel covered by the research, with the exception of handysize product tankers, experienced an increase in total operating costs in 2010, the financial year covered by the survey. Costs for the three main sectors covered – bulkers, tankers and container ships – were all up. The bulker index increased by 5 index points (or 2.9 per cent) on a year-on-year basis, while the tanker index witnessed a two-index-point (1.1 per cent) rise. Meanwhile, the container ship index (with a 2002 base year, as opposed to 2000 for the other two vessel classes) was up three index points, or 1.9 per cent. The corresponding figures in last year’s OpCost report showed falls in the bulker, tanker and container ship indexes of 1, 5 and 13 points respectively.
There was a 3.2 per cent overall increase in 2010 crew costs compared to the 2009 figure, which itself represented the most moderate increase for a number of years. In 2008, the report revealed a 21 per cent increase in this category. Tankers overall experienced increases in crew costs of 2.7 per cent on average, compared to 2.5 per cent in 2009. For bulkers, meanwhile, the overall increase in crew costs was 4.0 per cent, while for container ships it was 2.9 per cent.
For repairs and maintenance, there was an overall increase in costs of 4.5 per cent, compared to the 11.3 per cent decrease recorded for 2009. The biggest increase here was the 8.0 per cent recorded in the container ship category. For bulkers the increase was 7.6 per cent, and for tankers just 0.8 per cent. There were variations in the cost movements experienced within vessel categories. Whereas operators of handysize bulkers spent an average of 12.0 per cent more on repairs and maintenance in 2010, those running capsizes recorded an average increase of just 3.7 per cent. And whereas the average increase in repair and maintenance costs for panamax tankers was 8.4 per cent, operators of aframaxes actually spent 1.3 per cent less than in 2009. In the container vessel sector, meanwhile, increased repair and maintenance spend was fairly consistent across all box ship tonnage sizes covered by the report.
For the second successive year, OpCost reveals a fall in the level of spending on stores – down by 1.0 per cent. Overall, expenditure in this regard was actually up in the bulker sector, by 1.1 per cent, but down in the tanker trades (by 3.4 per cent) and in the container ship market (also by 3.4 per cent).
The insurance category showed the biggest movement in terms of costs – down overall by an average of 4.7 per cent across all vessel types in 2010. For tankers, the insurance spend was down by 7.9 per cent, for container ships by 3.8 per cent, and for bulkers by 2.9 per cent. Panamax bulkers were the only individual class of ship to spend more on insurance in 2010, while the likes of small chemical tankers (10.4 per cent), VLCCs (9.8 per cent) and aframax tankers (9.0 per cent) spent considerably less.
The latest report marks the eleventh year of publication for OpCost, which this time includes data from 2,600 ships, a record number. Running cost information is obtained on a confidential basis from clients of Moore Stephens, and from other shipowners and ship managers who submit data for inclusion.
