October 1, 2008
Shipowners face rising rew costs
Ship operating costs rose by over 11 percent last year, mainly as a consequence of higher crew costs, says leading shipping accountant Moore Stephens.
OpCost 2008, Moore Stephens' ship operating cost benchmarking tool, shows an annual average increase of 11.2 percent in total operating costs in 2007, the financial year covered by the survey.
The OpCost containership index saw the largest overall increase of 24 points, or 18.0 percent, mainly driven by higher crew costs in all three container ship types covered.
The tanker index has increased by 16 index points (11.1 percent) on a year on year basis, while the bulker index has seen a smaller increase this year of 10 index points (7.4 percent).
Moore Stephens partner, Richard Greiner says, "Containerships saw crew wages rise an average of 20 percent this year, and the average crew wage rise over all ships was over 10 percent. We also saw stores going up by an average of 16 percent, down a little from the sharp 20 percent rise last year but still significant. Most of that rise was down to a sharp increase in lube oil costs."
Owners continued to spend more on Repairs and Maintenance, with costs in that category going up an average of 12 percent, although there was significant variation across vessel types. Insurance also increased by around 7 percent, down on last year's increase.
Greiner says, "This year we have over 24 percent more ships included in our sample, meaning we derive the data from the actual costs experienced by over 1,800 ships in service. OpCost is firmly established as the primary source of operating cost information for the international shipping industry and owners see the benefit to themselves of submitting their accounts for inclusion. They help improve the data, and they help themselves by being able to see clearly how they are doing in managing operating costs compared to their peers.
"Next year we hope to add an LPG carrier type to the database, and also a new container ship size bracket of over 6,000 teu and perhaps an LNG carrier type as well. We hope owners with ships in those sizes and types will join in with us."
OpCost is built from real data from real ships and so gives an accurate picture of the costs facing shipowners and ship managers for most major ship types and sizes. Running cost information is obtained on a confidential basis from the accounts of shipping clients of Moore Stephens, and from other shipowners and ship managers who submit accounts for inclusion. OpCost is widely used for benchmarking running costs, the preparation and ongoing monitoring of business plans and in forensic accounting.
Copies of the OpCost 2008 report are available free to owners who submit their accounts for inclusion, or can be purchased by contacting Richard Greiner at Moore Stephens London.