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Friday, December 15, 2017

Tanker Daily Operating Costs rise 9.1% in 2006 according to Moore Stephens Study

Following the publication of its OpCost 2007 publication, Moore Stephens organised a Ship Operating Costs Seminar where Richard Greiner, partner Shipping Industry Group of Moore Stephens, presented the main results of the study.

 

Whilst more attention is paid to the developments in the freight and trade markets, the significant upward pressure on operating costs can be noted (see Table 1) for all types of vessels included in the study.

 

Table 1

OpCost Index, 2000-2006

 

Bulker

Tanker

Container

 

Index

%change

index

%change

Index

%change

2000

100

-

100

-

-

-

2001

101

1%

106

6%

-

-

2002

96

-3%

109

3%

100

-

2003

105

7%

113

4%

110

10%

2004

118

12%

125

11%

117

6%

2005

122

3%

132

6%

120

3%

2006

135

11%

144

9%

133

11%

Average

 

5.2%

 

6.5%

 

7.5%

Source: Moore Stephens presentation OpCost 2007

 

 Significant increases in the 2006 daily operating costs (drydock costs not included) for the smaller sizes of tankers (see Table 2) can be observed, with an increase of 11.5% in 2006 for both product and handysize product tankers and an overall weighted average of 9.1%.

 

Table 2

Daily Operating Cost 2006 / year-on-year changes, 2004-2006

 

2006

 

 

Daily Rate (US$)*

%change in 2006

% change in 2005

% change in 2004

Product

6,188

11.5%

7.2%

17.5%

Handysize

6,386

11.5%

2.9%

16.6%

Panamax

6,889

8.7%

7.2%

2.5%

Aframax

6,597

8.4%

8.6%

0.01%

Suezmax

7,316

8.0%

5%

12.2%

VLCC

8,771

7.5%

12%

6.1%

Weighted Average

 

9.1%

 

* drydock costs not included

Source: Moore Stephens Presentation OpCost 2007, OpCost 2005

 

The main cost items were presented (see Table 3) and the stores indices showed the greatest increase in 2006 across the board, reportedly in all except one vessel category.         

 

Table 3

 OpCost Indices, 2006 (year-on-year percentage change)

 

Crew Costs

Stores

Repairs & Maintenance

Insurance

Bulker

132 (9.1%)

143 (20.2%)

125 (14.7%)

169 (8.3%)

Tanker

157 (9.8%)

140 (14.8%)

122 (7%)

179 (8.5%)

Container

127 (6.7%)

177 (22.1%)

123 (12.8%)

167 (6.4%)

Source: Moore Stephens presentation OpCost 2007

 

For tankers (see Table 4) this was the highest increase compared to other cost categories (14.8%). It was suggested that the outcome in the previous year (2005) might have been artificially low as owners had made provisions and planned for more expensive and scarce lubes.

 

Table 4

OpCost Tanker Indices, 2000-2006

 

Crew Costs

Stores

Repairs & Maintenance

Insurance

 

Index

%change

index

%change

Index

%change

index

%change

2000

100

-

100

 

100

 

100

-

2001

106

6%

107

7%

100

0%

116

16%

2002

110

3.8%

108

0.9%

97

-3%

146

25.9%

2003

114

3.6%

108

0%

102

5.2%

162

11%

2004

129

13.2%

119

10.2%

114

11.8%

159

-1.9%

2005

143

10.9%

122

2.5%

114

0%

165

3.8%

2006

157

9.8%

140

14.8%

122

7%

179

8.5%

Average

 

7.9%

 

5.9%

 

3.5%

 

11.2%

Source: Moore Stephens presentation OpCost 2007

 

 The tanker crew cost index increased significantly by 9.8%, attributed to the difficulty in obtaining qualified crew.

 

Whilst repairs and maintenance had the lowest increase over the 7-year period, the insurance index was marked by the highest increase. Richard Greiner commented that an informal inquiry with an insurer had indicated that there seems to be no correlation between the revenue of the insurance industry and this development.

 

For the next edition, OpCost 2008 (covering 2007), Moore Stephens hopes to be able to include more ship types, incorporate the element of age in their analysis and benchmark on third party shipmanagers’ management fees.

 

More information can be obtained on the Moore Stephens website: www.moorestephens.co.uk

 

Contact: Chantal Cheung Tam He