Lube Oil & Crew Costs Most Likely to Increase Operating Costs

Moore Stephens
Friday, November 02, 2012
Moore Stephens shipping partner Richard Greiner

Vessel operating costs are expected to rise by 3.0 per cent in both 2012 & 2013 according to a new Moore Stephens survey.

Lube expenditure and crew costs are the categories most likely to produce the highest levels of increase.


The survey is based on responses from key players in the international shipping industry, predominantly shipowners and managers in Europe and Asia.


As was the case twelve months ago, those responses identified lubricants as the cost category likely to increase most significantly – by 2.9 and 2.8 per cent in 2012 and 2013 respectively.


Crew wages, meanwhile, are expected to increase by 2.3 per cent in 2012 and by 2.4 per cent in 2013, with other crew costs thought likely to increase 2.1 per cent for both years under review. The cost of spares, meanwhile, is expected to escalate by 2.2 per cent in each of the two years covered by the survey.


“With crude oil prices hardening, lube costs will go up,” said one respondent, while another observed, “Fuel and lube suppliers are very aware that there is an oversupply of tonnage on the market, and take advantage of that in their dealings with owners.” Another still said, “There is ongoing pressure to reduce operating costs by means of improving vessel fuel efficiency, and in practice there might be a gap between expectations and what can be achieved as fuel and lube costs are likely to increase at a steady pace.” Elsewhere it was noted, “There is no alternative to lube oil, and costs are already very high, making it very difficult to operate a ship.”


A number of respondents cited crew costs as a major cause for concern. One said, “As long as there is stiff competition on crew costs amongst managers, with wages being increased at random, the situation will not settle down.” Another noted, “The volume of new vessel deliveries and short contracts will put pressure on crew supply, and crewing costs will go up.” Neither were respondents convinced that more expensive crews would actually mean better crews. “Crew competence and skill is declining,” said one, “with a trend towards short contracts and fast promotion. This is leading to more accidents and to extraordinary unbudgeted expenses.”


Moore Stephens shipping partner Richard Greiner says, “Ship operating costs increased by an average of 2.1 per cent across all the main ship types in 2011, and it is unsurprising that our latest survey anticipates that costs will rise by a greater margin in both 2012 and 2013. Although they will be difficult for owners, operators and managers to absorb in a struggling economic environment and a depressed freight market, these increases still represent a continuation of less volatile cost movements than those we saw just a few years ago.


“Once again, lubes and crew costs are predicted to increase most significantly, and it was concerns in respect of these which dominated the comments made by respondents to the survey. Given projected increases in the price of oil, and the entry into force next year of the Maritime Labour Convention 2006, it would be a surprise if the same were not true of next year’s survey.”

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Euroseas Sells C/V Marinos

Euroseas Ltd.  an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes,

Bill on Danish Maritime Planning Submitted

The bill is to form the basis of a maritime planning act intended to promote economic growth and development of sea areas. The Danish Maritime Authority is to head the work.

Plans to Create Rio Doce Fund

Vale and BHP Billiton announced today plans to work together, with Samarco, to establish a voluntary, non-profit fund to support the rescue and recuperation of the Rio Doce river system,

Fuels & Lubes

Dan-Bunkering Appoints Bara as Bunker Trader

Dan-Bunkering (Middle East) DMCC is pleased to announce that Lamin Bara has joined the office in Dubai as Bunker Trader as per 1 November 2015. Lamin was

Asia Fuel Oil-Cracks, Spreads Tight; Bunker Prices Climb

Asia's fuel oil crack for benchmark 180-centistroke rebounded to a discount of $6.79 a barrel on Wednesday, gaining as bunker prices firmed on the possibility of

Concordia Maritime Charters MR Tanker

Concordia Maritime has signed a contract for the charter of an IMO2/3 class MR tanker, the company announced today. The vessel will be chartered jointly with Stena Weco,


Seaspan Implements ECO Insight solution

Seaspan Ship Management Ltd. will implement the DNV GL fleet performance management solution ECO Insight to improve their fleet monitoring. ECO Insight will

Canada to Aid Developing Nations Fight Climate Change

Canada will provide aid to developing countries to combat climate change, Prime Minister Justin Trudeau announced on Friday ahead of talks on global warming,

Statoil Picks MacGregor Mooring Systems for Hywind

MacGregor, part of Cargotec, has won an order for substructure connection mooring systems for the world's first floating offshore wind farm: Statoil's Hywind pilot park in Scotland.

Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0940 sec (11 req/sec)