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

Finance

Solarworld Wants Duties on Chinese Solar Goods in U.S. Extended

German solar manufacturer SolarWorld will apply to the United States for an extension of duties on Chinese panel imports that are due to end this year, weekly Euro am Sonntag said.

Sea Urchin Haven Disturbed by Oil Spill

Stephanie Mutz makes a living plucking sea urchins from the Santa Barbara coast and selling the prickly treasure to upscale restaurants in Southern California.

Viking Orders 2 Liebherr Cranes

An LR 1300 with super lift equipment and an LR 1160 crawler crane will strengthen the fleet of Viking Cranes. The Tallinn-based company with branch offices

Fuels & Lubes

Sea Urchin Haven Disturbed by Oil Spill

Stephanie Mutz makes a living plucking sea urchins from the Santa Barbara coast and selling the prickly treasure to upscale restaurants in Southern California.

Red Tape, Industrial Relations Could Stifle LNG Potential

Australia could develop the world’s most technologically advanced LNG industry, according to a report by Accenture. But if industry is to reach its potential

Oil Leak Contained at MV Miner Site

On-site workers acted quickly to contain an oil leak during the final stages of removing the wreck of the MV Miner off Scaterie Island, says the government of Canada’s Nova Scotia province.

Consulting

Volume Up in Dutch Maritime Technology Sector

The Dutch maritime technology sector has had a good year. Turnover increased by 17%, from EUR 6.4 billion in 2013 to EUR 7.5 billion in 2014. The sector employed 31,680 FTEs, up from 29,361 in 2013.

Carrier Schedule Reliability Improves in April

Transport consultant Drewry’s Carrier Performance Insight (CPI) for April records 67.6%, up by 4.1 percentage improvement on the previous month in the aggregate

European Ports Identify Their Priorities

European ports are real “multitaskers”: they combine different functions ranging from gateway to the world, nodes in the transport chain, hotspots for Europe’s industrial activity,

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction
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: 0.1278 sec (8 req/sec)