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 June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Baltic Index Rises on Increased Demand Across Segments

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Thursday on higher demand across all vessel segments.

PALFINGER Finalizes Harding Acquisition

The PALFINGER Group closed the acquisition of 100 percent of the shares in Herkules Harding Holding AS, i.e. the globally operating Harding Group, supplier of lifesaving

Beijing Slams South China Sea Court Proceedings

Permanent Court of Arbitration ruling set for July 12. An international court said it would deliver a hotly anticipated ruling in the Philippines' case against

Fuels & Lubes

Demand, Bunker Pricing Spurs Asia Dry Bulk-Capesize Rates

Owners asking $1 per tonne more on Australia-China rates; Panamax rates climb to two-month high, but remain under pressure. Freight rates for large capesize

Panama Canal Expansion: Impacts on the Bunker Industry

The total volume of the Panama bunker market has increased in recent years as price levels are becoming increasingly competitive to U.S. bunker hubs like Houston, New Orleans and New York.

LUKOIL Introduces New Crankcase and Cylinder Oils

LUKOIL Marine Lubricants has introduced the newly formulated NAVIGO 6 CO crankcase oil and NAVIGO 70 MCL AW cylinder oil, offering newly designed additive packages

Consulting

MAST, AMSA Partner for Risk Management Services

Maritime security company Maritime Asset Security Training (MAST) has announced their partnership with Astbury Marine Services & Associates (AMSA), a specialist

Boon, Non-executive Director of ST Engineering Resigns

Singapore Technologies Engineering Ltd (ST Engineering) today announced the resignation of Mr Quek Tong Boon as non-executive Director with effect from 1 July 2016.

BIMCO - Oil Product Tankers Earnings Decline as stockbuilding Slows Down

BIMCO’s expectations remain as the oil product tanker fleet continues to grow with earnings at the lowest since Q3 in 2014. But there is still money to be made in the second half of 2016.

 
 
Maritime Contracts Maritime Security Maritime Standards Offshore Oil Pipelines Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
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: 0.0983 sec (10 req/sec)