Moore Stephens: Crews Drive Operating Costs Surge
Ship operating costs surged over 11 per cent last year, mainly as a consequence of higher crew costs, says leading shipping accountant Moore Stephens.
OpCost 2008, Moore Stephens' unique ship operating cost benchmarking tool, shows an annual average increase of 11.2 per cent in total operating costs in 2007, the financial year covered by the survey.
The OpCost container ship index saw the largest overall increase of 24 points, or 18.0 per cent, mainly driven by higher crew costs in all three container ship types covered.
The tanker index has increased by 16 index points (11.1 per cent) on a year on year basis, while the bulker index has seen a smaller increase this year of 10 index points (7.4 per cent).
Moore Stephens partner, Richard Greiner says, "Container ships saw crew wages rise an average of 20 per cent this year, and the average crew wage rise over all ships was over 10 per cent. We also saw Stores going up by an average of 16 per cent, down a little from the sharp 20 per cent 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 per cent, although there was significant variation across vessel types. Insurance also increased by around 7 per cent, down on last year's increase.
Greiner says, "This year we have over 24 per cent 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. (0708)
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. Tel: +44 (0)20 7334 9191 email: firstname.lastname@example.org
•About Moore Stephens LLP
Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 621 offices of independent member firms in 95 countries employing 19,279 people. Fee income increased in 2007 by US$340.3 million to US$1,884.0 million, a growth rate of 22%, doubling turnover in the past three years.
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