Ship operating costs set to increase, says Moore Stephens

27 Oct 2017
Greiner: Significant proportion of industry identifies regulatory costs as a major opex factor

Greiner: Significant proportion of industry identifies regulatory costs as a major opex factor

Vessel operating costs are expected to rise in both 2017 and 2018, according to the latest survey by accounting and shipping consultancy Moore Stephens.

The survey, based on responses from shipping companies including ship owners and managers in Europe and Asia, reveals that vessel operating costs are likely to rise by 2.1% in 2017 and by 2.4% in 2018.

The cost of repairs and maintenance is expected to increase by 2.0% in both 2017 and 2018, while expenditure on spares is predicted to rise by 2.0% in 2017 and by 1.9% in 2018. Drydocking expenditure, meanwhile, is expected to increase by 1.7% and 1.8% in 2017 and 2018 respectively.

The survey revealed that the outlay on crew wages is expected to increase by 1.7% in each of the years under review, with other crew costs thought likely to go up by 1.6% in 2017 and 1.5% in 2018.

The increase in expenditure for lubricants is expected to be 1.6% in both 2017 and 2018. Meanwhile, projected increases in stores are 1.5% and 1.7% in the two years under review, while management fees are expected to rise by 0.7% and 1.0% in 2017 and 2018 respectively.

The cost of hull and machinery insurance is predicted to rise by 0.5% and 1.0% in 2017 and 2018 respectively, while for P&I insurance the projected increases are 0.7% and 1.1% respectively.

The predicted overall cost increases were highest in the offshore sector, where they averaged 4.8% and 3.8% respectively for 2017 and 2018. Predicted cost increases in the container ship sector were just 1.1% and 0.8% for the corresponding years.

Operating costs for bulk carriers, meanwhile, are expected to rise by 1.9% in 2017, and by 2.4% the following year, while the corresponding figures for tankers are 2.1% and 2.7%.

Richard Greiner, partner, shipping & transport, Moore Stephens, said: “It is significant that, for the first time, new regulations were included in the list of factors which respondents could cite as most likely to influence the level of operating costs. It was even more significant that 15% of respondents did indeed identify regulatory compliance as a major consideration when weighing future operating cost increases.”

Greiner identified the IMO’s Ballast Water Management Convention, now with an extended implementation window, as “still potentially the most expensive item on the [regulatory] menu”.