OPEX THE SHIP MANAGEMENT VIEW. V.Ships

Transcription

1 OPEX THE SHIP MANAGEMENT VIEW

2 The Aim Working with owners to enhance operating efficiency

3 OPEX Budgeting Budgeting is a vital part of a cost control policy and can be described as the process of planning systematic spending If the OPEX budget is not realistic the vessel will suffer either Operationally or Loses asset value The owners loses money The manager loses business and reputation

4 What are the drivers Fuel prices LO prices Crew Wages Finance! Food costs Spares costs Maintenance costs (more shore technicians being used). Insurance (part market forces part owners profile) P+I rise of 10 to 15% in 2013!! NEW REGULATIONS (93 pages in the LR IMO summary ) Piracy ( increasing / decreasing or just moving) Currency swings; Euro/dollar?

5 Manning Cost Drivers End of super-cycle in 2008 brought end to period of high crew wage inflation (up to 20%+ YoY). NOW Continuing growth in world fleet translates into persistent undersupply of officers (over supply of ratings). For forecasting purposes, crew wages look fairly stable for 2013 but we may still see increase in officer rates on special tonnage. Increase cost of training (OBT and shore based facilities ) as industry needs to increase competency levels. Air travel costs. Low cost airlines? Victualing cost rising due to food price inflation.?

6 Operating cost breakdown SUMMARY OF ESTIMATED RUNNING COSTS (Panamax tanker 5 years old) TOTAL 2012 PER DAY COST ALLOCATION 1. CREW COSTS 1,248,612 3,421 US$ US$ 3% 3% 3% 3% 7% 2. STORES 105, LUBRICATING OIL 170, SPARES 99, % 8% 5% 63% 5. REPAIRS AND MAINTENANCE 56, SURVEYS AND SERVICES 54, SAFETY AND RISK 54, GENERAL EXPENSES 57, CREW COSTS 2. STORES 3. LUBRICATING OIL 4. SPARES 9. MANAGEMENT FEE 136, TOTAL RUNNING COSTS 1,980,709 5, DOCKING/UPGRADE OTHERS 0 0 GRAND TOTAL RUNNING COSTS 1,980,709 5, REPAIRS AND MAINTENANCE 6. SURVEYS AND SERVICES 7. SAFETY AND RISK 8. GENERAL EXPENSES 9. MANAGEMENT FEE

7 Vessel Costs Vessel Cost Modern VLCC ($65m value / av daily hire $20k) 4% 8% 56% 20% 12% Interest Installments Opex Bunker Port cost - commision

8 Any Links??? 120 Equipment Failures & Damage Baltic Dry Index Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11

9 Crude oil price index 2003 > 2012 Indications are that an underlying ceiling of around 115 usd and a floor of around 100 usd for Brent Crude will prevail for the foreseeable future.

10 380 Cst HS fuel 2012

11 Lube oil Price trends 2006 > 2012 $250,00 Baltic Dry Index $200,00 $150,00 $100,00 $50,00 $0,00 Ιαν-06 Απρ-06 Ιουλ-06 Οκτ-06 Ιαν-07 Απρ-07 Ιουλ-07 Οκτ-07 Ιαν-08 Απρ-08 Ιουλ-08 Οκτ-08 Ιαν-09 Απρ-09 Ιουλ-09 Οκτ-09 Ιαν-10 Απρ-10 Ιουλ-10 Οκτ-10 Ιαν-11 Απρ-11 Ιουλ-11 Οκτ-11 Ιαν-12 Απρ-12 Ιουλ-12 Οκτ-12 LO price trends are heavily weighted by additive costs, not just base oil

12 Food price index 1990 > 2012 Weather incidents can have a major effect

13 The Big Mac Index Location and political issues.

14 External Factors Crew nationality and numbers. Trading Area Insurance Conditions Age and Condition of the vessel Type of vessel Charter terms & conditions Owner s Drydocking & Maintenance policies

15 What has improved Savings in the same period;- Specific Fuel consumption has reduced (although engines did get bigger). Specific Cylinder Oil consumption has dropped. >20% Spares, large items such as cylinder liners have dropped in real price. TBO s have increased. Crew numbers? (not much change) Docking intervals > more In Water Surveys.

16 The future >>> SEEMP Ballast water treatment system retrofits. Capex >1 million usd. Opex??? Low sulphur fuels; impact on Fuel costs Lube costs Exhaust Gas Scrubbers????? Maintenance Wear caused by changeovers. EU CO2 measurement project? Other New Regulations? ( Bio Fouling Management plans worldwide and USA Local Bio fouling rules? Will the EU go it alone?

17 The future >>> How can we use any of these as leverage to help. Energy Management is the most obvious ;- Real fuel saving. Real maintenance saving. Improved charter profile. Low cost entry point.

18 All OPEX budgets must be.. Competitive Any manager sells on a value-for-money proposition not a least cost one in a fiercely competitive marketplace Realistic based on all available information to hand including previous experience in running the same or similar ships Substantiated reasoning and assumptions must be clearly spelled out in order to explain the company s position.

19 Realism and communication It is essential that owners and managers communicate clearly to establish the target OPEX for the vessel. The onus for this is on both sides A clear understanding of the owners aspirations is required The owner needs a fair assessment of priorities for expenditure and the consequences of delaying. At the end of the day OPEX will probably trend upwards but working together we can ensure the rise is limited as far as possible.