Annual operating costs in shipping industry fall by 1.8% in 2012: Moore Stephens report

30 September 2013 (Last Updated September 30th, 2013 18:30)

The annual operating costs in the shipping industry fell by an average of 1.8% in 2012, compared to 2.1% rise in costs recorded in 2011, according to a new report, OpCost 2013, by international accountant and shipping consultant Moore Stephens.

The annual operating costs in the shipping industry fell by an average of 1.8% in 2012, compared to a 2.1% rise in costs recorded in 2011, according to a new report, OpCost 2013, by international accountant and shipping consultant Moore Stephens.

The decrease in annual operating costs during the year was mainly due to ship owners focusing on cost management.

The operating costs of all the three main tonnage sectors including bulkers, tankers and container ships were covered in the survey.

The bulker index was down by 3.9%, the tanker index by 3% and the container ship index by 1.8% on a year-on-year basis.

In the tanker segment, Aframaxes reported an overall fall of 5.2% in crew costs, while Suezmaxes and product tankers crew fell by 4% and 3.8%, respectively.

The 3,000cbm-8,000cbm LPG carriers and Panamax tankers were the only tankers with increased crew costs, where costs were up by 5.2% and 2.8% respectively.

For bulkers, the overall average fall in crew costs was 0.5% in 2012, compared to a 2.8% rise reported in the previous year.

Handysize bulkers and bulkers in the 10,000-20,000dwt range reported crew cost reductions of 4.8%.

The overall fall in costs for repairs and maintenance was 1.9% in 2012, as against a 1.1% increase reported in 2011.

The largest drop in operating costs was recorded for insurance, down by 6.2%.

Moore Stephens partner Richard Greiner said "There is a lot of red ink in costs, which actually translates into black ink in the bottom line for owners.

"It is no coincidence that, during the operating period covered by OpCost 2013, confidence levels in the shipping industry dropped to their lowest point in the past five years, according to the Moore Stephens Shipping Confidence Survey," Greiner added.

"So it is unsurprising to find that expenditure declined. The industry generally was under extreme pressure during an extended global economic downturn and attending to items of manageable cost control was an imperative at a time when revenues were declining.

"The fall in operating costs recorded in OpCost 2013 is good news for owners and operators. So, too, is the fact that the global economic outlook is starting to look brighter."