Total annual operating costs in the shipping industry fell by an average of 2.4% in 2015, compared with the 0.8% average fall in costs recorded for 2014, representing the fourth successive year that the operating costs were in decline, according to shipping consultant Moore Stephens.
All categories of expenditure were down for the previous 12-month period. This suggests continued pragmatic management of costs by ship owners and operators, as well as a reduction in active trading for some owners as a result of the prolonged worldwide economic downturn.
The total operating costs for the tanker, bulker and container ship sectors were all down in 2015. On a year-on-year basis, the tanker index was down by 4 points, or 2.2%, while the bulker index fell by 6 points, or 3.6%. The container ship index, meanwhile, was also down by 6 points, or 3.7%.
There was a 1.2% overall average fall in 2015 crew costs, compared to the 2014 figure. Tankers overall experienced a fall in crew costs of 1.3% on average. All categories of tankers reported a reduction in crew costs for 2015 with the exception of Panamaxes and VLCCs, which recorded increases of 1.4% and 1.2%, respectively. The most significant reduction in tanker crew costs for 2015 was the 3.6% recorded by product trankers.
For bulkers, meanwhile, the overall average fall in crew costs in 2015 was 1.1%. The operators of Handysize bulkers paid 2.3% more on crew costs than in 2014, but the operators of other categories of bulker paid less, in the case of Panamax bulkers to the tune of 3.2%.
Expenditure on crew costs was down 3.3% in the container ship sector. The biggest fall in crew costs in this category was the 3.6% reduction recorded for vessels of between 2,000 and 6,000 TEU.
“This is the fourth successive year-on-year reduction in overall ship operating costs. The reduction is three times that recorded 12 months ago, and a reduction at this level had not been widely anticipated,” Richard Greiner, Moore Stephens Partner, Shipping & Transport, said.
He added that shipping can draw “some comfort” from a fourth successive annual fall in operating costs, but that it should remember “that costs can move both ways.”
“The indications from the freight markets are that shipping is still selling itself too cheaply. Inflationary pressures on operating costs will remain, so maintaining the status quo will not be a viable option. For many, the freight markets will remain challenging and so to remain competitive, shipowners need to continue to improve efficiency, innovate with new technology and harness the considerable benefits of ‘big’ data without delay,” Greiner noted.