CREW costs were said to be the main factor for the overall increase in operating costs in 2011, according to the findings of OpCost 2012, the annual ship operating costs report by accountant and shipping consultancy Moore Stephens.
"OpCost 2012 contains both good and bad news. The bad news is that costs continue to rise. The good news is that costs are not rising as fast, or as steeply, as they were three or four years ago," said Moore Stephens partner Richard Greiner.
The latest OpCost 2012, the 12th yearly report, includes data from more than 2,700 ships, a record number.
Overall, annual operating costs rose 2.1 per cent in 2011 industry wide, compared to the 2.2 per cent average increase the year before.
OpCost 2012 reveals that total operating costs for the three main tonnage sectors covered - bulkers, tankers and containerships - all experienced an increase in 2011. Both the bulker and tanker indices increased by three index points (or 1.7 per cent) year on year, while the containership index (with a 2002 base year, as opposed to 2000 for the other two vessel classes) was up five index points, or 3.1 per cent.
The corresponding figures in last year's OpCost report showed increases in the bulker, tanker and containership indices of five, two and three points respectively. In 2011, crew costs increased 3.3 per cent year on year after a 21 per cent increase. For containerships, the average increase in crew costs was 3.4 per cent in 2011 compared to 2.9 per cent in 2010, with smaller vessels (up to 1,000 TEU) paying 3.9 per cent more than last year.
Operators of larger dry cargo ships (above 25,000 dwt) and of smaller LPG carriers (between 3,000 and 8,000 cbm) experienced the biggest increase in crew expenditure - 6.7 per cent in each category. Meanwhile, tankers experienced increases in crew costs of 2.2 per cent on average, compared to 2.7 per cent in 2010.
For bulkers, the overall increase in crew costs was 2.8 per cent against the four per cent in previous year, with the operators of panamax bulkers paying 5.4 per cent more than in 2010. Said the company's news release: "Once again, it was an increase in crew costs which was the headline figure for the industry in 2011. The average overall increase in crew costs was in fact marginally down on the figure for 2010.
This may be a reflection of the economic climate, and a consequence of more companies going out of business and more ships going into lay-up. But while crew costs remain the single biggest contributor to higher operating costs, they are still modest in comparison to some of the hefty increases posted in earlier years. Investing in good people is a must for the shipping industry, and will justify the price tag in the long term."
For repairs and maintenance, an overall 1.1 per cent decline in costs was recorded, compared to the 4.5 per cent increase for 2010.
"The only category of tonnage to show an increase here was containerships, where repairs and maintenance costs were up by 3.7 per cent. There was no overall increase in these costs in the tanker sector, and a 1.9 per cent fall in such expenditure for bulkers," said the report.
OpCost 2012 revealed a 2.7 per cent increase in the level of stores spending, after two successive years of declining expenditures.
"Some of the biggest increases here were in the tanker sector. Suezmaxes spent 5.5 per cent more on stores than in the previous year, and Aframaxes 5.4 per cent more. Panamaxes, where the stores spend was down by 2.4 per cent, were the only category of tanker to show black ink. And there was no black ink at all for stores in the gas market, with operators of LPG carriers of between 70,000 and 85,000 cbm paying 6.5 per cent more compared to 2010," said the report.
Expenditure on insurance decreased overall by 1.5 per cent, following a 4.7 per cent fall in 2010. For containerships, it was more of a mixed picture. The larger containerships paid 0.7 per cent less for their insurance in 2011, but operators of smaller box ships paid 3.5 per cent more. However, the insurance cost was down for bulkers by 4.5 per cent and for tankers by 3.4 per cent. All categories of bulkers and tankers paid less for their insurance than they did in 2010.