Moore Stephens says operating costs on rise

   Vessel operating costs are expected to rise by 3.8 percent in 2011 and by another 3.7 percent in 2012, according to a new survey by international accountant and shipping consultant Moore Stephens.
   The survey, based on responses from key players in the international shipping industry, predominantly shipowners and managers in Europe and Asia, identified lube expenditure and crew costs as the categories most likely to produce the highest levels of increase.
   Crew wages, meanwhile, are expected to increase by 3.1 percent in both 2011 and 2012, while the cost of spares is expected to escalate by 2.7 percent and 2.6 percent, respectively.
   Expenditure on stores, meanwhile, is expected to increase by 2.5 percent in each of the two years, while the cost of repairs and maintenance is expected to increase by 2.8 percent and 2.6 percent in 2011 and 2012, respectively.
P&I costs for those two years was estimated by respondents at 2.4 percent and 2.3 percent respectively.
   “Bunkers and lubes are our biggest cost,” said one survey respondent, while another said that the cost of bunker is “unrealistically high.”
   “There is no reason for that,” the respondent added. “If the price of bunkers remained at a reasonable level, shipowners would not be struggling in the way they are at the moment.”
   A number of respondents expressed concern about overcapacity and the weakness of rates in the freight and charter markets.
   “Ship operating costs increased by an average of 2.2% across all the main ship types in 2010,” said Moore Stephens shipping partner Richard Greiner. “And it is no surprise that our latest survey anticipates that costs will rise in both 2011 and 2012.
   “These projected increases are nowhere near the increases we saw in the 2000s,” he added. “They point to a less volatile period for operating costs. But any increase in costs is going to be a problem for a shipping industry struggling with overtonnaging, declining freight rates, and the cost of regulatory compliance and environmental accountability. Add to that the continuing economic and political problems which form the background to shipping’s operating arena, and you can see that the industry is not going to be for either the faint-hearted or the short-termist.”