Ship exploatation cost estimation

[JoshTruman]

Good day Sirs,
Could you suggest any good book regarding ship exploatation cost estimation?
Or any software for this purpose?

 

[jehardiman]

I am unaware of any east european text on the subject. In the US there is SNAME's Ship Design and Construction, but it is a very broad text. Generally, planning and estimating (what this is), it is an "in house" learned topic. While several governments have guidance documents for their project managers and shipyards have whole departments devoted to it, how it actually gets done is much more a smokey backroom poker game.

Generally speaking, the cost estimation is broken up into 4 parts...design, the hull, machinery, and outfitting. Design costs are widely variable, from large costs for new technology or artistic/styling breakthroughs, to basically nothing for building another hull of an existing design. The hull, on the other hand, is purchased like ground meat; leveraging previous known market costs. So many tons of steel and paint costs x, requiring so many man hours at y to fabricate, assemble, weld, and paint. For machinery it is relatively simple; you get the vendors cost and either an associated cost to install by the vendor (common) or previous known man-rate. Finally, outfitting is broken down into services and finish, with finish being the biggest variable. Services is installing all the pipes, electrical, and accommodations as required. However, the required finish dictates the overall costs of installing services. This cost as a total portion can be as small as 10-15% of total costs for a coastwise fishing boat with pipes and cabling running on painted steel, too 60-70% of overall cost for cruise liner or yacht where everything is hidden behind walnut paneling. Rough rule of thumb for commercial shipbuilding is, that excluding design, 1/3 of the project cost is hull fabrication and 2/3 is machinery and finish.

 

[TANSL]

I'm afraid the OP is looking for information on the operating costs of a vessel (not building costs).
If he wants to get an answer that is useful he should specify the type of vessel, size, .... and the more information he gives us, the better answer he will get.

 

[Pablo Sopelana]

Hi Josh,

Although the following books don't focus exclusively on the subject of ship running cost estimation, they could, however, help you to some extent:

1) Martin Stopford's book, "Maritime Economics."

Part 3 (I have the 3rd edition) is dedicated to "Shipping Company Economics." In chapter 6, "Costs, Revenue and Cashflow," you will find section 6.3 dedicated to "The cost of running ships." These costs are divided into:
- Operating costs (crew, stores & consumables, repairs & maintenance, insurance, general costs)
- Periodic maintenance (routine maintenance, breakdowns, spares)
- Voyage costs (fuel oil, diesel oil, port charges, canal dues)
- Cargo-handling costs (loading, discharge, claims)
- Capital costs (interest/dividend, debt repayment)

There, besides the explanations, you will also find some tables with estimations based on data for some types of ships.

2) If it happens, you can read Spanish, another book is IME's (Instituto Marítimo Español) "Economía del Sector Marítimo."

In part II (I have the 1st edition), "Teoría Económica Marítima," you will find chapter 7 dedicated to the costs of running ships ("La cuenta de explotación del buque"). There, costs are divided into:
- Capital costs (amortization, interests)
- Fixed costs (crew, insurance, maintenance & repairs, general costs)
- Variables costs (fuel, port, cargo-handling, canal dues)

The book explains all these concepts in detail and provides some examples and tables. But again, be aware this book is in Spanish.

3) Another book is "Shipping Derivatives and Risk Management" written by Amir H. Alizadeth and Nikos K. Nomikos.

Chapter 2 (I have the 1st edition) is dedicated to "Introduction to Shipping Markets." Section 2.5, "Definition and Structure of costs in Shipping," divides the costs into:
- Capital costs
- Operating costs
- Voyage costs
- Cargo-handling costs

This book explains in much less detail than the other two above the different concepts, although there is also some interesting information, such as a figure indicating the shipowners' cost allocations under different charter contracts (voyage, CoA, time-charter, bareboat).

I hope this helps!

 

[jehardiman]

I'm afraid the OP is looking for information on the operating costs of a vessel (not building costs).
If he wants to get an answer that is useful he should specify the type of vessel, size, .... and the more information he gives us, the better answer he will get.

Ok so "extrapolation" vice "exploatation"
cf:
ex·ploi·ta·tion /ˌekˌsploiˈtāSH(ə)n/ noun

1. the action or fact of treating someone unfairly in order to benefit from their work. "the exploitation of migrant workers"
2. .the action of making use of and benefiting from resources. "the Bronze Age saw exploitation of gold deposits"

ex·tra·po·la·tion /ikˌstrapəˈlāSH(ə)n,ekˌstrapəˈlāSH(ə)n/ noun

1. the action of estimating or concluding something by assuming that existing trends will continue or a current method will remain applicable. "sizes were estimated by extrapolation"

 

[TANSL]

@jehardiman, I cannot but agree with what the dictionary of the English language (or dictionary of whatever) says. But I really don't understand what all those great definitions have to do with my post. Thanks in advance for explaining it to me.

 

[JoshTruman]

I'm afraid the OP is looking for information on the operating costs of a vessel (not building costs).
If he wants to get an answer that is useful he should specify the type of vessel, size, .... and the more information he gives us, the better answer he will get.

Yes, I am looking for estimation of running cost of chartered or owned bulk carriers, (cost of credit, cost of voyage, cost of complemet, cost of freight, cost of stores and maintanance and so on - all of these costs have to be cassified in some manner) Rather to calculating it by self its better to use some form , flow chart or something like this way. Maybe some approximated function based on DWT of bulk carrier?

 

[JoshTruman]

Hi Josh,

Although the following books don't focus exclusively on the subject of ship running cost estimation, they could, however, help you to some extent:

1) Martin Stopford's book, "Maritime Economics."

Part 3 (I have the 3rd edition) is dedicated to "Shipping Company Economics." In chapter 6, "Costs, Revenue and Cashflow," you will find section 6.3 dedicated to "The cost of running ships." These costs are divided into:
- Operating costs (crew, stores & consumables, repairs & maintenance, insurance, general costs)
- Periodic maintenance (routine maintenance, breakdowns, spares)
- Voyage costs (fuel oil, diesel oil, port charges, canal dues)
- Cargo-handling costs (loading, discharge, claims)
- Capital costs (interest/dividend, debt repayment)

There, besides the explanations, you will also find some tables with estimations based on data for some types of ships.

2) If it happens, you can read Spanish, another book is IME's (Instituto Marítimo Español) "Economía del Sector Marítimo."

In part II (I have the 1st edition), "Teoría Económica Marítima," you will find chapter 7 dedicated to the costs of running ships ("La cuenta de explotación del buque"). There, costs are divided into:
- Capital costs (amortization, interests)
- Fixed costs (crew, insurance, maintenance & repairs, general costs)
- Variables costs (fuel, port, cargo-handling, canal dues)

The book explains all these concepts in detail and provides some examples and tables. But again, be aware this book is in Spanish.

3) Another book is "Shipping Derivatives and Risk Management" written by Amir H. Alizadeth and Nikos K. Nomikos.

Chapter 2 (I have the 1st edition) is dedicated to "Introduction to Shipping Markets." Section 2.5, "Definition and Structure of costs in Shipping," divides the costs into:
- Capital costs
- Operating costs
- Voyage costs
- Cargo-handling costs

This book explains in much less detail than the other two above the different concepts, although there is also some interesting information, such as a figure indicating the shipowners' cost allocations under different charter contracts (voyage, CoA, time-charter, bareboat).

I hope this helps!

Many thanks for your messeg - I will check.

 

[Pablo Sopelana]

Many thanks for your messeg - I will check.

My pleasure! I hope the information helps you and could put you on a good track that will eventually lead you to find the information you seek. Good luck!