Drewry: Opex Costs Continue to Rise


Average vessel operating costs have risen for the second year in succession following two years of “marked declines”, according to Drewry’s Ship Operating Costs Annual Review and Forecast 2018/19.

The shipping consultancy’s report reveals that the growth of ship operating costs, in 2018, has been fuelled by the uncertain recovery in freight markets across most cargo sectors.

“Opex costs” are largely affected by developments in the overall shipping market, as some costs like insurance are directly connected to asset values.

Drewry estimates that average daily operating costs, across 46 different ship types and sizes, rose by 1.1% in 2018, an increase upon 2017’s rise of 0.7%.

Neil Davidson, of Drewry, discusses retrofit terminal automation in a recent Port Technology technical paper

In addition to this, 2018 marked the first period in a decade that expenditure rose across all five main opex cost heads, an inflection point for the future direction of ship operating costs.

Earlier years, according to Drewry, witnessed sharp reductions in opex costs, as the depressed state of shipping markets forced operators to slash their spending.

However, the recovery of freight markets in 2017 decreased the pressure on shippers to reduce expenditure, prompting a rise in operating costs.


Credit: Drewry's Ship Operating Costs Annual Review and Forecast 2018/19


Martin Dixon, Director of Research Products at Drewry, said: “This trend continued into 2018, with a modest acceleration in cost inflation.

“Manning costs rose having previously stagnated, while insurance spend increased for the first time in six years on recovering asset values and insurance market hardening.

“Similarly, expenditure on stores and spares rose as earlier cost-cutting opportunities waned, and repair & maintenance costs climbed as regular spend resumed on recovering freight markets.”

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