Spefically, the following three categories account for the majority of shipping costs:
- Capital costs (i.e. the capital cost of purchasing or leasing vessels together with interest payments and depreciation);
- Operational costs (i.e. those incurred when a ship is put into service)
a. Crew (i.e. labour costs, training etc.)
b. Insurance (i.e. marine insurance to cover both the vessel and cargo)
c. Other (i.e. routine repairs and maintenance, ship registration
- Voyage costs (i.e. fuel, port charges and other voyage specific costs).
The study's results are applicable to long-distance trades like iron ore exports from Brazil to China.
This study focuses on bulk carriers only. Yet, the results are likely hold true for most other ship types too, which are engaged in comparable trades.
The results were conducted by the assessment of three scenarios, consisting of Handysize bulk carrier, Panamax bulk carrier and a Capesize bulk carrier.
In each of the above scenarios, adopting higher speed reductions extends the number of days at sea, resulting in additional bulk freight costs.
Yet, the study presents that these additional bulk freight costs are offset by the lower fuel costs in the majority of the scenarios, unless the fuel price is very low or a ‘break-even point’ speed reduction is exceeded where the marginal fuel cost reductions no longer offset the marginal operational cost increases under slow steaming.
In addition, the study resulted to the fact that the impact of slow steaming in smaller vessels as handysize bulk carriers, is less in comparison to larger vessels.
Concluding, for more information on the study you may click on the PDF herebelow