Baltic to offer operating cost assessments

Sep 13 2019

The Baltic Exchange has launched a vessel operating cost index.

Initially covering a range of drybulk vessels, the service will also be expanded to tankers and other sectors.

The Baltic Operating Expense Index (BOI) will be published quarterly and is based on assessments from three independent third-party shipmanagement companies - Anglo-Eastern, Columbia Shipmanagement and Fleet Management.

Collectively, they manage a fleet of over 1,800 vessels. Other companies are expected to join the panel in the future and a residual price calculation will be added later this year.

Baltic Exchange CEO, Mark Jackson, explained: "The Baltic Operating Expense Index is intended to provide transparency to the fluctuations in running costs. Daily operating costs are one of the variables used by shipping investors to calculate the profitability and residual value of their assets. We already provide independent freight, sale & purchase and recycling assessments. With the addition of operational expenses assessments, shipping investors now have a complete toolkit to manage their risk and aide their decision process."

Each panel member will submit four numbers, expressed in US dollars per day. Three will be combined to produce the BOI:

·         Crew (USD per day, including all fees).

·         Technical ((USD per day, including all fees).

·         Insurance (USD per day, including all fees and rebates).

The fourth, an assessment of a five year drydocking cost, will be amortised over five years to give a US dollar per day price, but published separately and will not contribute to the BOI.

Assessments will be provided quarterly. The 4Q18 and 1Q and 2Q19 assessments will be available following a recent trial, while 3Q19 assessments will be published on 17th October.

The assessments will be available on to subscribers to Baltic Exchange market information services.


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