The 2015 figure fell by an average of 2.4%, compared with the 0.8% average fall in costs recorded for 2014.
Last year, all categories of expenditure were down on those for the previous 12-month period. This suggested continued pragmatic management of costs by shipowners and operators, as well as a reduction in active trading for some owners, as a result of the prolonged worldwide economic downturn, the company said.
The findings were published in OpCost 2016, Moore Stephens’ ship operating costs benchmarking tool, which revealed that that total operating costs for the tanker, bulker and containership sectors were all down in 2015, the year covered by the study.
On a year-on-year basis, the tanker index was down by 4 points, or 2.2%, compared with a two point fall in 2014.
There was a 1.2% overall average fall in 2015 crew costs, compared to the 2014 figure, which itself was 0.1% down on 2013. By way of comparison, the 2008 report revealed a 21% increase in this category.
Tankers overall experienced a fall in crew costs of 1.3% on average, compared to the 0.4% fall recorded in 2014. All categories of tankers reported a reduction in crew costs for 2015 with the exception of Panamaxes and VLCCs, which recorded increases of 1.4% and 1.2% respectively, compared to reductions for 2014 of 2.2% and 0.6%. The most significant reduction in tanker crew costs for 2015 was the 3.6% recorded by product tankers.
Expenditure on stores was down by 4.3% overall, compared to the fall of 2.4% in 2014. For tankers, the overall reductions in stores costs were 4.3%, compared to the corresponding figures of 0.7% for 2014. The only rise in stores expenditure by any category of vessel was the 1.5% increase recorded by tankers in the 5,000 -10,000 dwt bracket.
There was an overall fall in repairs and maintenance costs of 4.3%, compared to the 0.6% reduction recorded for 2014. In the tanker category, only VLCCs recorded increased expenditure on repairs and maintenance, of 0.1%.
The overall drop in costs of 3.2% recorded for insurance compares to the 0.4% fall recorded for 2014. Product tankers and tankers 5,000 - 10,000 dwt were the only vessels in the tanker category to pay more for their insurance in 2015 than in the previous year, to the tune of 1.3% and 0.6% respectively.
The biggest increase in insurance costs, however, was the 2.6% recorded by LPG carriers in the 10,000 - 40,000 cu m range. Perversely, gas carriers are historically regarded as among the safest vessels afloat, perhaps reflecting the effect on premium levels of the cost of potential claims rather than the legacy of claims records.
Richard Greiner, Moore Stephens Partner, Shipping & Transport, said: “This is the fourth successive year-on-year reduction in overall ship operating costs. The reduction is three times that recorded 12 months ago, and a reduction at this level had not been widely anticipated.
“The fall in operating costs is likely to be due in part to continuing good husbandry in a difficult operating environment for many, and partly to an extremely difficult market and wider economic climate.
“The biggest cost reductions were predictably those in the stores and repairs and maintenance categories. Falling world oil prices continued to have a knock-on effect on lube oil costs in 2015, while increasing numbers of owners were looking to strategic short-term lay-up rather than spending on maintenance and repair.
“The fall in crew costs arguably came as more of a surprise to an industry, which has over the years absorbed increases of this type in excess of 20% and lived to tell the tale, but it was doubtless largely a consequence of reduced levels of trading.
“The fall in insurance costs, meanwhile, will come as no surprise to anybody in the light of warnings from the London market that hull rates for many major fleets continue to reach new lows.
“Last year was a particularly difficult one for shipping. Confidence reached its lowest level for seven years, according to the Moore Shipping Confidence Survey. Operators were not overly optimistic about making new investments in the short-term, while finance costs were predicted to rise.
“Nobody was expecting good news on drybulk freight rates and the outlook for tanker and containership earnings was little better. The Baltic Dry Index, meanwhile, was getting ready to plumb the depths. It was not an auspicious time to be planning new ventures; rather, it was a time for taking stock. In short, for many, it was a time for keeping operating costs to a minimum.
“Against a background of declining confidence in 2015, oil prices were on a steady downward trend, and the slowdown in the Chinese economy was becoming increasingly evident. Neither of these factors was wholly good news for shipping and both, in different ways, served as a brake on 2015 operating costs.
“A fall in operating costs is good news for shipping, particularly at a time when earnings from the freight market, for many, are so disappointing. But the portents are not so encouraging. Oil prices are predicted to start recovering significantly in the second half of 2017, while the price of steel, the bedrock of the shipbuilding industry, could increase much sooner. The cost of manpower, meanwhile, is only likely to move in an upward direction under the terms of the Maritime Labour Convention 2006.
“While the Ballast Water Management Convention still seemed a long way away from entering into force in 2015, it wasn’t! Now the convention has been ratified, the cost of trying to achieve compliance should become clearer over the next 12 months, as should the cost of making shipping safer and more secure against threats from the likes of cyber-attacks and fraud.
“In conclusion, shipping can draw some comfort from a fourth successive annual fall in operating costs. But it should remember that costs can move both ways. OpCost records that, at year-end 2001, for example, the average daily operating cost for a Handymax bulk carrier was $3,578. In 2015, it was $5,604. For a Suezmax tanker, the comparable figures are $4,916 and $9,170.
“The indications from the freight markets are that shipping is still selling itself too cheaply. Inflationary pressures on operating costs will remain, so maintaining the status quo will not be a viable option. For many, the freight markets will remain challenging and so to remain competitive, shipowners need to continue to improve efficiency, innovate with new technology and harness the considerable benefits of ‘big’ data without delay, ” Greiner concluded.