Container shipping companies report that vessel operating costs have risen at their fastest pace in over a decade this year, on the back of higher insurance cover premiums and COVID-19 related expenses. Average daily operating costs jumped 4.5% in 2020, compared to underlying increases of 2% and 2.5% respectively in the previous two years.
Manning costs were particularly impacted, climbing 6.2%; hull and machinery (H&M) and protection and indemnity (P&I) insurance cover costs jumped 4.5%; stores & spares and repair & maintenance cost inflation is around 3%; the dry-docking spend leapt 5%.
These costs are expected to moderate in subsequent years as the pandemic related expenditure unwinds. Looking ahead, however, trading conditions are expected to remain challenging, dominated by COVID-19 induced trade uncertainties along with continued overcapacity in many sectors.
An estimated 400,000 seafarers from across the globe are now stranded on ships, continuing to work months beyond their contracted time, but unable to be relieved, with increasing reports of severe fatigue and mental distress, in a crew-change crisis which threatens trade and maritime safety.
A similar number of seafarers are trying to join ships to begin contracts, but transit to and from vessels is being thwarted by travel restrictions and limitations imposed due to the pandemic.Â
Individual crew changes are now costing up to an additional US$2,000, doubling the price since last year, based on a survey of 1,276 crew changes on carriers engaged in world-wide trade. The additional costs stemming from the pandemic include items like hotel accommodation, airfares, PCR testing, and reimbursements for personal protective equipment.
For all the above reasons, shippers can expect to see the price hikes reflected in freight rates in 2021.
Contact us here at Colless Young if you have any queries regarding shipments, whether containerised or bulk cargo, and freight rates. We are International Freight Forwarders and Licensed Customs Brokers. Colless Young is based in Brisbane and offers professional advice on air and sea freight through all Australian ports and airports. Our services cover every aspect of logistics, including exports, and clearance of import consignments through customs and quarantine, warehousing and trucking.
