The re-routing of merchant ships around Cape of Good Hope instead of crossing the Bab-al-Mandab has not only led to significant changes in trade patterns and tonne-mile demand, but has also resulted in certain operational challenges, especially regarding the procurement of certain Stores and Spares items. The Port of Suez had been used as a main procurement hub by many vessel operators crossing the Suez Canal with their ships before re-routing. For these operators, the current number one alternative is South Africa, where prices can be significantly higher, albeit – as usual – depending on fleet size and existing relationships with sellers among else.
Yet, the level of Stores and Spares cost increases seen in 2024 across the global vessel fleet (estimated 5.4% and 5.5%, respectively) cannot be justified exclusively by the above. Based on Drewry’s annual survey of ship operating costs, cost increases did not only occur to those with vessels re-routing around Africa. After a few years with low growth in costs due to operators delaying repairs and procurement, a pick-up was expected following the strong price increases in the 2021/22 period. Since then, prices have decreased only slightly and even increased in some instances amidst the current shipbuilding boom.
On top of the current trend described above, further geopolitical issues and regulations, and the resulting supply chain bottlenecks would facilitate the potential for a significant upside risk for most ship operating costs.
Ship Operating Costs Annual Review and Forecast 2024/25
One of Drewry’s flagship reports, Ship Operating Costs 2024/25 provides one of the most complete annual assessments of ship operating costs available in a single source. Operating cost assessments are provided for 47 representative ship types and sizes, spanning the container, dry bulk, oil (crude and products), chemical, LNG, LPG, general cargo, reefer, ro-ro and car carrier sectors.
The report also includes detailed data and analysis of cost trends and forecasts for each of the main cost heads of: manning; insurance; stores & spares; lubricants; repairs & maintenance and dry docking; and management & administration. It also provides in-depth explanation of operating cost variances by ship type and age of vessel.
