*For the uninitiated - what lies below is the skeletal essence of the entire dry bulk industry. Beneath the thin layer of skin tissue remains the bones! Understand how to run 'good' voyage calculations and you understand 90 percent of what it means to be a shipowner, freight trader and a great broker (fixing machine).*

*The calculations may appear a little daunting at first but believe me if you take a day or so to work through some examples it will become much clearer in a very short time!*

*Having said that, voyage estimation is as much of an art as it is a science. I will be revealing some of those artisitc secrets to those who are up for it. Hang around!*++

Anyway back to the example at hand

Details including costs are approximate in todays market.

**Cargo details**45,000 / 10 percent Cement

Load: 1 Sa Kosichang Thailand

Discharge: Genoa Italy

Laycan 1-10 December

Load speed: 20,000 Satpmshex

Discharge Speed: 10,000 Shinc

2.5 percent adcom + 1.25 brokerage

**Vessel**

MV Jingo Jingo – Open Singapore 27 November

58,000 dwt SDBC on Draft 12.2 meter ssw

Speed and Consumption:

IFO (Fuel oil) 13.5 knots / 25mt (laden)

14 knots / 21mt (ballast)

MDO (Diesel Oil) 1.5mt at sea 1 mt in port

Other details that you need to collate

- Vessel delivery will take place dop Singapore.

- Vessels intake will be 49,500 mt bulk Cement

- Price of Bunkers: Spot Singapore prices IFO USD 423 / MDO USD 572 pmt

- Port Costs: Kohsichang USD 10,000, Genoa USD 55,000

- Miscellaneous expenses: USD 5,000

- Suez Canal cost: USD 203,000

- Suez canal Transit 1 day

- Net Daily Hire of the Ship (cost in the open market to charter a ship on a Time charter basis): USD 10,000 per day prorata.

- Loading will take: 3.12 days

- Discharging will take: 4.95 days

- Ballast Distance Singapore to Load port 865 NM

- Laden Distance 7,307 NM

- Repositioning leg distance 583 NM (reposition to Cape Passero)

- Extra Sailing Time allowed for bad weather: 1 day

- Turn Time 12 hours both ends

Task

Prepare a Voyage Estimate to find out the PMT (per metric tonne) freight rate for this cargo to break even for the owners.**Step 1. Calculate the Voyage duration**

A) Ballast leg = 865 nm/336 (14knots x 24 hours) = 2.57 days

B) Laden Leg = 7307 nm/324 (13.5knots x 24 hours) = 22.5 days

C) Repositioning Leg = 583 nm/336 (14 x 24 hours) = 1.74 days

Total Sailing days = 26.81

Plus days in port = 9.07 days (8.07 loading and discharging plus 1 day in total turn time)

Plus Bad weather = 1 day

Plus Suez transit = 1 day

Total estimated voyage Duration = 37.88 days**Step 2. Calculate the Bunker / Fuel Costs**

a) IFO (Fuel oil) ast sea

Ballast leg 21mt IFO per day x 2.57 days = 53.97mt

Laden leg 25 mt IFO per day x 22.5 days = 562.5 mt

Repo leg 21 mt IFO per day x 1.74 days = 36.54mt

Total cost: 653.01 mt x USD 423 = USD 276,223

b) MDO (Diesel oil) at sea 1.5 mt per day x 26.81 days = 40.22 mt

Total Cost: 40.22 x USD 572 = USD 23,006

c) In Port Consumption

9.07 days x 1 mt MDO = 9.07 Mt MDO x USD 572

Total Cost = USD 5,188.04

Total Bunker cost (A+B+C) = USD 304,417

**Step 3. Calculate TC in Costs (Chartered in Vessel Costs**)

USD 10,000 per day x 37.88 days = USD 378,800

**Step 4. Results**

Calculate Total Voyage Costs

1. Total Bunker cost USD 304,417

2. Port Costs USD 65,000

3. TC in Costs USD 378,800

4. Miscellaneous USD 5,000

5. Suez canal USD 203,000

Costs USD 956,217

Plus Commission

of 3.75 percent of Total Cost USD 35,858

Total Voyage Cost USD 992075

Break even freight rate required to perform this voyage:

USD 992,075 / 49,500 mt cargo = USD 20.04 mt

**Final Result (Freight rate needed) = USD 20.00 per metric tonne (rounded)**

**(disclaimer - this example is for teaching purposes only and readers should not rely on the accuracy or otherwise of the information provided for any other purpose other than to learn the estimation process) **

Hi Vs,

ReplyDeleteDoes this software provide also actual laytime/demurrage calculations ???

Best regards

Nope - Just a voyage calculation

ReplyDeletethanks dude,

ReplyDeleteright back at ya dude!

ReplyDeletewhy include hire rate of 10000 $ / mt as TC costs as for owners it will be earnings from Charterers.( I mean this exampe is from the view of the ship owner)

ReplyDeleteI dont 100 percent understand the question but I will try and answer. The tc hire rate in a voyage calculation represents 'the tc market rate' of the ship. The idea of a voyage calc is to find the voyage rate equivalent!...

ReplyDeleteHope this helps.

nice and thanks:-)

ReplyDeletehow do you calculate days in port when sshex?

ReplyDeleteHow do you calcylate days in port sshex?

ReplyDeleteAnswer - easy, with my voyage calculation software!

I am a student and have to calculate it manually, anyway, thanks for your quick response.

ReplyDeleteIs there miscalculation in above Voyage Estimation?

ReplyDeleteIFO+MDO for one extra trip day- bad weather?

MDO for 1 day congestion in Suez?

Thank you in advance for your reply.

Is it possible to have a trial period to test the program?

ReplyDeleteWhat does "Repositioning leg distance" mean?

ReplyDeleteThanks in advane.

If the ship finishes discharging in an area where their are no cargoes then the shipowner may want to factor in a repositioning leg which basically means ballasting to an area where there are lots of cargoes.

ReplyDeletehope this helps.

HI!

ReplyDeleteI can not understand why you have included the daily hire (10.000$) in the cost.Why is this owner's cost?

I'm a little confused, how the Time-Charter Equivalent and Voyage estimation are connected?

thnks!

Hi

DeleteThe daily hire is not a cost - its a benchmark. The prupose of a voyage calculation is to work out the per metric tonne (eg USD 32.00 pmt) freight rate for a piece of business. This per metric tonne rate is a function of two things

1. Cost and

2. The time charter rate (daily) rate for this ship in the open market.

Think of ships like houses. The price of a house is not really a function of the cost to build it (although it sometimes is). Its a function of what someone is willing to pay for it (on the open market).

So you need to 'plug in' the daily hire rate so that you can 'convert' the calculation to a meaningful voyage (per metric tonne) answer..

Its a difficult process to understand if you have never done it before. Do a few and you will start to realise how it works

cheers

vs

Hi,

DeleteThe owner cost must add because the investment for ship, Management cost, Depreciation, Finance, Interest, Insurance Ship Stores, Repairs Etc are Included.

if the vessel is not taken for tc is it needed to add tc cost for voy calculation??

ReplyDeletethis has helped me so much. since I,m doing a course in Brokering and Chartering. Bless

ReplyDelete1. Why not including bunkers for Suez and for bad weather? 1 day extra per has been taken into consideration for voy time but not for bunkers/MDO. A ship will naturally use more bunkers due to bad weather and the time charterer must cover bunkers expenses.

ReplyDelete2. Since the ballast leg to loading port is included in the voy cost it means that the ship is hired from the port before loading port. However, the laycan does not start before 01 dec. I think that the waiting time prior to laycan (27nov-01dec) should be included in the total voyage time and therefore increase the break even amount.

Why not including wating time for laycan in total voyage time when you are including the sailing dist to laod port

Hello , I have a question about the estimation.You calculate the commission(3.75%) after you sum up all the costs.I am pretty sure that in the voyage calculator in my job it calculates the commission (e.g TC cost:378.800USD * 3.75%=bla bla) what is wrong and what is right?

ReplyDelete