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Beleaguered ship owners received no let-up this week as shipping accountants and consultancy firm Moore Stephens published figures showing likely rising trends in ship operating costs this year and next. Costs have continued to climb across the board through the course of 2011, according to Moore Stephens, and are likely to register an average 3.8% hike for all main ship types by the year end. This figure compares with 2.2% in 2010. Costs are likely to continue rising through 2012, the survey predicts, with a similar increase of 3.7% expected over the year.

Moore Stephens received responses from no fewer than 351 respondents, mostly in Europe and Asia. Owners and managers represented the single largest contact group – 71% in total and 39% and 32% respectively – whilst charterers/operators, brokers and professional advisors also responded to the survey.

Repairs and maintenance are likely to have risen by an average of 2.8% in 2011, according to the respondents, and are projected to climb by a further 2.6% over the next year. Drydocking costs, meanwhile, will probably have risen by an average of 2.4% this year and are likely to rise by a similar amount over 2012. Large increases of 3.1% in crew wages in each of 2011 and 2012 bear out the tight demand supply balance of seafarers while a 3.6% hike in lube oil costs and a further 3.1% next year reflect continuing high oil prices.

A number of respondents to the survey were gloomy about shipping’s general outlook. They were concerned about overtonnaging and weak rates in the freight and charter markets. “Overcapacity and new building deliveries involving larger tonnage on the main routes will maintain downward pressure on rates,” commented one, whilst another noted that there was “no sign of resolving the overtonnaging problems in the dry bulk sector.” These pressures and “depressed charter rates will lead owners to seek in vain to minimise operating costs,” another commented.

Moore Stephens’ shipping partner Richard Greiner commented on the survey results. “Ship operating costs increased by an average of 2.2% across all the main ship types in 2010. And it is no surprise that our latest survey anticipated that costs will rise in both 2011 and 2012. These projected increases are nowhere near the increases we saw in the 2000s,” he said. “They point to a less volatile period for operating costs.”

“But any increase in costs is going to be a problem for a shipping industry struggling with overtonnaging, declining freight rates, and the cost of regulatory compliance and environmental accountability. Add to that the continuing economic and political problems which form the background to shipping’s operating arena, and you can see that the industry is not going to be for either the faint-hearted or the short-termist,” he added.

Other sources believe the increases in repair costs would have been greater had the level of drydocking activity not fallen during the course of 2010. Owners and operators spun out intermediate surveys wherever they could, experts point out, and in the face of rapidly declining earnings, reduced work scopes to undertake only the bare essentials of repairs and maintenance. This reduced level of activity continued over the first half of 2011 although recent feedback suggests that repair volumes have risen again since around the middle of the year.

Some experts also suggest that owners and operators could be surprised to find larger-than-expected rises in repair costs over the next two years, with significantly larger increases than those suggested in the Moore Stephens survey. They point out that significant ship delivery volumes in 2007 will translate into more special surveys during 2012, establishing a trend that is likely to continue each year until 2015, in each case five years on from rapidly climbing delivery volumes from 2007 onwards.