Trans RINA, Vol 161, Part A4, Intl J Maritime Eng, Oct-Dec 2019


Fuel costs are another example. Because different types of bunker products are used in various markets, shipping carriers must consider not only the substantial price difference between fuel and diesel oil (see Table 3), but also the fact that different types of ships with considerably varied carrying capacity consume similar amounts of oil. Therefore, the fuel cost per unit shipped (TEU or deadweight tonnage) varies substantially for different ship types (Tai & Lin, 2016; Chang & Wang, 2010). To construct an effective cost comparison model, fuel costs are listed separately, with the remaining items categorized as “time costs” generated during the ship’s daily operations (time costs must be amortized) and “port costs” incurred during docking and container handling.


4.2 MODEL CONSTRUCTION AND DESCRIPTION


Table 4, Table 5 and Equation (1) illustrate the cost model estimation and notation methods adopted in this study, and include cost and time items for various container shipping operations. Container ships tend to generate considerably varying costs depending on the voyage characteristics (e.g., routes, loaded volume, cruising speed, fuel consumption, and port conditions). Variable costs include fuel costs, port expenses, stevedoring and handling expenses, and canal tolls, with fuel costs assuming the greatest proportion of total costs. When global oil prices rose to their peak in 2013, such costs accounted for as much as 15% to 25% of the total operating costs of container ships (Tai & Lin, 2016). In addition, a container ship consumes different amounts of fuel during ocean sailing, slow steaming (approaching a port), or maneuvering (docking at the port) (Chang & Wang, 2012; Tai & Lin, 2013). Therefore, this study used consumption both at port and during the voyage when calculating a ship’s fuel costs (CFuel). Jansson and Shneerson (1982), examining the relationship between ship size and CFuel, found a nonlinear relationship expressed as CFuel = F*TE, where F is a constant and E denotes the elasticity of fuel cost against ship size. According to data collected by Tai (2002) in Table 4, E ranges between 0.6 and 0.8, depending on ship size.


Regarding a ship’s daily costs (CShip-daily), Tai (2002) referred to studies by Jansson and Shneerson (1982), Goss (1985), Heaver (1985), Morby (1985), and Stopford (1997) and combined the capital and operating costs of a ship as its daily costs to examine the relationship between ship size and CShip-daily. Tai (2002) also identified a nonlinear relationship, expressed as CShip-daily = M*TN,


where M is a constant and N denotes the elasticity of daily costs against ship size. According to data collected by Tai (2002), N ranges between 0.67 and 0.718.


Table 4: [Estimations of elasticity values] The Elasticity against Vessel Type


A


Dry bulk vessel Tanker


General cargo vessel


The Elasticity against Vessel Type


Container vessel


Container vessel (in this paper)


B


E


0.67~0.70 0.4~0.6 0.8~1.0 0.6~0.7


0.6~0.7 N


0.67~0.701 0.715


0.3~0.4 0.6~0.8 0.4~0.6 0.6~0.72


E


0.6~0.8 0.688


A: the elasticity of capital cost, B: the elasticity of operating-cost, E: the elasticity of fuel cost, N: the elasticity of daily cost. Source: Referred Tai (2002) with previous literatures and this study’s data collection.


In the present study, data for the periods 2016 and 2017 were collected for six container ships operating on APL’s NYE-route from Asia to North America, 11 container ships operating on YML’s AW3-route, and 11 container ships operating on OOCL’s routes of LP1 and CEC. These data were used to estimate the daily costs of ships traveling on different shipping lines. Daily costs comprised the ship’s daily fixed costs, its variable costs during the voyage, and fuel costs. The exponential regression analysis results revealed that, because of the upsizing of container ships over the past 10 years, greater elasticity values of E = 0.688 and N = 0.715 were obtained in this study showed in Table 4. In this research, CFuel = 39.01*T0.688 and CShip-daily = 117.56*T0.715 will be combined with different ship size values and substituted into the cost model to calculate the unit cost of different shipping carriers.


For example, if a shipping carrier first transports outgoing containers from Haiphong (HP) to Los Angeles (LA) on a feeder-ship to Hong Kong (HK) and then uses the T/P route from Singapore via Hong Kong to transship these containers to Los Angeles, the average cost per TEU transported is ACHong Kong. Similarly, if these containers are transshipped to Los Angeles via the Port of Kaohsiung (Kao), then the average cost per TEU transported is ACKaohsiung.


©2019: The Royal Institution of Naval Architects


A-391


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