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© V.Ships 2013

3rd Ship Operating Cost Presentation

‘Ship Operating Costs: Current and Future Trends’

A Ship Manager’s View…

Alastair Evitt, General Manager, V.Ships Greece

Wednesday 11th December 2013

Operational

Financial Commercial

Management

Business

Ship Management

translates market rate

and days into profit

What is Ship Management ?

What the Owner wants (1993)….

• Zero Accidents to crew or vessel

• Look after everything without bothering the Owner

• Zero downtime planned or unplanned

• No bills

• Ship maintained to last for ever

• Fast vessels with no fuel consumption which are always in the right place for the best paying business

• Instant compliance with every new rule and regulation

• Robot crews that work 24 hrs a day and never need feeding, paying or leave and that can be trained by a modem link while they work

• Perfect performance to the requirements of the Owner’s customer

2014 – Future Requirements

• Partnership – commercial, operational and technical

• Crewing Competence

• Technical Reliability

• Operational Efficiency

• Legislative Compliance

• Conclusion

Partnership

• There is no simple answer

• Team work with Owners is essential

• Sharing the long – or even medium term goal

Crew

Our on-board management team

• On average 60% of OPEX

• Biggest asset or greatest threat?

• Is training OPEX well spent?

• Is the industry prepared for the next Cycle?

• What are the implications of the MLC

Technical Reliability

• Getting the Basics Right …..

• Value your supply chain

• Beware of ‘ Non original spare parts’

• Buy cheap – buy twice…

• Fix the illness – not just the symptoms

• Are the available funds being spent where they will do

the most good?

Getting The Basics Right (2)

• Some of the biggest gains are to be made from

making sure that a ship runs as it was designed.

• Knowing where you stand NOW is essential

• Measurement

• Accurate measurement of

– Fuel Consumption

– Power Output

– Running Parameters

Getting the Basics Right (3)

• Machinery Management

• Good maintenance programmes

• Regular monitoring of running parameters.

• Proper management of plant

Fuel Management

Loading Fuel; making sure you get what you pay for:

Fitting of a Coreolis Mass Flowmeter can reduce short

delivery at bunkering down to 0.5% .

(PAYBACK time as little as 6 months)

Fuel Treatment

• Filtering, Purification and Combustion

Consider operating a fuel oil purifier efficiency programme

to ensure the units are operating to maximum benefit.

Reductions in sludge production and fuel loss

Getting the Basics Right (4)

• Hull Management

• The right hull treatment programme.

• Selecting the right coating.

• Inspection and cleaning.

Hull Performance

• It is commonly acknowledged that maintaining the

ship’s hull smooth and free of fouling gives the

biggest potential saving in fuel consumption.

• Additional investment during a dry-dock in a

comprehensive blast of the hull followed up by

coating with a high quality anti fouling system will

produce long term savings for the majority of

vessels.

Hull Performance

There are increasingly sophisticated

products available which can be

matched to the ships profile and

owners aspirations to produce a cost

effective performance improving

proposal.

Propellers

• Some of the biggest gains are to be made from making

sure that a ship runs as it was designed.

• Propeller Management

– Re-profiling propellers on older tonnage

– Proper repair in dock

– Regular Inspection and cleaning

Propellers

• During the gold rush of the mid 2000’s many

propellers were not matched properly to hulls

• On older vessels the hull will become heavy with age

and the propeller no longer matches.

• Main engine manufactures will work with Owners to

re profile older propellers in dock or afloat.

Trim Optimisation

• Relatively minor changes in trim can give dramatic

savings in fuel consumption

• A ‘one-of’ investment of around 25k - 30k Euro in a T/O

package - depending on hull profile data availability.

• Payback on Leisure and Container vessels can be less

than 1 year.

Trim Optimisation

Plant Management 1

90

67

91

8085

76

88

94 92 90 9188 86

94 94

0

10

20

30

40

50

60

70

80

90

100

0

100

200

300

400

500

600

700

Alt

ern

ato

r R

un

nin

g H

ou

rs E

ffic

ien

cy %

Shaft or Turbo Alternator Usage Per Voyage

Total Voyage Hours Alternator Running Hours % Utilisation Min Utilisation Target

Plant Management 2

110% 110%118%

110%105% 104%

110%104%

120%116%

130% 129% 127%134%

110%

0

20

40

60

80

100

120

140

160

Generators Utilisation per Voyage

Generator Running hrs/ Voyage Hours % Aux Engine Utilisation target

Working in the right zone

Operating on or

above the red line

gives poor efficiency

and causes engine

damage.

Hull and propeller

cleaning and good

maintenance

management will

avoid this.

Legislative Compliance

• Ballast Water Management

• Proposed European Union MVR legislation

• USA VGP – 19th December 2013

• Californian Maximum Fuel Sulphur Content

Received information in Monday and Tuesday this week…

Shipping KPI ProjectOverview

(What, when and how many)

1. 2100 vessels

2. 180 Companies

3. CDI using for their container vessels

Can you manage without measuring?

• how well you are performing?

• if you need to improve?

• if your competitors are performing better than you?

• where you need to improve?

and

Do you WANT to improve?

If so,

HOW?

•Do you know:-

Continuous Improvement

That which you don’t measure

You can’t control

That which you don’t control

You can’t improve

Do we always see ourselves as we

really are?

Or as we would like to be?

Best Management Practice by

use of KPI’s is not difficult:

http://www.intermanager.orghttp://www.intermanager.org

Add your fleet to:-Add your fleet to:-

http://www.shipping-kpi.orghttp://www.shipping-kpi.org

Summary and Close

• Get the basic right

• Run the vessel as designed – or improve

… and its not new

Lord Kelvin (circa 1860)

"To measure is to know. If you can not measure

it, you can not improve it."

Charles Darwin (circa 1860)

“ It is not the strongest of the species that

survives, nor the most intelligent, it is the one

that is most adaptable to change”

© V.Ships 2013

‘Ship Operating Costs: Current and Future

Trends’

A Ship Manager’s View…

Thank you for your attention

© V.Ships 2013

‘Ship Operating Costs: Current and Future

Trends’

A Ship Manager’s View…

Thank you for your attention