Cycle Cost & Required Freight Rate (3-Port Model) 12/21/2012 - - PowerPoint PPT Presentation

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Estimating Commercial Ship Life Cycle Cost & Required Freight Rate (3-Port Model) 12/21/2012 SPAR Associates, Inc. 1 This is another of SPARs ESTI-MATE Cost Models. It focuses on life cycle costs for commercial ships and estimating the

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Estimating Commercial Ship Life Cycle Cost & Required Freight Rate (3-Port Model)

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This is another of SPAR’s ESTI-MATE Cost Models. It focuses on life cycle costs for commercial ships and estimating the required freight rates for a user-defined trade route and operational characteristics. For the life cycle costs, annual estimates are generated for

Capital financing and return on equity;
Salvage/resale
Insurance
Administration
Supplies and crew

When the user defines details of the trade route (average voyage scenario of speeds and distances), the Cost Model estimates costs for

Fuel
Port & drayage.

The Cost Model develops the Required Freight Rate (RFR) on the basis of unit (trailer, TEU, passenger, etc.) voyage cost, tonnage, and/or equivalent statute land miles (if applicable).

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16.5% 9.4% 35.4% 6.9% 8.6% 11.8% 0.9% 1.5% 2.7% 2.8% 3.4% Capital Cost Return on Equity Fuel Cost Crew Cost Port & Handling Costs Door-to-Dock Drayage Tranport Costs Insurance Maintenance & Repairs Management Costs Lubes, Oils & Stores Other

Typical Breakdown of Annual Costs for a High-Speed Commercial Trailer Ship

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Basic Hierarchy of Life Cycle Costs

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Defining Transit Route Distance per Leg of the Route

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Defining Transit Route Speed per Leg of the Route

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Defining Transit Route Time in Hours per Leg of the Route

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Defining Transit Route Fuel Consumption per Leg of the Route

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Defining Basic Components of Capital Cost

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$- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Annual Cost of Money Millions Years for Financing

Comparing Financing Terms

Equal Annual Pmt of Principle + Interest

n Rem. Principle

Equal Annual Pmt Mortgage Equity Return

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y = 20.35477x2 + 42.40645x - 854.24061 R² = 0.99912

10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 10 20 30 40 50 60 70 Estimated Propulsion Power (kW) Speed (KTS)

Estimating Propulsion Power Curve

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There are three methods for determining fuel consumption in metric tons for each leg of the trade route.

1. The first method allows entries of estimate kW expended each leg (including

electric generation in port) for each (if multiple) propulsion system for the ship. The cost model computes the tons of fuel consumed by multiplying the kW by the leg hours and the specific fuel consumption coefficient (SFC).

2. The second method estimates the propulsion kW based on the speed. The

“Power Curve” worksheet builds an approximate second order speed-power curve (Figure 3.1-4) using the ship design’s maximum kW propulsion power versus maximum hull speed. This method most likely cannot develop an accurate kW for the transit leg speed if there are multiple propulsion systems in

use. A manual entry for the specific fuel consumption coefficient is required for

the model to compute tones consumed over the hours of operation over the transit leg period of time.

3. The third method allows the tons of fuel consumption to be computed off-line

from the cost model and entered in the gray cell labeled “Manually Entered Propulsion Fuel MTONs.”

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Summary of 3-Port Voyage

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Summary of Cargo Transfers

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The Cost Model Generates a Variety

f Tabular & Graphical Reports

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Report Indicating Required Freight Rates per Type of Cargo Transported

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Users of a cost model are cautioned that it is intended to provide only an estimate of cost information. There are limits to the capabilities of these calculations beyond which results may not be accurate. The data provided in the cost model is not a substitute for judgment, analysis and sound estimating practice. The cost model is an aid in developing an informed opinion

f cost. If you are using the cost model as your sole cost authority for contract bids,

you are reading more into the cost model than what has been intended. SPAR ASSOCIATES, INC. MAKES NO WARRANTIES OF ANY KIND WITH REGARD TO THIS MATERIAL, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR A PARTICULAR PURPOSE. SPAR Associates, Inc. shall not be liable for errors contained herein or for incidental or consequential damages in connection with the furnishings, performance or use of this material.

User Caution

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Over 40 Years Serving the Shipbuilding & Repair Industry

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