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Stowage As A Profit Centre - Pt 2

So, what are the costs involved in stowing and operating a vessel?

Firstly, you have the daily operational cost of running the vessel, pilotage fees, port dues, tug fees, agency fees and container move costs to name but a few. Of these, the main items that a stowage planner can influence are the vessel running costs and container move costs.

Ideally, an 18,000+ TEU vessel would call at perhaps 3 ports in Europe and 3 ports in Asia, with the cargo being loaded onto feeder vessels to the final destinations. Unfortunately, for most carriers, this is not the case. It is not uncommon for these vessels to call at 15-20 ports during the entire port rotation. This is extremely costly and inefficient since the fixed costs of pilotage, tugs and port dues will apply at every one of the 15-20 port calls. There is not a lot a stowage planner can do about these.

However, there are a number of things that a planner can do to keep costs to a minimum. Each port will have a pre-determined container movecount. From this, the planner can derive an appropriate “crane split” (the number of cranes that will work on the vessel during the port call) for each port. So long as the vessel is able to sail from each port on schedule, no additional fuel will need to be used to arrive at the next port on schedule. This is particularly crucial in the last port in the region, often before the vessel sails for the Suez Canal and when there is an allocated time for arrival. Being late out of the last port means burning more fuel for a higher number of days in order to hit the next scheduled window.

(Right Click and Open Image in New Tab for detailed view)

The second biggest cost of stowage is restows. Restows are containers that are loaded onboard the vessel and are then moved to another position, in another port, before being discharged at the final destination.

(Right Click and Open Image in New Tab for detailed view)

Restows can occur for a number of reasons. The highest contributing factor of all is empty container repositioning. Loaded containers come from Asia but, since there is a trade imbalance, empty containers have to be evacuated out of Europe or the US and sent back to Asia.

If a vessel were to go directly from Europe to China, then these empties would probably not have to be restowed. The problem is that most services have a call in between (i.e. Port Klang, Singapore, Tanjung Pelepas etc).

As these regions do not require empties and the laden containers from Europe/US to these ports tend to be very heavy, it is not possible to load full containers up to the top tiers as this would exceed the stackweight limits.

Instead, the heavy containers are loaded 5 or 6 high on deck and the remaining 4 or 5 tiers are loaded with empties for China.

Consequently, when the vessel arrives in Singapore (or other terminal before China), all of these empties have to be taken off the vessel and then reloaded. Again, this would not be such an issue if services with the large vessels were restricted to 3 or 4 ports at either end.

The latest vessels of 18,000 TEU and above almost always incur what are known as Terminal Convenience Restows. Given the height of the containers on the decks of these vessels, terminals sometimes need to move onboard containers out of the way in order to reach the stacks they are loading and/or discharging. As per Fig.7, below, the crane will operate at a much slower rate if it has to work over the high tower in the centre of the bay.

Fig.8, below, shows a bay where there is no need for Terminal Convenience Restows because the onboard containers are only loaded 5 tiers high on deck.

Terminal Restows may or may not be charged to the carrier, but they do cost time due to the loss of productivity or additional restow moves and the ship is likely to be alongside for a longer period than planned, thus prompting the vessel to speed up to arrive at the next port on time. More speed equals more fuel.

(Right Click and Open Image in New Tab for detailed view)

One option to get around this is to use ballast to make the vessel deeper in the water. This may speed up the port operations but the vessel can be carrying upwards of 50,000 tons of water and, again, more fuel is required to move the vessel.

Other reasons for restows can range from customers requesting a change of destination, a small number of containers that cannot be stowed in a final location, hazardous cargoes that have limited locations available to vessel stability requirements. Restow costs range enormously, depending on the port in which they are carried out. In China they can be as cheap as $33 per container up to $250 per container in some US ports. Convenience restows can be avoided if the onshore side of the vessel is not loaded up to the maximum tiers.

When considered individually, the cost of restows seems minimal, but when seen in the context of an entire port rotation, the money can soon add up.

If you only look at the costs involved in operating a vessel and a service, it is easy to make the assumption that the stowage centre is a cost centre that can, at best, only reduce the costs. This is, however, where the misconception comes into play, mainly due to the lack of overall knowledge about how stowing a ship works.

When is a ship considered to be fully utilized? How close can the actual loading get to the nominal TEU of the vessel? At what percentage of utilization does the shipping line start to make a profit on a particular vessel?

The easiest way to explain this is to look at a single bay on the vessel, rather than the vessel as a whole. Each bay can be considered to have a nominal TEU capacity, and it is up to the stowage coordinator to make the best use of the space, with the cargo they have available on the loadlist for the current port.

(Right Click and Open Image in New Tab for detailed view)

(Right Click and Open Image in New Tab for detailed view)

This bay can load the following:

  • Nominal Capacity of 568 TEU

  • Two tiers of high cubes underdeck without slot loss.

  • 45 Reefer Containers on deck (marked “RF”)

  • 9 Tiers On Deck if loading standard height units

  • 8 Tiers On Deck if loading all High Cube units

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