Fuel surcharge/bunker consumption.
What is a Ships Fuel (BUNKER) Consumption “IT’S A TRICK QUESTION”
I have been a tramp dry cargo ship broker in New York City for nearly 35 years. I speak to ship owners and traders that need ships to move their cargoes (fertilizer, sugar, grains etc) and negotiate the charter party terms and conditions between the two. A typical charter which I might arrange is 6,000 metric tons of phosphates loading in Tampa Florida for discharge Veracruz Mexico. My degree in Marketing (IONA 1976) did not prepare me for this career; I learned it on the job. Suffice to say I’m not a technical expert on fuel consumption but after reading comments about fuel consumption and surcharges I thought I’d toss in my two cents on what I do know. And while I know very little about passenger ships I have chartered thousands of dry cargo ocean freighters over the years.
Cruise ship consumption has always been a mystery to me too, I always wanted to know. The first and only cruise that I took I asked the Ch. Engineer and he actually lied to me!!! Actually I never saw a hard number before reading a post from a ship
Captain that his Passenger vessel burned 1,200 ton for a 7 day voyage.. now this is a number that DOES make sense! But what’s interesting to me is the way posters in this forum define costs in terms of pennies per foot, dollars per yard, gallons per foot, gallons per cylinder and so on and so on. In the tramp world of shipping we express fuel (and fuel is called ‘bunkers” in our industry) as: x knots on x metric tons of x type of bunkers per day. So a typical ship carrying my fertilizer cargo to Mexico in the above example might be described like this.
M/V Express Greek Flag Built 2004
6,800 MT Dead Weight All Told on 21’6’’ Draft Summer Salt Water
GRT 4350 NRT 2350
2 Hold and 2 Hatches
2 cranes each 25 tons safe working load
LOA 118.5 Meters and 16.5m BEAM
12 knots on 12 metric tons IFO 180 CST plus zero MGO at sea
In port working: 2.0 Metric Tons MGO In port idle 1.5 Metric tons MGO
All details are ‘about’
In terms of shear mass, you’d have to take 30 sisters of the M/V “Express” and mush them all together to add up to the mass of a large Modern Passenger Vessel (MPV), but ‘mass’ is only the tip iceburg.
MPVs need to be able to generate sufficient power to light up, feed and move thousands of passenger and crew. They have several Main Engines (ME) and generators to accomplish that feat. An MPV uses sophisticated shaft generation systems and ‘green’ technology to minimize pollution and maximize profits. They carry different grades of bunkers to accomplish different tasks. For example the ME burns a less expensive intermediate Fuel Oil (IFO) and a more expensive Gas Oil (GO) to run its generators. When she’s stopped in port she shuts down her ME and the entire ship can run off generators. When she’s moving they can turn the MGO fuel flow off and run the generators off the spinning prop shaft(s). My guess is that a MPV burns anywhere between 15 and 20 tons of MGO in port per day.
Because I don’t know exactly what a MPV burns in port it’s difficult to extrapolate what she burns at sea given the report by the captain of a MPV we burn ‘’1200 tons per 7 day voyage’’ given this, here’s a guesstimate.
Assume a 7 day voyage with 3 ports of call
Departs from: Galveston, TX
Ports of Call: Montego Bay, Jamaica, Grand Cayman, Cayman Islands, Cozumel, Mexico:
Nautical Miles between Ports
Cayman / Cozumel 408
Total Nautical Miles = 2,470
Translating Commercial Language to something we can relate to.
Converting Metric tons to U.S.Gallons
On average petroleum has a specific gravity of 0.88 which means 1 liter weighs 0.88 kilograms.
1 barrel [US, petroleum] = 158.9872972 litre
So 1 barrel weighs:
158.9872972 * 0.88 = 139.908821536 kilograms
1 metric ton is 1000 kilograms:
139.908821536 / 1000 = 7.1475121 barrels
1 barrel contains 42 U.S. gallons
42 gallons x 7.1475121 = 300 gallons per metric ton
1,200 metric tons x 300 gpmt = 360,000 gallons
Duration of the Cruise
7 days x 24 hours = 168 hours
3 port calls 9 hours per port = 27 hours in port (16.1%)
141 hours at sea (83.9%)
Total Distance 2470 nautical miles/hours at sea 141 = 17.52 knots (must average)
1 nautical mile = 6,076 feet = 2,025 yards
Total feet Travelled 2,470 NM x 6,076 feet = 15,007,720 feet or 5,002,573 yards
What’s That Cost?
All major ship operating companies have fuel / bunker departments with teams of experts. These experts are responsible for
Projecting demand and making economic decisions to minimize the expense of meeting that demand. Large
Cruise companies use the futures market(s) as a hedge against rising prices. They leverage their clout to cut
the best contracts with major bunker suppliers. These contracts include quantities, fuel quality(ies), delivery places and
Delivery terms and payment plans. While we are using SPOT bunker prices in this example, major cruise companies do not buy SPOT.
I believe cruise companies use fuel surcharges as they truly do hope to dismiss these charges when the market eases.
In the Captains example of burning 1200 tons on a 7 day voyage I suspect it’s not all one grade of oil.
Spot U.S. Gulf Price US$ 670 Per Metric ton for IFO 380 CST and US$ 1150 Per Metric Ton for MGO
IFO 1,000 Metric Tons x 670 PMT = US$ 670,000
MGO 200 MT x 1150 = US$ 230,000
But you can’t simply estimate the actual cost per foot, yard or mile without having the ship’s log
Book and bunker consumption book in front you and a qualified expert / engineer to calculate the consumption
For any given period.
Ships slow steam at night while they are trying to kill time between nearby ports reducing consumption.
They turn up the juice to 21 knots on long stretches. Leaving and entering a port (or in narrow waters) they
blend MGO with IFO for better firing. A modern tramp ship will switch from IFO to MGO while
docking. In rough seas ships use more power and more bunkers to maintain control.
MPV’s are equipped with cutting edge computers to assist the Master to calculate the best route to
Minimize bunk consumption. They have weather routing services continuously feeding the ship with
Up-to-date weather information so the Master can make informed decisions as to which course to take.
Ultimately, the Master makes a decision to route a ship based on “safety first” but bunkers follow close behind.