W13_DI_2013 SHIP MANAGEMENT BIDDING

1.  Problem recognition, definition and evaluation

Management already decided to use other Ship Management to manage some tankers. The goals are not only to increase financial and operational performance but also for giving in-house ship management positive competitor. Now, we are in a bidding evaluation process to choose the best and suitable ship management.

2.  Development of the feasible alternatives

There are 3 best bidders that survived until stage 3 bidding, as follow:

          - Ship Management A

          - Ship Management B

          - Ship Management C

3.  Development of the outcomes

Evaluation will use compensatory models decision making with scoring system.

4.  Selection criteria.

The acceptable criteria in this bidding evaluation are:

          a.       Minimum requirement, as follow:

 Figure - 1. Minimum Requirement List

      b.  Weight requirement using scoring system with component, which is presence, experience, systems, people, regulation compliance and other.

5.    Analysis and comparison of the alternatives

 Attributes Weight:

                                                              Figure - 2. Weight Requirement detail

   Weight Scores

   Minimum Requirement:

                                                                       Figure - 3. Result 1     

Weight Requirement:

                                                               Figure - 4. Result 2

   

6.  Selection of the preferred alternative

Base on calculation above, Ship Management C become the winner of this bidding with all minimum requirements fulfilled and scores 3,41.

7.    Performance Monitoring & Post Evaluation of Result

This bidding evaluation will be used to construct Ship Management KPI to monitoring and evaluation every quarter years.

Beside all requirement mentioned, we also need to analyze financial component. It will be discussed on next blog posting.

Reference: 

        i.      Maritime Research, Drewry. (2012). Ship Operating Costs Annual Review   and Forecast (annual report 2012/2013),  Section 3 Operating Cost Oil Tanker.

       ii.      Shipping Consultant, Drewry. (2006). Ship Management,  Section 4

      iii.      William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling (2011), Engineering Economy (15^th Edition), Chapter 14

W12_DI_2013 TANKER OPERATING COST ESTIMATION

1.       Problem recognition, definition and evaluation

At the end of 2012 we were preparing 2013 budget for tanker vessels, in order to support operational preparation for next year. Tanker budget consist of several components such as bunker cost, charter cost, operating cost, port expenses, risk mitigation cost and depreciation.  As a Ship Owner & Ship Manager our main concert for budgeting is operating cost. This blog talk about tanker operating cost estimation using WBS and some model base on chapter 3 Engineering Economy books.

2.       Development of the feasible alternatives

Estimation calculation will compare using some parameters that is Drewry Operating Cost Index, Indonesian inflation index and linear regression from last 4 years OPEX realization.

3.       Development of the outcomes

Cost component using WBS for Tanker Operating Cost as shown below:

Figure 1: WBS Tanker OPEX

Parameters used for Cost Estimation Calculating:  

Drewry Operating Cost Index

Figure 2: Drewry operating cost index

 

Base on figure 2, obtained index from 2009 until 2013 as follow:

Indonesia Inflation Index

Figure 3: Indonesia Inflation Index

Mean data from 2009 – 2012 Indonesia inflation rate is 5.

4.       Selection criteria.

The best estimating budget will determine base on highest result from 3 parameter result as long as the result lower than internal standard charter rate similar vessels and International standard.

5.       Analysis and comparison of the alternatives

Calculation examples for Tanker 30,000 DWT (Type MR) with YOB 2005 and cargo white oil:

 

6.       Selection of the preferred alternative

Base on calculation above, shown that using Indonesia Inflation Index (mean 5%) is the highest result with 4,676 USD/day. Otherwise in internal rate for MR is 6500 – 8000 USD/day and data international standard from Drewry is 8,440 USD/day. 

7.       Performance Monitoring & Post Evaluation of Result

The result of 3 parameter above are regular vessel MR type operating cost exclude docking, damage, deductable and special repair. So the budget will increase if Ship Manager has plans to upgrade/improve vessels technically. Usually Ship Owner increase Ship manager budget around 10%-20%.

Drewry Index seems the lowest ones because Drewry standard base on International tanker market which is sensitive with global economic condition, global conflict and force major condition. Crisis in Middle East and global crisis in some Country make tankers market fall and operating cost index going down from 2011.

Reference: 

         i.      Maritime Research, Drewry. (2012). Ship Operating Costs Annual Review and Forecast (annual report 2012/2013),  Section 3 Operating Cost Oil Tanker.

       ii.      Indonesia Inflation Rate, retrieved from: 

http://www.tradingeconomics.com/indonesia/inflation-cpi

      iii.      William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling (2011), Engineering Economy (15^th Edition), Chapter 3