VOYAGE ESTIMATION

• A voyage estimate is an indispensable part of chartering negotiations as it helps owners assess the
financial feasibility of a particular voyage.
• A Voyage estimate used to calculate the profit or loss that a vessel will make from a proposed
voyage.
• In voyage charter all the vessel-related expenses that include operating costs and voyage costs are
paid for by the ship owner. Hence, a voyage estimate must take into account freight income (bill of
lading amount loaded on the ship in tons by freight rate in dollars) and subtract all voyage-related
expenses, including address commission and brokerage.
• Voyage estimating is a process that takes into account the following factors:

 The Length of the Voyage – It is the first essential point is to define the Voyage. The voyage
always starts from the time and the place where the ship completes discharge of the previous
cargo. Once you have necessary data's, it is easy to estimate the length of the sea passage
including the ballast leg.
 Time in port – Tankers are easily accessible, usually tankers have 72 hours all purposes
laytime. Dry cargo voyages have usually different port time content.
 Speed - is another important factor while voyage estimation. In some cases it might be better
to proceed more slowly. For eg: There may be little point in steaming full speed only to await
a suitable tide for some hours following arrival off a port.
 Cargo Quantity

 Initially one needs to know the vessel's total deadweight, this on the assumption that there
are no draft limitations anywhere on the voyage. From this figure one must first deduct
the constants, which consist of stores, water, lubricants, spares and even the weight of the
crew.
 From this figure one must first deduct The other deductible, before arriving at the true
cargo capacity, is the amount of bunkers on board.
 The vessel may be able to lift a particular tonnage of cargo but has it the space to carry it?
This is where the importance of the stowage factor (SF) enters.
 Knowledge of loadline zones is essential.
• Other delays:
 Calls for bunkering can be lengthy. For estimating purposes, it is sufficient to allocate one
day for each call.
 Canal transit inevitably lengthens the voyage and it is safer to allow 2 days each for
passage through Suez and Panama because time can be lost waiting, as well as during the
transit itself.
 If the voyage will get affected by bad weather the vessel may loose speed and hence
voyage time would increase.

• Various software are available to estimate the voyage cost and can also be done on
standardised excel sheets.
• Practical Voyage Estimation
A ship owner has received the following indication from charterer directly:

Acct: FCC
52,000MT IRON ORE IN BULK 10PCT MOLOO
1SBP PORT HEDLAND, AUSTRALIA / 1SBP LIANYUNGANG
LAYCAN : 15 -22 SEP’01
FRT (Freight in US $/tonne) INVITE OWNERS BEST BSS (Basis)
FIOST, 1/1 (1 Port for loading and 1 port for discharging)
LOADING RATE: 40,000MT PWWD SHINC
DISCHARGING RATE: CQD (Take as 4 days)
NO ADDCOMM )(No address commission for Charterers)
NO BROKERAGE
END
• Some relevant information:
- Vessel free Hong Kong (it means that the vessel will need to ballast from Hong Kong to the load port,
assuming no cargo available).
- Vessel can load 54,000 mt iron ore maximum
- Vessel ETA loadport 17 SEP’ 01
- Speed : 13 knots
- Bunker consumption:
- F.O. 35mt per day - D.O.
- at sea 2mt per day - D.O.
- in port 4mt per day
- Price of F.O. $ 110.
- Price of D.O. $ 155.
- Port Disbursements
- At Port Hedland $30,000.
- At Lianyungang $30,000.
- Other expense assume $ 3,000.
- Charterer “in”Vessel daily hire $ 6,000.
- Discharging take about 4 days
- Distance:
- HongKong/Port Hedland2,710 nautical mile
- Port Hedland/Lianyungang 3,257 nautical mile
• Saling Days Required:

A) HONG KONG/PORT HEDLAND = 2710/312 (13 KNOTS*24 HRS) = 8.69 DAYS

B) PORT HEDLAND/LIANYUNGANG = 3257/312 (13 KNOTS*24 HRS)= 10.44 DAYS

C) PORT STAY:
A) LOADPORT I.E. PORT HEDLAND 54,000 MTS CARGO/ 40,000 MTS LOAD RATE = 1.35 DAYS
B) DISPORT (Discharge Port) I.E. LIANYUNGANG = 4 DAYS

D) Total Duration: 24.48 DAYS, say 24.5 days.

• Bunker Cost:

While Sailing:
E) FUEL OIL = 19.13 DAYS (A+B) * 35 MTS/DAY CONSUMPTION * USD 110/PMT (19.13*35*110) = USD 73,650
F) DIESEL OIL = 19.13 DAYS * 2 MTS/DAY * USD 155/ PMT(19.13*2*155) = USD 5,930

In Port:
G) DIESEL OIL = 5.35 DAYS (C) * 4 MTS/DAY * USD 155/PMT (5.35*4*155)= USD 3,317

TOTAL BUNKER COST (E+F+G) = USD 82,897

TOTAL VOYAGE COST: BUNKER COST = USD 82,897 + PORT DISB = USD 60,000 + CHARTERED IN VESSEL COST = USD146,850
+ OTHER EXPS USD 3,000
TOTAL BUNKER COST (E+F+G) = USD 82,897

TOTAL VOYAGE COST=

BUNKER COST USD 82,897 +
PORT DISB USD 60,000 +
CHARTERED IN VESSEL COST USD146,850 +
OTHER EXPS USD 3,000
-------------------------------------------------------------------
292,741 $

BREAK EVEN FREIGHT RATE REQUIRED TO PERFORM THIS VOYAGE:

USD 292,741/54,000 MTS CARGO = USD5.42 PMT