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Baltic Exchange launches new assessment to track ship operating costs

The Baltic Exchange has introduced a new assessment to track the cost of operating vessels, offering greater transparency to the fluctuations in running costs.

The new assessment, the Baltic Operating Expense Index (BOI),will initially covering a range of dry bulk carriers before expanding to tankers and other sectors.

The vessels initially assessed are capesizes, panamaxes, supramaxes, and handysizes.

Mark Jackson, chief executive of Baltic Exchange, said: “The Baltic Operating Expense Index is intended to provide transparency to the fluctuations in running costs. Daily operating costs are one of the variables used by shipping investors to calculate the profitability and residual value of their assets.

“We already provide independent freight, sale and purchase and recycling assessments. With the addition of operational expenses assessments, shipping investors now have a complete toolkit to manage their risk and aide their decision process,” he said.

The BOI will be published quarterly and based on assessments from three independent third party shipmanagement companies: Anglo-Eastern, Columbia Shipmanagement and Fleet Management.

Collectively, the three companies manage a fleet of over 1,800 vessels. More companies are expected to join the panel in future and a residual price calculation will be added later this year.

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Each panel member will submit four numbers expressed in USD per day, and three will be combined to produce the BOI including crew, technical and insurance.

The fourth, an assessment of a five-year drydock cost, will be amortised over five years to give a USD per day price, but published separately and will not contribute to BOI.

The first BOI assessments for the fourth quarter of 2018, and first and second quarters of 2019, will be available following a recent trial. The third quarter 2019 assessments will be published on 17 October.