Commercial Ship Management: Voyage Estimation Before Fixing a Cargo

A cargo may look attractive at first glance, but the final result depends on the complete voyage economics.

Before fixing, shipowners should evaluate not only the freight rate, but also vessel position, bunker consumption, port costs, voyage duration and operational risks.

Kiev Shipping Ltd supports shipowners with commercial ship management, vessel employment and voyage evaluation.

What Should Be Included in a Voyage Estimate?

A basic voyage calculation normally includes:

• freight income;
• ballast distance;
• laden distance;
• bunker consumption and prices;
• port expenses;
• canal or passage costs;
• loading and discharge time;
• commissions;
• expected voyage duration.

These elements determine the real commercial result of the fixture.

Vessel Position Matters

A high freight rate does not always mean a profitable voyage.

If the vessel must make a long ballast passage to the loading port, the additional time and bunker consumption may significantly reduce the result.

This is why cargo evaluation should always begin with the vessel’s actual position.

Port Time and Operational Risks

Loading and discharge conditions also affect voyage economics.

Important factors include:

• cargo handling rates;
• congestion;
• draft restrictions;
• weather exposure;
• possible waiting time;
• demurrage conditions.

Even a small change in port time can materially affect the daily return of the vessel.

Compare Alternative Employment

Before accepting a cargo, shipowners should also compare it with other employment opportunities.

The best fixture is not necessarily the cargo with the highest freight rate, but the voyage that produces the strongest overall commercial result with acceptable operational risk.

Kiev Shipping assists shipowners with vessel employment, voyage calculations, freight negotiations and commercial follow-up.

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See also: How Shipowners Can Improve Vessel Employment · Commercial Ship Management for Shipowners · more in Commercial Ship Management.

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