Operating Costs For Shipping Up 2.1%

Crew costs rose in 2011, but not as much as they have in many past years.

Annual operating costs for the shipping industry rose by an average of 2.1 percent in 2011, driven largely by crew costs, according to OpCost 2012, a report by U.K. accounting and consulting firm Moore Stephens.

"The bad news is that costs continue to rise," said Moore Stephens partner Richard Greiner.

"The good news is that costs are not rising as fast, or as steeply, as they were three or four years ago, and are in fact pretty much in line with predictions."

Moore Stephens said increases in crew costs were much less steep than in earlier years, perhaps reflecting an economic climate in which some companies have gone bankrupt and some ships have gone into lay-up.

Container ship costs rose at a steeper 3.1 percent, while the costs for bulkers and tankers rose 1.7 percent.

Container ships spent 3.4 percent more on their crews in 2011 than in 2010, while larger dry cargo ships and small LPG carriers each saw that line item rise 6.7 percent.

The cost of repairs and maintenance fell 1.1 percent after rising 4.5 percent in the previous year, and spending on insurance fell 1.5 percent after already dropping 4.7 percent in 2010.

Spending on stores, which had declined for the previous two years, rose 2.7 percent, reflecting an increase in lube oils, which rose in price along with crude oil.

"Confidence in the shipping industry, while fragile, has held up remarkably well given the financial and political difficulties of recent years," Greiner said.

"Shipping will not welcome an increase in operating costs. But there should be some solace to be had from confirmation that the increases are more or less in line with predictions."

Earlier this month, Moore Stephens reported that confidence in the shipping industry was as low in the three months ended in August as it's been at any point in the past four years.