Substantial increase in the cost of transporting goods by water
The cost of inland waterway transportation is expected to increase significantly by 2022. This applies to all vessel types, size classes and deployment patterns. Vessels that make a relatively large number of sailing hours, for example those that are active in international transport and operate on a full-time basis, will have a larger increase in costs than vessels in the domestic market. All of this is related to the very sharp increase in the cost of fuel by 2022. This and more is evident from the cost reports for inland navigation that were recently updated by Panteia on behalf of the Central Bureau for Rhine and Inland Navigation.
Cost price of inland shipping also rose sharply in 2021
In 2021 the transport costs for inland shipping companies also increased sharply. This increase was mainly due to higher propulsion costs; gasoil prices were on average 30% higher than in 2020. But not only the fuel became more expensive, also labor, insurance and repair and maintenance costs increased significantly. Personnel are scarce in the inland shipping industry, and the combination of increased demand (more transports and new construction projects) and many people leaving (retirement) makes it difficult to find suitable workers. Repair and maintenance costs increased due to rising wage costs at shipyards, more expensive equipment and high demand for shipyard capacity. Insurance costs increased due to larger claims. Cost increases ranged from +5.5% to +14.2% depending on the type of vessel, the geographical area of operation and the mode of operation. In building materials transport, costs increase by +6.2% to +10.6%.
Ships with a relatively high number of operating hours, such as large tankers and container ships operating on the Rhine, showed the greatest increase in costs, which was also due to a decrease in capital costs. Excluding fuel costs, there was an increase in costs of between +0.9% and +2.9%.
2022 shows a limited rise in costs for all types of vessel
An increase in the costs of transport by inland navigation vessel is expected in 2022. This is associated with a cost increase in almost all cost items except for capital costs. A cost increase ranging from +5.8% to +10.1% is expected. In building materials transport, the increase ranges from +6.4% to +8.8%.
In this regard, ships in the international markets have a greater increase in costs than those operating in the domestic market, due to the relatively sharp rise in fuel prices (+16.9%). In the case of short-distance transport, labor costs are more important in determining the final price of the transport operation, while the share of fuel costs in the total cost is increasing for longer distances. Labor costs have been rising for years in inland navigation due to the increasing shortage of personnel. In addition to labor costs, the costs of personnel and repair and maintenance are also rising.
Various contract forms are used in inland shipping. Inland navigation operators who have leased their vessels under long-term transport contracts receive a surcharge on the agreed price depending on the level of fuel prices. For them, the cost trend excluding fuel is important. There we see a more moderate increase for the coming year: from a minimum of 4.2% to a maximum of 5.5%.
Reports
In cooperation with the Central Bureau for Rhine and Inland Navigation the reports have become available. The reports can be ordered via Panteia's webshop, by e-mail (w.mars@panteia.nl) or by phone (079 322 23 89).
A general report is available in which calculations have been made for various segments (motor cargo shipping, push-towing, tanker shipping, container shipping, push-towing combinations). In addition, detailed reports are available on sand and gravel and tanker shipping. These reports describe the cost structure in absolute amounts and the (expected) development for the submarket.
