Vessels’ operating expenses: A key variable on companies’ strategic decisions

Abstract

This study examines the operating expenses (OPEX) incurred by tankers and bulk carriers (bulkers), which are widely utilized vessels within the maritime sector, over the period from 2018 to 2021. The study specifically examines the movement of OPEX during the specified period and assesses the impact of the COVID-19 pandemic, vessel age, and size on OPEX. The study and comprehension of the behaviour of operating expenses hold significant importance for managerial purposes in shipping companies, as it is one of the two most critical expenses. The OPEX data is obtained from the Moore Maritime Index (MMI) database. The vessels are categorized into clusters based on age and size to facilitate a more focused and comprehensive analysis of OPEX. Data are examined through statistical analysis. The study’s findings suggest a positive correlation between OPEX and the age of vessels, with a stronger correlation observed in larger vessels. Furthermore, OPEX experienced a consistent increase throughout the entire study period, with the rate of increase directly linked to the vessel’s size. Ultimately, OPEX remained unaffected by the pandemic. This study is distinctive in that it examines not only the OPEX behaviour of different types of vessels but also considers vessel size subcategories and the impact of COVID-19.