Managing the total cost of operation (TCO) is fundamental to any successful shipping operation. In this article, drawing on Lloyd’s List’s recently published Total Cost of Operation Guide, the challenging issue of crew management is addressed.

Crew costs consume the biggest single component of some company’s vessel operating costs, so it pays to find and adopt the best tools and strategies to mitigate those costs.

In the most recent annual Moore Stephens OpCost report based on a survey of actual running costs of some 3,200 vessels, one respondent said: “Crew costs are 60% of our operating expenditure, and weigh heavily when there is high demand for, but a limited supply of, manpower and when employers are required to meet increasingly onerous requirements.”

The growing complexities and technology on new generation vessels only serve to underline the need for highly-skilled crew who, owners acknowledge, are being asked, at times, to perform tasks in line with onerous demands.

A focus on the quality of crew appears to be finding more favour with owners, operators and managers, if not all, according to Wallem Ship Management.

That quality comes from, among other things, intensive and ongoing training and a sense of wellness among crew.

“Wellness”, said Wallem’s Marine Director, Fared Khan, “is influenced by factors such as ISPS regulations, which means that crews cannot go ashore when in port. This can lead to individuals spending extended periods, often many months, effectively at sea, and mental health and suicide are increasing concerns.”

Owners and operators are learning that maintaining wellness, which embraces a seafarer’s onboard satisfaction during down time, involves adequate expenditure on communications technology.

Tackling the complex and often widely differing needs of 1.5 million seafarers from around 150 countries is a huge logistical undertaking, with the attendant cost burden.

Creating a positive environment for seafarers means that contingency planning is a must. Good shipping companies should also have a robust travel policy, effectively implemented to ensure safety, security, health, comfort and – where possible – cost efficiency.

“Knowledge, flexibility and global 24/7 coverage are essentials, and many shipping companies are going for contracted travel services as a result,” said Khan.

There are a number of positive initiatives being offered by some of the bigger and reputable travel providers for crew transport which are reaping savings for operators and repeat business for the providers.

The major components of TCO, with advice on how to manage them, are explained in Lloyd’s List’s Total Cost of Operation Guide - click here.