Shipping firms urged to strengthen opex amidst cost volatility

Focusing on revenue optimisation is a costly mistake that leaves fleets exposed.

Shipping companies must focus on operating expenditure (opex) and move beyond conventional cost levers to remain competitive in an increasingly unstable market environment.

According to a Boston Consulting Group (BCG) report, opex spending across the shipping industry has been highly variable, falling from 2014 to 2019, rising for the next two years, and then falling again from 2022 to 2024.

From 2014 to 2019, inflation-adjusted opex fell by an average of 2.7% annually, led by a 2.5% drop in crew costs, which account for 50% to 60% of total costs.

During the pandemic, even after being adjusted for inflation, opex rose by 2.5% annually across the industry, with the container and drybulk segments climbing especially quickly, at 3.6% and 4.0% per year, respectively.

BCG notes that the surge in freight revenues during this period led many operators to shift focus from cost management to revenue optimisation — a costly mistake that left fleets exposed when the cycle turned.

The report warns that traditional measures are no longer sufficient on their own and identifies three critical areas where shipping companies must now act on.

First, firms must build contingency plans for foreseeable shocks, including dual sourcing of parts and consumables for resilience, and framework agreements with drydocking yards across multiple countries for agility.

Second, maintenance, repair, and drydocking costs demand urgent attention. The average vessel age was 13 years in 2024, the highest average on record—a situation likely to increase the importance of M&R and drydocking.

BCG urges firms to adopt intelligent drydocking schedules, bundled repair campaigns, predictive maintenance, and data-driven spare-parts forecasting to offset rising costs.

Third, shipping companies must lead technological change rather than follow it by exploring capabilities such as big-data-based predictive maintenance, semi-autonomous ships to lower crewing costs, and live fuel optimisation through weather analysis.

However, BCG's benchmark also highlights an often-overlooked internal risk—inconsistency within fleets.

During the pandemic, intrafleet variance rose to its highest level since the benchmark's inception, exposing many fleets' lack of contingency plans and an inadequate level of sharing of effective cost-cutting practices amongst ships within the same fleet.