Three ways to reduce your OpEx without compromising on performance
25 Apr 2018
Running ships is an expensive business, no matter the type of ship or type of trade it costs a lot of money to keep them moving. With the volatility and unpredictability of rates, it’s more important than ever to keep operating costs as low as possible without sacrificing the quality of service or operations.
First things first, before undertaking any kind of OpEx improvement projects it’s important to have your performance expectations properly mapped out. There will always be “easy” cost-cutting measures available that will have a negative impact on performance. If you’re serious about excellence, which you should be, you need set parameters for performance that are never compromised on.
Business support processes vary from company to company, but often evolve in an ad-hoc, “bolt-on” fashion and are rarely given the strategic attention they deserve. As technology has moved on it has become possible to streamline support processes through technology and automation.
Whether in accounting, IT, or HR, there should be a single, integrated technology strategy that ties support functions across the business together and drives cost-effective lean processes.
One of the most effective ways to reduce expenditure is to reduce vessel speed. Slower speed means less fuel burned, and therefore less money spent. Dropping ports from the schedule is the easiest way to sail slower but doing so compromises performance and yield. Other ways to reduce speed is to use route optimisation tools like StormGeo’s Speed and Consumption Analysis, RPM optimisation tools like Eniram Speed, or reduce your time spent in port using CargoMate.
Invest in your people
Crew are often considered one of the most expensive OpEx costs, often accounting for up to 40%. However, thinking of your crew as part of your cost centre is the wrong way to go about it. They should be considered part of the profit centre; individual crew members make decisions that can have an impact of 10X their wages. Whether it’s maintenance, fuel consumption, or safety; the return on investment for good crew is undeniable.
Crew should be considered part of your profit centre. They make decisions that have a much greater impact than their wages.[/caption]
How you go about sourcing, training and retaining your crew will make a massive impact on your long-term expenditure. Wages, contract conditions, and leave allowances all feed retention, and should be slightly higher than market average to stay competitive. By investing in training looking after individuals you will ensure that the crew pursue excellence, and make decisions that bring costs down.
In a highly competitive market, running quality ships ultimately wins out over running cheap ships. Whatever your operations look like, there will be ways to improve the planning, processes and the people involved with them that will ultimately bring costs down while keeping standards high.