An Investigation for the Fuel Price Escalations on Optimum Speed in Maritime Transportation

Transcription

1 Joural of Earth Scieces ad Geotechical Egieerig, vol.7, o. 1, 2017, ISSN: (prit versio), (olie) Sciepress Ltd, 2017 A Ivestigatio for the Fuel Price Escalatios o Optimum Speed i Maritime Trasportatio Eda Tura 1 ad Bahri Şahi 1 Abstract Most of the cargoes are shipped by maritime trasportatio i the World sice it eables movig of more commodities at the same time. Trasportatio costs ad evirometal effects as air pollutio, oise are also less compared to other modes of trasportatio such as highway, railway ad airway. Cost is a sigificat determiat for the decisio-makig of cosigers durig mode choice. I this study, a ecoomic aalysis approach for a uimodal trasportatio cost calculatio has bee preseted ad applied to a case study for maritime cargo trasportatio. Uit trasportatio costs for DWT cargo vessel have bee calculated cosiderig techical ad ecoomic parameters of the vehicle. Effect of service speed, fulless ratio ad escalatio rate for future fuel cost o uit trasportatio cost have also bee ivestigated ad show with graphs. It is foud out that uit trasportatio cost icreases with the icrease i service speed ad escalatio rate for future fuel cost ad the decrease i the fulless ratio of the vessel. The model has also bee ru to illustrate how the optimum speed ca vary with respect to escalatio rate for future fuel costs ad clearly see that optimal speed becomes lower at high fuel escalatio rates. Keywords: Costs, Trasportatio, Maritime, Speed Optimizatio, Fuel Cosumptio 1 Itroductio Maritime trasportatio is the mai trasportatio mode for global cargo distributio due to the shippig capacity, ability to carry cargo over log distaces at low trasportatio costs compared to other modes of trasport. Cost is a promiet factor durig mode choice of a cargo ad various parameters such as 1 Yildiz Techical Uiversity, Turkey

2 306 Eda Tura ad Bahri Şahi route legth, vessel speed, fulless ratio, escalatio rate for future fuel costs, etc. effect the value of uit trasportatio costs. I this study, uit trasportatio cost of a DWT cargo vessel have bee calculated ad the alteratios with respect to parameters as service speed, fulless ratio ad escalatio rate for future fuel prices have bee show with graphs by usig Levelised Cost Method. Levelised costs are the ratio of total lifetime expeses versus total expected outputs, expressed i terms of the preset value equivalet accordig to Nuclear Eergy Agecy ad Iteratioal Eergy Agecy (2005). There are some studies utilizig from levelised cost method durig the calculatio of trasportatio cost both for cargo ad passeger i the literature. For passeger trasportatio, Sahi ad Kesgi (1991) ad Alka et. al. (1997) studied a ecoomic aalysis by usig this method. Moreover, Ust ad Tura (2011) applied the method to six differet passeger vessels operatig betwee Besiktas & Uskudar to estimate uit trasportatio costs. For cargo trasportatio, Sahi et. al. (2005, 2009) have compared the uit trasportatio costs for highway, railway, maritime ad combied trasportatio modes i Turkey with the applicatio of levelised cost method. Tura et. al. (2012) made a cost aalysis for the determiatio of the most cost-effective trasportatio mode betwee İstabul ad Deizli ad as a result, they have figured out that itermodal seaway-highway trasportatio has the miimum trasportatio cost for this route. Additioally, Sahi et al. (2014) developed a approach for itermodal trasportatio i their study ad poited out that i the short distace trasportatio, sigle trasportatio modes always ted to be advatageous while the trasportatio distace is loger, itermodal trasportatio begis to be more cost-effective. I additio to above studies, Pilot ad Pilot (1999), Prakash et. al. (2008), Al-Khayyal ad Hwag (2007) focused o the miimizatio of total trasportatio cost problem. Clark et. al (2004) studied o the determiats of shippig costs ad the effects of these parameters o maritime trasportatio. They idicated that seaport efficiecy is a importat determiat of maritime trasportatio costs besides route legth ad other variables. Speed optimizatio has also bee ivestigated ad illustrated with the derived ecoomic model i this study. Accordig to the literature, Psaraftis ad Kotovas (2014) made a study to clarify some importat factors such as ship speed optimizatio ad ivestigated the effect of speed reductio o total trip time, fuel cosumptio, fuel costs, air emissios. They have idicated that slow steamig is the most ecoomical measure i order to miimize the costs ad gai more profit. Psaraftis ad Kotovas (2013) preseted a taxoomy ad survey of speed models i maritime trasportatio emphasizig that the ship speed is a major determiat for maritime ecoomics ad sustaiability. Magirou et. al. (2015) examied the ecoomic speed of vessels operatig i the spot market i a tramp trasportatio utilizig from dyamic programmig

3 A Ivestigatio for the Fuel Price Escalatios o Optimum 307 equatios. Fagerholt ad Psaraftis (2015) proposed a mathematical model aimig to maximize daily profit ad they applied their model to ships that sail i ad out of Emissio Cotrol Areas (ECAs). 2 Case Study Ivestmet, fuel/lubricats, operatio/maiteace ad exteral costs of a vessel have bee cosidered i order to estimate the uit trasportatio cost i maritime trasportatio. A. Ivestmet cost per uit of cargo (Uc): Ivestmet, operatioal ad maiteace, fuel ad lubricat, exteral costs per uit of cargo have bee desigated with the ecoomic model preseted by Sahi et. al. (2005, 2009). The uit cargo ivestmet cost, Uc, calculated with the below equatio (2005, 2009): t1 1 I (1 ) i (1 r) t c 2L VsZsa t 1 Uc 2Y Y V 8760 Z Z (1 r) t k d s bt bk t 1 Ivestmet cost (I c ) of a cargo vessel has bee derived subject to DWT by usig the sale prices data of recetly built cargo ships i Table 1 (Tura, 2014). Table 1: Sale price for recetly built cargo ships Sale Price DWT (tos) (M. USD) 1, , , , , , , , , , , , , (1)

4 308 Eda Tura ad Bahri Şahi Ivestmet cost subject to DWT is; I x xdwt c (2) whereby, uit ivestmet cost is derived with the followig expressio (Tura, 2014); U c t 1 1 DWT i r L VsZ sa t (1 ) 2 t1 t YkYd Vs Zbt Zbk r t1 (3) I (3), I C represets ivestmet cost, L is route legth, V s is service speed of vehicle, Z sa is waitig time betwee sequetial trips, Y k is cargo capacity, Y d represets fulless ratio, Z bt is aual maiteace-repair time, Z bk is aual idle time ad i is the iterest rate. B. Operatioal ad maiteace costs per uit of cargo (U m ): Operatioal ad maiteace costs per uit of cargo (U m ) ca be calculated with the followig expressio (2005, 2009); U m t1 C mo (1 e m k ) t si d s c (1 t 2Y Y V (8760 Z ) (1 e bt Z bk s t ) (1 r) ) t1 t (1 r) t 2 L VsZ where, C mo is aual operatio ad maiteace costs, e m is escalatio rate for future operatioal ad maiteace costs, is isurace percetage (% I c ), e s is the escalatio rate for future isurace cost. C. Fuel ad lubricat costs per uit of cargo (U f ): Fuel ad lubricat costs per uit of cargo, Uf, ca be formulated as (2005, 2009): sa (4) U f t t B f Pf B0P0 L (1 e f ) (1 r) t Y kyd (1 r) t1 t1 (5)

5 A Ivestigatio for the Fuel Price Escalatios o Optimum 309 where B f is fuel cosumptio per km (mai+aux.), P f is fuel price, B o is lubricat cosumptio per km (mai+aux.), P o is lubricat price, e f is escalatio rate for future fuel cost. D. Exteral costs per uit of cargo The exteral costs per uit of cargo ca be estimated as (2005, 2009): t 1ex caccp c L 1 * t 1 r Yd Uex Yd 1 e (1 r) t x t 1 (6) Accordig to above expressio, c ac, c p ad c, are specific cost of accidets, the specific cost of pollutio caused by emissio ad the specific cost of pollutio * d caused by oise, respectively. Y is referece fulless ratio used for the calculatio of specific exteral costs, ex is the escalatio rate i the exteral costs. As a coclusio, U T, is formulated as below; U T = U c + U m + U f + U ex ($/to) (7) 3 Case Study A cost aalysis has bee doe with the applicatio of the method i Part I. Calculatios have bee performed i order to obtai the uit trasportatio costs for DWT cargo vessel. Iterest rate is assumed as 8% accordig to the iformatio from the baks, discout rate, 10%, escalatio rate for future operatioal-maiteace, isurace, exteral cost, 3% durig calculatios. Escalatio rate for future fuel cost have bee cosidered fluctuatig with the ratios of 2%, 4%, 6%, 8%, 10% ad 15% i order to preset the effect of fuel prices o the alteratio of uit trasportatio cost i detail. For specific cost of accidet, pollutio ad oise, data from Sahi et.al.(2009) have bee used ad give i Table 2. Techical ad ecoomic data for DWT cargo vessel is also give i Table 2.

6 310 Eda Tura ad Bahri Şahi Table 2. Techical ad ecoomic data for DWT cargo vessel CARGO VESSEL Symbol Uit DWT to Ivestmet cost Ic $ 12,967,552 Average ecoomic lifetime year 20 Isurace percetage (I c %) s $ Cargo capacity Y K to 9000 Aual maiteace-repair time Z bt hour 300 Daily idle time Z bk hour/day 3 Fuel cosumptio per km B (Mai+Aux.) f liter/km Lubricat cosumptio per B km (Mai+Aux.) o liter/km 0.11 Fuel price P f $/liter 0.26 Lubricat price P o $/liter 1.8 Aual operatio-maiteace cost C mo $/year 750,000 Iterest rate i 0.08 Discout rate r 0.1 Escalatio rate for future operatioal-maiteace cost Escalatio rate for future fuel cost e m 0.03 e f 0.02, 0.04, 0.06, 0.08, 0.1, 0.15 Escalatio rate for future isurace cost e s 0.03 Escalatio rate for future exteral cost e x 0.03 Waitig time betwee sequetial trips Z sa hour 9.00 Specific cost of accidet c ac $/to-km 6.00E-05 Specific cost of pollutio c p $/to-km 3.85E-04 Specific cost of oise c $/to-km 0.00E+00 Referece fulless ratio for specific exteral costs Y d * 0.7

7 A Ivestigatio for the Fuel Price Escalatios o Optimum 311 Uit trasportatio cost for various escalatio rates for future fuel cost (2%, 4%, 6%, 8%, 10%, 15%) of DWT cargo vessel at 1000 km route legth with respect to service speed ad fulless ratio (betwee 30% ad 100%) are show i Fig. 1, 2, 3, 4, 5 ad 6. Accordig to these six figures, uit trasportatio cost icreases with the icrease i service speed. Speed icrease effects specific fuel cosumptio of a vessel ad thereby, fuel costs icrease. Total trasportatio cost is also affected from this alteratio directly sice fuel costs are a compoet of total trasportatio cost. Icrease ratio i the uit trasportatio cost is more i lower fulless ratios (Tura, 2014). Speed icrease also effects the specific fuel cosumptio of the vessel ad directly the emissio ratios of the vessel sourced by the fuel. Speed regulatios o the vessels should be made ot oly cosiderig the trasportatio costs, but also the evirometal issues, air pollutio ad sustaiability. Fulless ratio of the vessel also alters the uit trasportatio cost. The decrease o the fulless ratio of the vessel causes a icrease i the uit trasportatio cost as see i the figures. Cost reductio rate is more i lower fulless ratios compared to higher ratios (Tura, 2014). Fig. 1.Uit trasportatio cost for 2% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014)

8 312 Eda Tura ad Bahri Şahi Fig. 2. Uit trasportatio cost for 4% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014) Fig. 3. Uit trasportatio cost for 6% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014)

9 A Ivestigatio for the Fuel Price Escalatios o Optimum 313 Fig. 4. Uit trasportatio cost for 8% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014) Fig. 5. Uit trasportatio cost for10% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014)

10 314 Eda Tura ad Bahri Şahi Fig. 6. Uit trasportatio cost for15% escalatio rate for future fuel cost with respect to service speed ad fulless ratio (Tura, 2014) Compariso of uit trasportatio cost for various escalatio rate for future fuel cost ratios (2%, 4%, 6%, 8%, 10%, 15%) with respect to service speed ad costat fulless ratio (Y d =0.7)have also bee preseted i Fig. 7. As specified for the above six figures, it is clearly reached that the service speed icrease causes a icrease i the uit trasportatio cost due to the fuel cosumptio rates. Moreover, it is figured out that, the more escalatio rate for future fuel cost occurs, the more uit trasportatio cost is calculated. It is also observed from Fig. 7 that alteratio of uit trasportatio cost has sharper icremet i the higher rates of fuel escalatio.

11 A Ivestigatio for the Fuel Price Escalatios o Optimum 315 Fig. 7. Compariso of uit trasportatio cost for various escalatio rates for future fuel cost (2%, 4%, 6%, 8%, 10%, 15%) with respect to service speed ad fulless ratio High fuel prices, i parallel with high fuel cosumptios due to icreasig speed lead to uecoomic situatios. Especially, after the global crisis started i 2008 i the shippig idustry, some Owers or ship maagers selected for slow-steamig alterative or layig up their vessels. Slow steamig is to reduce the speed as well as fuel cosumptios i order to reduce trasportatio costs ad thereby operatio of vessels i the optimum speed has become a sigificat poit. Optimum speed ca be defied as the speed that maitais miimum trasportatio cost. To illustrate how the optimum speed ca vary with respect to escalatio rate for future fuel costs, we have ru the model for six differet ratios ad the alteratio of optimal speed is show i Fig. 8. It is clearly see from Fig. 8 that optimum speed of the vessel alters cotrary with the escalatio rate for future fuel cost. The vessel should sail slower i the case of havig high fuel escalatio rates. The optimal speed has bee calculated aroud 11 kots durig the coditios of 2% fuel escalatios, whereas it is aroud 8 kots for 15% escalatio rates. This result is a sigificat output of this study sice it could be improved withi the scope of capacity or fleet optimizatio i the future studies by usig the proposed cost model.

12 316 Eda Tura ad Bahri Şahi Fig. 8. Alteratio of optimum speed with respect to escalatio rate for future fuel cost 4 Coclusio Uimodal cost calculatio approach has bee preseted for Uimodal cost calculatio approach has bee preseted for maritime trasportatio ad parameters effectig the trasportatio costs have bee cosidered. As a case study, DWT cargo vessel has bee cosidered ad uit trasportatio cost of this vessel have bee calculated cosiderig techical ad ecoomical parameters by usig levelised cost method i this study. Alteratios of uit trasportatio cost have bee ivestigated with the alteratio of service speed, fulless ratio ad escalatio rate for future fuel cost ratios. Route legth has bee assumed as 1000 km i the calculatios. The study has a ovelty due to the presetatio of a ecoomic model for uimodal trasportatio, speed optimizatio ad cosideratio of the sigificat parameters for cost estimatios durig aalysis. It is poited out that fulless ratio ad service speed of a vessel, which are the sigificat determiats for shippers, alter the trasportatio cost. These parameters have a importat value especially i the depressed market coditios as today. It is also observed that icremet of service speed icreases the uit trasportatio cost of the vessel. However, icrease i fulless ratio of a vessel decreases the same cost. Therefore operatig the vessel with more cargo is sigificat. I order to prevet high fuel cosumptios ad as well as high fuel costs, operators adopt

13 A Ivestigatio for the Fuel Price Escalatios o Optimum 317 slow-steamig applicatios i the maritime trasportatio i order for eergy efficiecy ad cost reductios. Escalatio rate for future fuel cost ratios which is a promiet factor for trasportatio cost aalysis have also bee cosidered i the study. It is preseted that uit trasportatio cost of a vessel icreases with the icremet of this escalatio rate cosiderably. The mai purpose of observig the effect of fuel escalatio rates was the determiatio of optimal speed ad its alteratio subject to fuel price fluctuatios. The study has a sigificat result for clearly idicatig the optimal speeds by usig proposed cost model. It is emphasized i the study that the vessel should sail slower at high fuel escalatio rates i order ot to icrease trasportatio costs. The study could also lead to future studies for the poit of ivestigatig emissio ratios for a specific route ad calculatig the evirometal hazards by usig proposed method. Refereces [1] F. Al-Khayyal & S. J. Hwag (2007): Ivetory costraied maritime routig ad schedulig for multi-commodity liquid bulk, Part I: Applicatios ad model. Europea Joural of Operatioal Research, 176, pp [2] X. Clark, D. Dollar & A. Micco (2004): Port efficiecy, maritime trasport costs ad bilateral trade. Joural of Developmet Ecoomics, 75, pp [3] K. Fagerholta & H. N. Psaraftis (2015): O two speed optimizatio problems for ships that sail i ad out of emissio cotrol areas. Trasportatio Research Part D: Trasport ad Eviromet Volume 39, pp [4] E. F. Magirou, H. N. Psaraftis & T. Bouritas (2015): The ecoomic speed of a oceagoig vessel i a dyamic settig. Trasportatio Research Part B, [5] Nuclear Eergy Agecy ad Iteratioal Eergy Agecy (2005): Projected costs of geeratig electricity. Nuclear Eergy Agecy ad Iteratioal Eergy Agecy. [6] B. Sahi & U., Kesgi (1991): Aalysig the effect of passeger trasportatio cost for operatioal parameters of the sea buses. 5th Coferece of Turkish Lloyd Associatio, pp , Istabul-Turkey (i Turkish). [7] B. Sahi, Z. Ozturk, H. Yilmaz & Y. Ust (2005): Trasportatio cost aalysis ad evirometal effects i trasportatio systems. Strategy of Trasportatio Master Pla, Miistry of Trasportatio of Republic of Turkey (I Turkish).

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