Rajan Wilcox
The cost of refuelling a container ship varies depending on the type of fuel used, the size of the ship, and the route taken. Fuel is the single biggest expense when it comes to running a ship, accounting for around 50% of a ship's total running costs. The three main types of fuel used by container ships are Heavy Fuel Oil (HFO), Marine Gas Oil (MGO), and Very Low Sulphur Fuel Oil (VLSFO). The price of VLSFO can be as high as $2 million for a common voyage from Singapore to Rotterdam. The cost of refuelling a ship can also depend on the regulations of the ports and regions it visits. For example, the world's third-biggest container port, Shenzhen, has imposed a limit on the sulfur content of fuel used by ships, which can increase fuel costs. The cost of refuelling a large container ship can be as high as $14 million, with fuel consumption ranging from 217 tons to 433 tons per day.
| Characteristics | Values |
|---|---|
| Cost of bunker fuel | $552 per ton |
| Fuel consumption of a large modern container vessel | 217 tons per day |
| Fuel cost for a 28-day round trip voyage | $3,353,952 |
| Difference in price between HFO and LSFO | $200 per tonne |
| Cost of LSFO | $600 per tonne |
| Scrubbing technology cost of installing a scrubber system for a 20,000 TEU ship | $8 million |
| Average bunker prices in Houston, Texas, from May to November 2023 | Not found |
| Fuel cost for Queen Elizabeth II to sail between New York and Southampton for six days | $2,000,000 |
| Fuel cost for a 14-day voyage using VLSFO | $3,550,000 |
| Percentage of a ship's total running costs that fuel typically accounts for | 50% |
| Cost to fill up the largest container ship | $14 million |
| Fuel consumption of a container ship | 80,000 gallons of fuel a day at sea |
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What You'll Learn
Fuel cost depends on the type of fuel used
The fuel cost for container ships depends on the type of fuel used. The price of ship fuel has been fluctuating and has recently surged to a new wartime peak of $1,000 per ton. The price of ship fuel is currently the highest it has been since 2013.
Ships that 'scrub' emissions earn twice as much as those that don't. Scrubbers are widely used by larger vessels that specialize in long-haul runs as they spend most of their time in transit, burning fuel. Under IMO 2020, ships that use exhaust-gas scrubbers can continue to burn cheaper high-sulphur fuel oil (HSFO). The higher the discount of HSFO to very-low-sulphur fuel oil (VLSFO) is, the more money ship operators save by using scrubbers.
However, the use of scrubbers has environmental implications. The global shipping industry is facing a key regulatory decision that could mark a milestone in reducing maritime pollution. The International Maritime Organization's (IMO) Marine Environment Protection Committee is considering imposing a global cap on SOx emissions from 2020 or 2025 onwards, which would see sulfur emissions fall from the current maximum of 3.5% of fuel content to just 0.5%.
Ship owners can comply with these tighter controls by either switching from bunker fuels to diesel or liquefied natural gas (LNG), or by fitting scrubbers to clean exhaust emissions. The first choice of switching fuels will also increase the cost of fuel. For example, the additional cost for a 20,000 TEU ship would be $50,000 a day. Low-sulphur fuel oil (LSFO) currently costs around $600 per tonne, compared to $460 12 months ago.
The amount of fuel used by a container ship depends on its speed and engine capacity. A Panamax container ship can consume 63,000 gallons of marine fuel per day at top speeds. Fuel use drops sharply as speeds decrease. For example, a container ship can decrease fuel use by close to one-third if it drops its speed by 10%.
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Fuel costs are influenced by speed and route
Fuel costs for container ships are influenced by a variety of factors, including speed and route. The speed at which a ship travels can have a significant impact on fuel consumption and, consequently, fuel costs. For example, a containership of around 8,000 TEU (twenty-foot equivalent units) would consume about 225 tons of bunker fuel per day at a speed of 24 knots. However, at a speed of 21 knots, the consumption drops to about 150 tons per day, a 33% decline. This is known as "slow steaming," where ships run their engines below capacity to save fuel consumption, even though it may result in longer travel times.
The concept of slow steaming gained prominence during the financial crisis of 2008-2009, when international trade and the demand for containerized shipping decreased while new capacity came online. Maritime shipping companies adopted slow steaming to accommodate additional ships with similar port call frequencies. With rising fossil fuel prices, slow steaming has become a cost-cutting strategy, and over 50% of global container shipping capacity operated under these conditions as of 2011.
The route that a container ship takes can also impact fuel costs. Different routes may have varying distances, weather conditions, and trade types, all of which can influence fuel consumption. For instance, longer routes or those with adverse weather conditions may result in higher fuel usage. Additionally, the type of trade involved can play a role, as time-sensitive retail trade may require faster speeds and higher fuel consumption, whereas the transport of low-value goods like waste products can be less impacted by slower speeds.
To optimize fuel efficiency and reduce costs, shipping companies may consolidate routes to serve more locations with fewer ships and employ strategies such as improved hull and propeller monitoring to reduce resistance and enhance efficiency. Additionally, regulatory decisions aimed at reducing maritime pollution, such as imposing caps on sulfur emissions, are expected to significantly impact fuel costs. For example, switching from high-sulfur bunker fuels to low-sulfur alternatives or liquefied natural gas (LNG) can increase fuel costs, leading shipping companies to explore alternative compliance methods like installing scrubber systems to clean exhaust emissions.
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Fuel costs are a ship's biggest expense
The three main types of fuel used by ships are Heavy Fuel Oil (HFO), Marine Gas Oil (MGO), and Very Low Sulphur Fuel Oil (VLSFO). The price of these fuels can differ significantly, with VLSFO being the most expensive due to its lower sulphur content. For example, low-sulphur fuel oil (LSFO) costs around $600 per tonne, while the difference in price between HFO and LSFO is around $200 per tonne.
The amount of fuel used by a ship depends on its speed and engine capacity. A Panamax container ship can consume 63,000 gallons of marine fuel per day at top speeds, while larger container ships can consume over 80,000 gallons of fuel per day. The CMA CGM Benjamin Franklin, one of the world's largest container ships, consumes 330 tonnes of fuel per day at an average speed of 25 knots.
The cost of refuelling a large container ship can be substantial. For example, it costs approximately $3,550,000 to operate the Queen Elizabeth II on VLSFO for 14 days. The cost of refuelling the largest container ships can be as high as $14 million, which is a significant expense, even when compared to the ship's construction costs.
To reduce fuel costs, shipowners can switch to more efficient fuels or install scrubber systems to reduce emissions. However, these options come with additional costs, and it is important for ship officers to plan and execute safe and economical routes to optimise fuel efficiency.
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Regulations can increase fuel costs
The global shipping industry is facing a critical regulatory decision that could significantly impact fuel costs. The International Maritime Organization's Marine Environment Protection Committee is taking steps to reduce maritime pollution by proposing a cap on SOx emissions, specifically targeting a reduction in sulfur emissions from 3.5% to 0.5%. This decision could nearly double fuel costs for the industry, which is already facing challenges due to rising fuel prices.
One of the primary ways to comply with these tighter emissions controls is by switching from high-sulfur bunker fuels to lower-sulfur alternatives like diesel or liquefied natural gas (LNG). However, this transition comes at a cost. For instance, the price difference between high-sulfur fuel oil (HFO) and low-sulfur fuel oil (LSFO) can be around $200 per tonne, significantly impacting the overall fuel costs for a 20,000 TEU ship by $50,000 per day.
Another option for shipowners is to invest in scrubbing technology to clean exhaust emissions. While the installation of scrubber systems can cost around $8 million, this investment can be recouped in about six months due to the savings on cheaper high-sulfur fuels. However, the effectiveness of scrubbers has been questioned, and some ports, like Shenzhen, the world's third-biggest container port, have implemented restrictions on sulfur content in fuels, leaving shipowners with limited options but to switch to more expensive low-sulfur fuels.
Additionally, the broader energy transition towards "green" fuels, such as LNG or methanol, is expected to further increase fuel costs. LNG is already significantly more expensive than traditional fuel oil, and a switch to green methanol could increase fuel costs by approximately 350%, according to estimates.
While these regulatory measures are essential to reducing pollution and improving environmental sustainability, they undoubtedly place a financial burden on the shipping industry, which will need to adapt to these changing fuel dynamics and pass on some of these increased costs to cargo customers.
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Fuel costs vary depending on the ship's size
The cost of refuelling a ship depends on the type of fuel loaded. For example, Heavy Fuel Oil (HFO), Marine Gas Oil (MGO), and Very Low Sulphur Fuel Oil (VLSFO) all have different prices and cleanliness. The price of fuel also varies depending on location; for example, the average price of ship fuel in Houston, Texas, differs from the price of fuel in other ports.
The size of a container ship also influences its fuel consumption. A Panamax container ship, for instance, can consume 63,000 gallons of marine fuel per day at top speeds ranging from 20 to 25 knots per hour. Slowing down a container ship can decrease fuel consumption by as much as one-third. However, this may require more ships to maintain schedules.
The CMA CGM Benjamin Franklin, one of the world's largest container ships, consumes 330 tons of fuel per day at an average speed of 25 knots. With the cost of bunker fuel at $552 per ton, a single 28-day round trip voyage for this vessel would cost $3,353,952. This assumes a fuel consumption rate of 217 tons per day.
The Queen Elizabeth II consumes 433 tons of fuel for each of the six days it takes her to sail between New York and Southampton, totalling 2,598 tons of fuel. If this ship burns VLSFO, the fuel cost would be nearly $2,000,000.
The MV Colombo Express has a cargo capacity of 93,750 tons, but its fuel capacity is unclear. The Emma Maersk, the world's longest in-service ship, is estimated to cost $14 million to fill up with the lowest-grade oil.
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Frequently asked questions
The cost of refuelling a container ship varies depending on the type of fuel used, the size of the ship, the speed of the ship, and the route taken. For example, the Queen Elizabeth II consumes 2,598 tonnes of fuel sailing between New York and Southampton, costing $2,000,000. A single 28-day round trip voyage for a large modern container vessel with a maximum container capacity of 7,750 TEUs would produce a fuel bill of $3,353,952. The cost of refuelling a ship can also depend on the regulations in place, such as those implemented by the International Maritime Organization (IMO) to reduce sulphur emissions, which can increase fuel costs.
The fuel consumption of a container ship is influenced by several factors, including the size and speed of the ship, as well as the route taken. Larger ships, such as ultra-large container ships, consume more fuel than smaller Panamax ships. Higher speeds result in increased fuel consumption, while slower speeds can reduce fuel use. The route taken can also impact fuel consumption, as more fuel may be required to maintain schedules if slower speeds are utilised.
The fuel consumption of container ships has a significant impact on the environment due to the large volume of fuel burned and the resulting emissions. A single container ship can emit as much pollution as millions of cars operating for an entire year. For example, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world's 760 million cars. Container ships primarily utilise heavy fuel oil, which produces a significant amount of greenhouse gases. However, there is a growing focus on reducing emissions through the use of lower-sulphur fuels, scrubber systems, and the development of zero-emission fuels and propulsion methods.
