Weighing the Costs

With freight markets that are continuing to buck historical trends so far this season, shipowners are faced with a new set of challenges. Although ever optimistic, shipowners in the spot market are struggling to manage rising operating expenses and other associated voyage costs. With crude oil prices tapping record highs, managing the fuel bill has become increasingly important. The chart below shows historical prices for Intermediate Fuel Oil (IFO 380) in two different markets, Houston and Singapore, as compared to Worldscale (WS) Rates. Today, IFO prices exceeded $500 per metric ton in Singapore marking a 217% increase from the start of 2004.