Additional Costing Equations for Jointly-Operated Container Shipping Services to measure the Effects of Variations in Fuel and Vessel Hire Costs

This paper proposes new equations to calculate shipping costs and slot distribution when working in a shipping alliance environment. The fixed costs and capacity are shared by a predetermined ration of contributed containerships for the jointly-operated service route. The exchange rate of slot-exchange pattern depends on the relative ration of both round-voyage sailing days. Each contributing shipping company needs to estimate and account for the voyage fixed costs of each component serviced route in the agreement. This paper also simulates the effects that bunker cost and vessel hire changes have on shipping costs. The examination indicated the fixed costs are US$424 per TEU in 2010, with 63.1% attributable to bunker costs and 24.04% to containership costs. The validation shows the peak of charter hire in 2006, the fixed costs were estimated US$637 per TEU, with 63.92% attributable to containership costs and 27.53% attributable to bunker costs. (for ship of a capacity of 1,100 TEUs and 28 round trip days). The results proof the proposed equations can represent cost and are helpful for container carriers to maintain market competition.