Crew Wage

Crew wage costs therefore need to be enhanced to take into account not only leave entitlement but also any overlap time between individuals leaving and joining the ship.  Some management companies refine this concept further by working on a “unit cost” basis.  This means that they work out the average cost of filling each rank in their ships over a 12 month period and applying that cost factor across the board.  Due allowance must also be made for any crew bonuses (e.g. tanker service bonus) together with social costs, insurance contributions, pension funds etc.  Ratings overtime, if not consolidated, has also to be estimated based on the manager’s experience of the trade in question. In addition to direct crew costs, the managers should make provision in some way for crew establishment costs.  These are the expenses involved in keeping properly qualified and trained crew available for the ships under their management.  Such costs as recruiting expenses, training allowances, cadet training, study leave, stand-by and sick pay are all part of the cost of providing crews and have to be paid for in some way or other by the owners.  In certain cases some of these costs may be offset by various national government assistance schemes.  The establishment costs may either be apportioned over the managed fleet as a direct charge or, in some cases, a fixed sum contribution from the owners is negotiated by the managers. Crew travel and repatriation expenses are particularly difficult to budget accurately unless the ship is a liner engaged on a regular trading route.  An element of educated guesswork is called for here by the manager based on the anticipated frequency of crew reliefs.  A final element under crew costs covers sundry medical expenses which are not otherwise recoverable under the terms of the P & I Club entry.