Ship Crew

The preparation of operating budgets is one of the most important parts of the ship manager’s job.  For a vessel which is already part of the managed fleet, the preparation of the budget is normally fairly straight-forward because the manager already knows the ship and her characteristics from experience.  Things are different when trying to prepare a budget estimate for a new or a newly acquired ship.  Clearly the more information about a new ship due to come under management which is made available to the manager in advance, the more accurate will be the budget forecast. Ideally the manager will have had an opportunity of carrying out a technical inspection of the ship and examination of Class Records before preparing the budget, but this is not always possible if the owner requires a preliminary budget estimate on the basis of an unseen ship.  As a very minimum, the manager will require to know the size, type and age of a vessel, the type of main and auxiliary engines, intended registry, crew and if possible trading pattern.  These main assumptions should be clearly explained in the budget estimate, not forgetting to state rates of exchange used when converting from one currency into another. Individual owners may prefer a different lay-out or list of headings.  The figures have been simplified for illustrative purposes.  The following sections deal with the main cost headings which appear in this typical budget estimate. The budget sets out the assumptions on which the crew costs have estimated in terms of numbers and nationalities of crew-members.  An experienced personnel department in a ship manager’s office will be able to budget the main elements of the crew cost to a very accurate degree.  It must be remembered that the owner is not so much concerned over the individual pay levels of the crew members but is rather looking for the total cost over a year of manning the ship.  For instance an Officer may receive an annual salary of, say, USD 30,000, but if he is entitled to one month’s leave for every two served, the manager must employ 1.5 Officers to fill the post.  Thus the total annual cost to the owner becomes USD 45,000.