Almost 40% of tug operating costs go on crew – but it is worth every Euro

Almost 40% of the operating expenditure of a tugboat fleet is spent on crew wages, which is a heavy burden on owners.

Tug operators rely on their experienced and well-trained crew to enable safe towage and ship berthing in ports worldwide.

Without these essential assets, owners would struggle to provide secure towage and harbour operations.

A trained tug master can manoeuvre the tug close to the bow of an approaching ship for attaching towing lines and position a vessel safely to its berth.

But, with tight margins in the towage sector, estimated to be just 8% in Europe, every Euro counts. And tug owners are looking for areas to reduce costs wherever possible.

In Europe, tug owners operate in a competitive market where shipping lines and ports continue to cap towage prices.

According to the European Tugowners Association (ETA), from a survey of its members, 39% of operating costs are on crew wages.

ETA members spend in total €440M (US$477M) on crew wages, out of €1.13Bn of operating costs in a year.

The next largest costs for owners are 15% in repairs and maintenance and then 15% on asset depreciation.

Fuel costs are also a substantial proportion of operating expenditure at 12%, which is why owners are interested in adopting alternative fuel technology.

It is also why training crew to manage consumption can produce positive results on operating margins.

Successful tug owners invest in their seafarers and training centres around Europe. For example, Kotug International operates its own division, Tug Training & Consultancy, with a 360˚ tug simulator, training vessel and other desktop simulators.

• Training for a revolution in ship fuel
• Safe tug handling practice on simulators
• LNG bunker vessel simulator underpins rising demand for ‘hands-on’ training

Other owners, such as Iskes Towage, Svitzer and Boluda, have their own training simulators and facilities, while others use training centres with specialised equipment.

These crew investments provide returns in port safety, reliable maritime and harbour logistics and revenue for tug owners. ETA estimates every well-trained crew member earns his or her owner €111,000 a year, so owners should look elsewhere for cost savings.