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Tanker earnings potential tool unveiled
Tanker pool manager Signal Maritime has introduced a monthly Position Value concept to enable tanker owners to capitalise directly from the geographic position of their vessels on entering or exiting its pools
Tanker owners traditionally make an assessment based on experience and by calculating round trip earnings on voyage charters to assess the value of each geographical area.
At any given moment, each tanker’s opening position holds an earning potential that reflects the condition of all relevant markets.
Signal Maritime’s Position Value model analyses the historical voyages of a given vessel class to understand the market structure, including flows and frequency.
“At any given moment, a vessel’s opening position holds an earning potential,” explained Signal Maritime Services chief executive Panos Dimitracopoulos.
“We have developed a price tag for all geographic trading areas which allows us to price spot time charters in a way which factors the vessel’s earning potential on pool entry or exit.”
The model utilises data for port and canal expenses, current market rates, average fuel consumption and bunker prices to calculate the time charter equivalent for each potential voyage.
The Position Value determines the potential earnings of a vessel based on its geographic position considering market conditions, historical data and every trading option.
Next, the model identifies the most profitable sequence of voyages for any location worldwide, given the current market conditions and most common flows and this analysis derives the Position Value of each area, representing its earnings potential.
In a case study, Signal Maritime compared the earnings potential of an Aframax tanker opening in Trieste. The vessel could embark on a transatlantic voyage to the US, generating a TCE of US$30,000 per day for about 30 days.
But what is the earning potential of a voyage east?
Position Values reveals the US Gulf constitutes US$700,000 versus Singapore at US$550,000 – and therefore the Mediterranean-Singapore voyage needs to yield more than US$70,000 per day to surpass the transatlantic option, given the market conditions.
“In a highly volatile market, owners have many options and it is important our flexible pool model gives our partners the opportunity to time their moves as profitably as possible without harming the other pool partners or themselves,” said Mr Dimitracopoulos.
“Ultimately, Position Value is a zero-sum game which supports the sophisticated triangulation and trading strategies needed to run a successful tanker operation,” he added.
The algorithm-derived values are checked by the Signal Maritime team, shared with partners and then applied. Signal Maritime also offers its partners a free seat at its London, Singapore or Athens-based chartering desks to allow them to gain a full understanding of the way in which values are derived and used.
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