Daily Vessel Operating Expense: Shipping Cost per Ownership Day

Daily vessel operating expense measures recurring vessel operating costs on a per-day basis, usually using ownership days as the denominator.

A common formula is:

1Daily Vessel Operating Expense = Vessel Operating Expenses ÷ Ownership Days

What vessel operating expense commonly includes

Issuer definitions commonly include items such as:

• crew wages and related costs;
• insurance;
• routine repairs and maintenance;
• spares and consumable stores;
• lubricants or other vessel supplies;
• tonnage taxes; and
• other vessel-level operating costs.

The exact composition varies.

What it usually excludes

Daily vessel operating expense is not the same as total company cost per day.

It commonly excludes some or all of:

• voyage expenses such as bunkers and port charges;
• charter-hire expense;
• depreciation;
• interest expense;
• corporate general and administrative expense; and
• drydocking or special-survey costs depending on the issuer presentation.

That is why the metric cannot be subtracted mechanically from Time Charter Equivalent Rate to produce a GAAP operating margin.

Why ownership days are used

Vessel Ownership Days provide a time-weighted fleet-size denominator.

If a company incurs $24 million of vessel operating expense over 4,000 ownership days:

1Daily Vessel Operating Expense = $24,000,000 ÷ 4,000
2                               = $6,000 per ownership day

This helps investors distinguish fleet expansion from per-vessel cost inflation.

Total expense versus daily expense

Suppose total vessel operating expense rises 12%, but ownership days rise 15% because the company bought more ships.

Daily vessel operating expense may actually decline.

Conversely, flat total expense with a shrinking fleet can imply higher per-day costs.

The daily metric therefore adds information that total expense alone does not provide.

TCE versus daily vessel operating expense

A simplified operating spread is sometimes viewed as:

1TCE Rate - Daily Vessel Operating Expense

That can be useful for rough vessel-level economics, but it is not a complete profit measure because the two metrics can use different denominators and exclude different cost categories.

Investors still need to account for:

• charter-in cost;
• drydock economics;
• general and administrative expense;
• depreciation;
• financing cost; and
• vessel acquisition or disposal effects.

Drydock treatment matters

Some issuers present daily vessel operating expense including drydocking-related amounts; others exclude drydock or pre-delivery expense in an adjusted daily figure.

Scheduled drydock also reduces Vessel Available Days, so maintenance can affect both cost and revenue-capacity metrics.

Fleet mix matters

Per-day cost varies with:

• vessel class and size;
• vessel age;
• flag and crewing structure;
• insurance markets;
• maintenance cycle;
• management arrangements; and
• geography.

A higher daily opex figure is not automatically evidence of poor cost control if fleet mix changed materially.

Filing examples

Genco defines daily vessel operating expense as vessel operating expense divided by ownership days and identifies crew, insurance, repairs, spares, stores, tonnage taxes, and miscellaneous expenses in the measure. Safe Bulkers reports both daily vessel operating expense and a version excluding drydocking and pre-delivery expenses. Performance Shipping likewise reports daily operating expense alongside ownership, available, and operating days.

Sources:

• Genco Shipping & Trading 2025 Form 10-K
• Safe Bulkers 2025 Form 20-F
• Performance Shipping 2025 Form 20-F

Bottom line

Daily vessel operating expense measures recurring vessel-level cost per day, usually using ownership days. It is useful for separating fleet-size changes from cost inflation, but investors should preserve cost composition, drydock treatment, fleet mix, and denominator definitions before making peer comparisons.

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