Cost index for domestic sea transport, Q2 2017
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About the statistics
Definitions
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Name and topic
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Name: Cost index for domestic sea transport
Topic: Transport and tourism
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Next release
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Responsible division
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Division for Energy, Environmental and Transport Statistics
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Definitions of the main concepts and variables
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Weights, vessel groups and cost groups
The cost distribution for the different vessel groups are based on features for a representative vessel and are derived from the surveys mentioned in 3.2.
Ferries are defined as vessels that transport cars in relation to inland road network &– car ferries. Passenger vessels are divided into small and larger boats. These vessel groups constitute all passenger boats that transport passengers in inland traffic. We divide between boats that fall within International Code of Safety for High-Speed Crafts and those which fall outside. The International Code of Safety for High-Speed Crafts have requirements to vessels based on amongst other distance to emergency port, number of passengers and speed. Thus, the distribution of costs for small and larger vessels will differ. In practice the operational difference means that small passenger ships are shorter than 24 meters, whilst large passenger ships are longer than 24 meters. Cruiseships are defined as passenger ships with the main goal to provide a tourist experience and to offer sleeping accommodation. Tugs cover ships that do not directly transport goods or passengers, but offer service in ports or along the coast. In the group consisting of other cargo ships are all vessels which mainly transport goods like for example oiltanks, bulk or mixed cargo.
Fuel costs are expenses directly connected to the consumption of fuel. From the 2nd quarter of 2009 until and including the 4th quarter of 2016 the fuel costs are measured without taxes. From the 1st quarter of 2017 the fuel costs also include taxes on CO2 and sulphur emissions. Crew costs are the total expenses related to seamen in the shipping company. From the 2nd quarter of 2017 the crew costs include more crew cost components, such as regular and irregular supplements to the wages, overtime pay, bonus and vacation money. Repair and maintenance cost are deactivated expenses to the reparation and maintenance of ships. Administrative costs are the companies’ costs which are not directly connected to the operation of the vessel, like for example accounting. The rest of the operational costs are covered by the group consisting of other costs .
Capital costs are costs incurred on the purchase of real capital goods. By having capital tied up in fixed assets, realcapital, the costs can be divided into depreciation (Capital wear) and financing costs (interest costs). Depreciation is related to costs incurred due to wear or decrease in the value of fixed assets. In accounting this corresponds to amortization. Financing costs is the compensation resulting from the fact that capital is displayed. Liabilities are split into debt and equity capital. The cost index do not include the compensation to equity capital and capital costs relating to financing has is its accounting parallel to expenses for debt service.
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Standard classifications
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Not relevant.
Administrative information
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Regional level
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Not relevant
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Frequency and timeliness
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Not relevant
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International reporting
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Not relevant.
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Microdata
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Microdata, information from the sample and cost observation units is temporary stored in the high-level language SAS program and for the long term is stored as text files.
Background
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Background and purpose
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The cost indices describe the price development for input factors within inland water transport. In addition to the total index for the whole industry, sub indices for 5 different types of vessels are also presented. The index ignores gains in productivity and changes in profit margins.
The need for the index was requested at the advisory group for sea transport in 2008. The motivation for Statistics Norway is to increase the amount of statistics with high interest and contribute to ensure the quality level of other economical statistics. The development of the index started the same year, whereas the ordinary data collection started in the second quarter of 2009.
The statistic was developed in cooperation with the Norwegian Public Road Administration and different maritime transport companies, represented by the Federation of Norwegian Coastal Shipping. The final election of methods was the responsibility of SSB.
The development of the index was financed by the Norwegian Public Road Administration and the Federation of Norwegian Coastal Shipping. The production cost was financed by the Federation of Norwegian Coastal Shipping.
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Users and applications
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The statistic is used by maritime transport companies and public authorities for regulation of long term contracts in the sea transport.
Other users are the national accounts, companies outside the industry with the need for indexation of cost in relation to sea transport as well as public and private organizations with need of analyzing the cost development in the industry. SSB uses the statistic to ensure the quality of the Operating survey for vessels in water transport and the Structural Business Statistics.
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Equal treatment of users
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Not relevant
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Coherence with other statistics
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The Cost index for road goods transport describes the development of the cost level for road goods transport. The construction of the cost index for inland water transport is constructed by using the same templet as that one.
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Legal authority
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Statistics Act §§ 2-1, 2-2 and 2-3
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EEA reference
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Not relevant.
Production
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Population
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The analysed units are companies within inland water transport. To these group belongs (according to the Standard Industrial Classification. SIC2007):
- 50.102 Scheduled long distance passenger transport in coastal waters.
- 50.109 Other passenger transport in coastal waters.
- 50.202 Freight coastal transport.
- 50.203 Tugs
The industry subclass "50.204 Supply and other sea transport offshore services´´ is held outside the sample.
The cost of the enterprises are divided as follows:
- Crew costs
- Repair and maintenance costs
- Fuel costs
- Administrative costs
- Other costs
- Capital costs &– depreciation
- Capital costs - financing
The statistic is produced after the following type of vessels:
- Ferries
- Small passenger boats
- Larger passenger boats
- Tugs
- Other cargo ships
From the 2nd quarter of 2009 until and including the 4th quarter of 2016 the vessel type cruise ships was also included. More about cost &– and vessels groups in division 3.2-3 and 4.1
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Data sources and sampling
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3.2. Data sources
Crew expenses data are collected from the Division for Income and Wage Statistics. The data is used to produce the Wage statistics. labour cost index . The division for Income and Wage Statistics produces quarterly indices for the industry subclass level mentioned above in 3.1.
The sub-indices for ferries, large passenger boats and small passenger boats use the crew cost development for industry subclass 50.102. The sub-index for other cargo ships use the crew cost development for industry subclass 50.202, whilst the sub-index for tugs use the crew cost development for industry subclass 50.203.
The repair and maintenance cost data is collected from invoiced prices on labour from Norwegian shipyards. The data is collected by a questionnaire.
Prices on fuel data is collected from the Division for Price Statistics. The prices are collected from the largest enterprises in relation to sale of marine fuel oil. The data is used in the production of Price index of first-hand domestic sales.
Administration cost data is measured by following the development in the labour costs within industries which operate within professional, scientific and technical activities. The statistic is also composed by the Division for Income and Wage Statistics. See the link under the crew expenses.
Other operational cost data is collected by the use of Consumer price index from the 2nd quarter of 2009 until and including the 4th quarter of 2016. From the 1st quarter of 2017 the sub-index for other operational costs use the consumer price index excluding energy products (CPI-AE).
Capital cost in terms of depreciation is measured by use of Producer price index for investment goods which is published by the Division for Price Statistics in the Consumer price index
For the calculation of capital cost, in terms of interest rate, the 3-month nominal NIBOR (Norwegian Inter Bank Offered Rate) is used. The NIBOR is published by Norwegian Inter bank and the variations in the price levels of the consumer price index.
The weight for the distribution of costs in the different type of vessels used from the 2nd quarter of 2009 until and including the 4th quarter of 2016 is based on the Operating survey on short sea and domestic sea transport 2006. The data have been supplied with later years of Operating survey for vessels in water transport , financial statements and historic cost data from the Norwegian Public Road Administration and several county council authorities. The weights for the distribution of costs in the different types of vessels used from the 1st quarter of 2017 are based on income statement data (næringsoppgaver) and surveys reported from the largest companies in the domestic sea transport industry. An overview of the existing and historical weights is given in 3.6.
The sample for the produced indices at SSB is described in detail in each statistic. See the links in 3.2. For some cost groups the cost index demanded a special adjustment.
For crew expenses the ordinary sample in the labour cost index was extended to all industry subclasses mentioned in 3.1. The reason is that the original sample in these industry subclasses was chosen on the bases of a publication on the highest industry level of transport.
The sample of shipyards for the calculation of prices for repair and maintenance includes 26 Norwegian yards which have industry code (SIC 2007) 35.150 Repair and maintenance of vessels and pleasure boats.
An extension of the sample was also needed for the calculation of prices for engine fuel. This was due to the original being based on a production index for a higher level of the goods referring to mineral oil and mineral oil products.
For administration costs, capital costs and other costs the sample in the data source is the same as the one at the original statistic producer.
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Collection of data, editing and estimations
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The data collection is done by gathering data from the statistic producer (engine fuel and crew expenses), direct use of published figures (labour cost index, consumer price index, NIBOR and producer price index) as well as a questionnaire sent by mail (repair and maintenance).
The questionnaire used for repair and maintenance is RA-0677 Agreed or contracted man-hour rate for repair and maintenance of vessels and it is sent out after the end of each quarter with a deadline two weeks later.
The control of the price data is done by juxtaposition. A large deviation between periods is confirmed by the statistic producer for the internal generated price measures, and with the reporting enterprises for the data collected by the questionnaire for repair and maintenance.
The weight for the distribution of costs within the different type of vessels used from the 2nd quarter of 2009 until and including the 4th quarter of 2016 is done based in the operating survey on water transport from 2006-2007 (Link to source in 3.2). The data is used to estimate operational costs for a representative vessel in the group of vessels. The operational costs is supplemented with model based capital costs. The capital cost is calculated through a model which is based on prices of new vessels, life time, remaining value and real interest rates. The depreciation is put forward by assuming linear amortisation on prices for new vessels.
A serial loan with the sum borrowed equal to new price minus remaining value, calculated by use of real interest rate, gives average yearly interest costs. The remaining value is set to 10 per cent. For amortisation and financing of loan, the time horizon is set to 30 years.
The weights for the respective vessel types used from the 2nd. Quarter 2009 until and including the 4th quarter of 2016 are:
Ferries
Small passenger boats
Larger passenger boats
Cruiseships
Other cargo ships
Tugs
Fuel costs
17.3
16.5
19.0
10.5
19.3
15.0
Crew costs
43.0
38.2
47.5
18.8
35.8
46.2
Repair and maintenance costs
9.4
8.3
7.0
7.0
11.0
8.7
Administrative costs
3.3
7.2
3.5
17.4
5.0
8.8
Other costs
8.1
13.1
9.0
32.2
6.9
4.0
Capital cost &– depreciation
13.0
11.5
9.6
9.7
15.1
11.9
Capital cost - financing
5.9
5.2
4.4
4.4
6.9
5.4
Sum
100.0
100.0
100.0
100.0
100.0
100.0
The weights for aggregating to a total index is based on the Structural Business Statistics and Operating survey for vessels in water transport from the 2nd quarter of 2009 until and including the 4th quarter of 2016. These are:
Ferries
Small passenger vessels with high speed craft
Larger passenger vessels with high speed craft
Cruise vessels
Other cargo vessels
Tow vessels
Distribution of costs
30.0
5.0
13.3
26.7
21.0
4.0
The weight for the distribution of costs within the different type of vessels used from the 1st quarter of 2017 are estimated using income statement data (næringsoppgaver) and surveys to the largest companies in domestic sea transport. The data is used to estimate operational costs for a representative vessel in the group of vessels. The operational costs is supplemented with model based capital costs. The capital cost is calculated through a model which is based on prices of new vessels, life time, remaining value and real interest rates. The depreciation is put forward by assuming linear amortisation on prices for new vessels.
The weights for the respective vessel types used from the 1st quarter of 2017 are:
Ferries Small passenger boats Large passenger boats Other cargo ships Tugs Fuel 18,8 21,0 23,0 24,5 8,6 Crew 39,6 33,3 32,2 34,6 43,1 Repair and maintenance 9,7 11,9 10,0 11,1 13,6 Administrative costs 5,5 3,8 7,3 4,9 10,8 Other operational costs 10,3 13,5 12,3 8,7 1,7 Capital costs - Deprecation 11,3 12,5 10,9 11,3 13,1 Capital costs - Financing 4,9 3,9 4,2 4,8 9,0 Sum 100,0 100,0 100,0 100,0 100,0 From the 1st quarter of 2017 sub-indices for vessel types are also published without the fuel component. In practice this means that all other cost groups than fuel get higher weights.
The weights for the respective vessel types without the fuel Component used from the 1st quarter of 2017 are:
Ferries Small passenger boats Large passenger boats Other cargo ships Tugs Fuel - - - - - Crew 48,8 42,2 41,9 45,9 47,2 Repair and maintenance 12,0 15,1 12,9 14,7 14,9 Administrative costs 6,7 4,8 9,5 6,5 11,9 Other operational costs 12,6 17,1 16,0 11,5 1,9 Capital costs - Depreciation 13,9 15,8 14,2 15,0 14,3 Capital costs - Financing 6,0 4,9 5,5 6,4 9,8 Sum 100,0 100,0 100,0 100,0 100,0 The weights for aggregating to a total index used from the 1st quarter of 2017 are based on the Structural Business Statistics and are:
Ferries Small passenger boats Large passenger boats Other cargo ships Tugs Distribution of costs 41,0 4,2 7,2 38,4 9,2 Prices
The cost groups corresponding to prices collected in terms of an index value are processed as actual observable prices. For calculating capital costs in terms of interest rates 3 months NIBOR published by the Norwegian Inter Bank and variations in the price level given by the consumer price index. Monthly interest rate observations from the Norwegian Inter Bank are added a loan margin and are adjusted by the inflation from the previous period. The loan margin is equal to the difference between NIBOR and interest rate on loans to non-financial private enterprises given by Interest rate statistics for banks and other financial corporations in the years of 2006 and 2007. The yearly figures are chosen due to the remaining cost data collected for this period.
The index calculation consist of several steps:
1. Determining weights
2. Collecting prices
3. Calculating elementary indices
4. Aggregation based on vessels, costs or totalindex
The elementary indices are calculated as geometrical average of the price relatives in the cost groups. With 5 vessel groups and 7 cost groups we obtain 42 elementary indices. Aggregation to sub indices and a total index for the industry is based on Laspeyres method.
Notice that the aggregation of the published sub indices on the cost groups with the goal to make a total index on vessels may not give the same index figures which are published for the actual vessel. This is due to the method used for chaining the index
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Seasonal adjustment
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Not relevant
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Confidentiality
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3.7. Confidentiality
No data can ascribe to a given enterprise. There are two reasons for this. These are:
1. The weights for the distribution of costs should reflect a representative vessel.
2. The weights for the capital costs are model based and are not equal to those found in financial accounts.
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Comparability over time and space
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The calculation method of the index was updated in the 1st quarter of 2017, with new weights. The reference period was changed to the 4th quarter of 2016. As a part of the update, the periods before 4th quarter of 2016 were chained, using the new reference period as 100. This secures comparability over time before and after the update.
The index values for the 4th quarter of 2018 and 1st quarter of 2019 were corrected on september 20th, 2019. The adjustments were due to errors in the calculation of the index following a change in the production system of the index. More detailed information about the adjustments can be found in the footnotes of tables 11585 and 11586.
The index values for the 3rd quarter of 2020 were corrected on March 24th, 2020. Adjustments were made due to errors in the calculation of capital costs, in terms of interest rates. This error resulted in low index values for all vessel types in both indices. In the index containing fuel costs, the index number for the total index, as well as every ship type except for tugs, was reduced by 0,2. The index number for tugs was reduced by 0,4. In the index without a fuel component, the total index, as well as large passenger boats, were reduced by 0,3. Ferries, small passenger boats, and other cargo ships were reduced by 0,2, while tugs were reduced by 0,5. The index for capital costs – financing was reduced by 3,5.
Accuracy and reliability
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Sources of error and uncertainty
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The measuring or errors must be seen in relation to the simplification that choice of vessels and group of costs represents.
The adaptation error is assumed to be small.
In case of partial defection or other errors the reporting company is contacted.
The sample for the calculation of costs for repair and maintenance is chosen from the industry subclass (SN2007 33.150 repair and maintenance of ships). The sample is chosen putting to cover the largest local kind-of-activity units where these are dominating. The variance is not calculated. The sample of local kind-of-activity units is rotated yearly by replacing units which become discontinued. A source to obliquity may be that larger units are over representative in the sample.
For errors in the samples of the different statistics used directly, the main reference is &“About the statistics´´ for these.
It concerns to:
- Crew costs - Labour cost index
- Fuel costs - Price index of first-hand domestic sales
- Administrative costs - Labour cost index
- Other costs - Consumer price index
- Capital costs (depreciation) - Consumer price index
- Capital costs (financing) - Norwegian Inter bank and Consumer price index
- 5.4. Other source of error
Changes may happen over time and the cost structure to enterprises in the sea transport industry. To weight the price changes correctly the weight basis should at any time reflect the cost picture of vessels in the industry. The weights should be evaluated with some years between.
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Revision
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Not relevant