Cost & Pricing Analysis
In today’s global economy, companies rely on quantitative measures to assess their competitive position. Benchmarking is a structured methodology to provide companies with data on best practices.
Maritime Management Consulting identifies metrics that are key to the client’s business processes; we conduct data searches to quantify industry norms; and we perform internal audits to gage the client’s performance. We also apply parametric models and benchmarks to develop budgetary prices for new product development.
Our Benchmarking experience includes:
- Cost and schedule studies
- Operating budget analyses
- Organizational design and structure
- Unit rate analyses
Client Work and Other Experience
- Asian Shipyard Review: MMC was retained by the largest accounting firm in Indonesia to provide shipbuilding and ship repair expertise as part of a team conducting a government-sponsored review of Indonesia's largest shipyard. Work included a complete cost breakdown structure for both ship repair and new construction, analysis of existing shipyard financial and performance data, analysis of competitive positioning, market sizing for various vessel types, and general advice and counsel to the team of accountants during the audit. The work led to a number of recommendations for change, some of which are being successfully implemented today.
- Containership Construction: For a containership operator, MMC performed parametric cost estimates for a baseline design and three alternative designs using a computer-based model and benchmarking data. Price sensitivity was performed for the baseline ship, varying labor rates and productivity through a series of pairs. A presentation was provided to senior client managers, including key findings and an analysis of likely competitors for this project.
- Suezmax Tanker Construction: MMC prepared parametric cost estimates for a proposed Suezmax tanker design, alternative tank arrangements and a forebody replacement. Alternative single shaft and twin-screw engine room configurations were also assessed. Price sensitivity to labor rates and productivity was examined.
- FPSO Construction: Based on a preliminary design and specification, MMC estimated the cost of design and construction for a very large spread-moored FPSO barge hull and accommodations module. Price sensitivity was analyzed for exchange rates, labor rates and productivity. Costs were compared to a VLCC, with explanations in the difference in work scope by specific cost element. Design, construction, testing, and master project schedules were developed based on best practices in the Far East. Suggestions were provided to improve producibility.
- Multi-Function Barge Construction: Using a conceptual design for a combined FPSO and drilling platform, MMC prepared a parametric cost estimate for a very large spread-moored barge hull and accommodations module. Price sensitivity was analyzed for exchange rates, labor rates and productivity. Schedules were developed based on best practices in the Far East.
- Ship Valuation: On several different instances, MMC analyzed the price of cruise ships for existing cruise ship owners and operators. These prices were used in negotiations for the purchase and sale of cruise ships.
- LNG Tanker Construction: MMC estimated the cost of design and construction for a series of large LNG carriers and barges applying new containment technology. These estimates applied conceptual designs prepared for the owner. Build strategies, master schedules and risk analyses were developed to support the cost estimates, applying best practices in Asian shipyards. Unique challenges for this project were analyzed in depth. Design and manufacturing suggestions were provided to improve producibility. Price sensitivity was provided for labor rates, productivity and exchange rates, and comparisons were made to historic LNG carrier prices and other ship types of similar size.
- Drilling Rig Value: Working for a potential lender for a new construction project, MMC established the future value of a new drilling platform design at the end of the initial drilling lease. Research identified historical values for rigs based on age. These values were adjusted for rig performance features, location, and initial price. Demand trends for this specific rig type were identified, and areas of possible future employment were discussed. MMC also reviewed possible building sites as part of due diligence for the lender.
- Port Services: For a major cruise port, MMC projected the services that would be required by the major cruise operators calling at the port. The analysis included a discussion of the ability of these cruise companies to afford the services.
- Rate Analysis for Public Service: On behalf of the San Francisco Bay Pilots, MMC prepared an analysis of pilot rate schedules in San Francisco and other US ports, including a study of work content and required pilot skills. MMC testified as to its findings before the public governing committee.
- Cruise Ship Operating Profile: For a major cruise ship operator, MMC reviewed the operating costs and compared them with industry-wide standards. The cruise company was then able to focus on budget areas that were out of line in order to cut costs.
Operating Budgets: For a large cruise ship operator, MMC assessed the on-board operating budgets for the fleet of ships. Using industry standards, budgets were adjusted to reduce costs by $5 million in the first year.