Introduction
The management in the company needs to know how long it will take to build up its fleet and start making money. The company aims to generate a profit within one year of its launch. The organization must first determine how much capital it will allocate to its fleet and what revenue it can expect.
The company must decide how many ships it wants in its fleet. The larger the fleet, the more ships will be used during mining. For instance, if the organization buys five ships, it must have its mining at once. However, if the company buys ten ships for its fleet, it can have five running and return later when finished. The corporation must decide how many vessels to purchase before making any purchases or taking action.
This report aims to prepare a convenient budget for the company before it purchases its fleet of ships to be used for mining the ore. The paper will outline the essential requirements and importance of the STCW convention for the company to achieve its aim. To establish a shipping division, the company should consider the budget required to purchase a small fleet of ships and the STW requirements that must be followed to achieve that goal.
Venture as a Chosen Vessel
The company is purchasing the ore vessels for the shipping division. The ore vessels can be purchased to mine iron ore in Venture. The vessel Venture has impressive abilities to be a great ship. The ship is designed as an entry-level mining ship because it provides a platform for beginner miners (Shigina et al., 2021).
Another advantage of purchasing the ship is that it is efficient, as it is not necessary for the miners to return to the station after a couple of minutes (Shigina et al., 2021). The ship has a stabilized warp core, making it easier for the ship to escape attackers. Besides, Venture is the only ship with gas cloud harvesting capabilities. It allows the ship to collect gas from interstellar clouds for combat booster and Tech III production.
Factors to Consider When Purchasing Venture and Their Importance
It runs on bunker fuel, which is less expensive than many other types of fuel. It is essential because it will lower their operating costs and increase their profitability. Additionally, Venture can transport up to 149,000 tons of iron ore in a single voyage, making it highly efficient (Honeybourne, 2022). This factor is essential because it enables ore ships to transport heavy cargo efficiently.
The operating cost of Venture is around $20,000 per day (Honeybourne, 2022). The ship’s operating costs will be lower if it runs on inexpensive fuel. As a result, it will enable the company to generate a profit from its business.
Venture can reach speeds of up to 20 knots and handle rough seas very well (Honeybourne, 2022). It makes it easier to transport iron ore to ports where it is shipped to countries like China. In addition, Venture can harvest ore at the speed necessary for mining in hostile space and gets out relatively unscathed. It is essential because it allows the company to transport iron ore while protecting the environment.
Another factor that should be considered is that Venture has Hull Upgrades. The factor grants a 5% bonus to armor hit points per skill level. It is essential because Venture has a low amount of armor. As a result, Venture will likely be targeted by the enemy fleet and may take damage (AlMuhaideb & Noynaert, 2021).
The upgrade allows it to tank longer and takes more damage before destruction. The trade-off for the armor upgrade is a loss of cargo space. At level 5, the upgrade provides only 15 tons of cargo space, compared to the 18 standard cargo spaces available at level 1. The factor is essential because Venture is obliged to carry passengers and various armaments.
Venture has Shield Rigging I, which reduces shield rig drawback by 10% per skill level. The factor is vital because Venture has large shields but a low shield recharge. Additionally, small and medium frigates with active engine control (ECM) modules have the same shield recharge time (24 seconds), so Venture will never have to spend time repairing its own ECM module.
Typical Costs Included in the Budget
Running a vessel like Venture, the company can allocate around $9,000 for daily insurance, as it is prone to accidents if not properly monitored. The other essential costs for this vessel are dockage fees, which amount to approximately $500 per day, and vessel expenses, which total around $450 per day (Islam et al., 2021). The details of typical costs should be considered, as they can help the company run its business effectively. If these costs were not documented, the company might overspend on these services and not profit due to the high operating costs.
Fixed Operation Costs
The typical costs included in a budget estimate of the fixed costs include the Vessel Operating Costs (VOC). It costs the vessel’s crew, management, and support staff, as well as food and wages (Humphreys, 2020). The next fixed operation cost is depreciation, which can be defined as the difference between the original value of the ship and its current value due to wear and tear.
Depreciation cost is reduced annually by a set percentage, for example, 10% (Humphreys, 2020). The amount that will be reduced will be specified in the purchase contract. If a company owns more than one similar ship, it can spread the fixed costs (such as depreciation) across all ships. The depreciation cost of every ship will reduce the per-unit cost for each ship.
Another fixed operating expense is insurance costs, which are the insurance that ships must have to protect their owners and cargo. By law, this cost is incorporated into the purchase price.
In addition, the other fixed operation cost is concessionary interest. The USA tax-deductible interest on a ship’s debt starts at 42% and reduces each year until it reaches 30%. It is needed to incentivize the shipowner to buy the ship (Yan et al., 2020).
Additionally, maintenance and repair costs are considered fixed operating costs. To run the vessel effectively, it is helpful for the shipowner to keep it in good condition (Yan et al., 2020). Sometimes, a ship needs more maintenance or repairs than other dry docks. Once the repair or maintenance has been done, the next work will cost less.
The next fixed operation cost is insurance costs. Its insurance ensures the safety of the vessel and its cargo – for example, against collision, fire, or piracy. The cost of this is included in the purchase price by law (De et al.,2019).
The last fixed operation cost is security costs. When shipping valuable goods (such as oil by sea), considerable security must be provided (Fraser, 2019). These costs include insurance protection against pilferage, theft, or robbery; fees to dock authorities and port police; and storage charges to customs agents. According to Fraser (2019), these expenses cover insurance for loss, theft, or robbery; fees for docking authorities; fees to port police; storage charges; fees to customs agents, among others.
Daily Operation Costs
Daily operating costs must be paid each day for a month or more extended periods. They include deck crew wages and salaries for this duration as required in the contract with the ship owner/operator, which can be estimated to be 5% of the daily operating costs (Wellmer & Drobe, 2019). The other daily operation cost is fuel and oil for the vessel’s duration to carry this cargo, estimated to be 1% of daily costs of operating.
Additionally, the next daily operational cost is the expense of cleaning, lighting, and heating during this period. It is part of the overhead cost (the fixed overhead) and so can be estimated to be 5% of daily operating costs (Wellmer & Drobe, 2019). The final daily operational cost comprises crew accommodation and related expenses for this duration, as specified in the contract with the shipowner, and medical aid and associated expenses for this period, as stipulated in the agreement with the shipowner.
Use of a Nautical Chart to Monitor Costs During the Management of the Vessel
To monitor all these factors, I would use a Nautical Chart. The chart shows that when the ship leaves the ports, it will follow a path to where it will mine for about five days. Once mined for those five days, it will return to the port. The ship would then head out again about a week after its cargo had been sold to other companies.
It is essential because this chart helps to track its costs more effectively and efficiently (Nosov et al., 2021). The company can quickly see if we are overspending on any one thing and make changes when necessary. It could prevent the company from overspending on any of the above factors and losing money.
The Key Requirements of the STCW Convention
The International Convention on Standards of Training, Certification, and Watch-keeping for Seafarers (STCW). The convention establishes a uniform framework of rules and duties, facilitating cooperation among individuals from different countries. The key requirements of the STCW Convention include that all seafarers have undergone approved training in a wide variety of areas (Heinonen, 2021). This is due to the maritime industry’s high professional standards and expectations for all seafarers.
The other requirement is that all seafarers be certified to the level required for their position. It is achieved by all seafarers undergoing regular training and assessments during their careers, including refresher training and periodic medical examinations (Heinonen, 2021). Certification of a crew is conducted by a single organization authorized by a Member State to certify seafarers in its jurisdiction. According to Chuah et al. (2022), certification ensures that it meets international standards for all seafarers on board ships flagged in that Member State, making it easier for them to work internationally, as they will meet sea-going requirements worldwide. It provides seafarers with freedom of employment worldwide, rather than just internationally within one nation’s flag-state system.
In addition, all seafarers must be safety-conscious and have sound knowledge of the importance of watch-keeping duties. It enables seafarers to ensure that everyone has undergone suitable training before boarding a ship and that the ship and crew are ready for any voyage (Dittmann et al., 2021). Furthermore, the STCW convention requires regular evaluation of the training and qualifications required for anyone working at sea. It is essential because seafarers are employed in a constantly changing field. A system of periodic checks and inspections must be in place to ensure seafarers continue to meet the high standards expected from them (Dittmann et al., 2021).
Lastly, the STCW Convention requires all seafarers to undergo regular medical examinations and assessments as part of their working life. Saguaro et al. (2021) established that this requirement helps prevent deterioration in their health or competency while working at sea. It is essential because a seafarer’s working environment is so dangerous that even the slightest problem could result in catastrophic consequences for the crew, ship, and cargo.
The Importance of the STCW Convention
The STCW Convention is an internationally agreed-upon minimum standard for the competency and training of seafarers. The importance of the STCW Convention to seafarers is that it ensures that they receive adequate training for their chosen career at sea and are kept up-to-date with necessary medical checks to ensure their fitness for this demanding job (Manuel & Baumler, 2020). According to Gundić et al. (2020), seafarers worldwide can work internationally, making it easier for them to find a job as they meet the international requirements of competency and training established by the Convention.
As a result, it is vital to the smooth operation of the industry that seafarers are competent and trained, meeting updated safety standards (Manuel & Baumler, 2020). It sets out the minimum requirements for training institutions and onboard training, ensuring seafarers receive adequate training (Gundić et al., 2020). It also sets standards for individual competencies such as medical fitness, safe use of ships’ equipment, and survival techniques.
Effectiveness of the STCW Convention in Achieving Its Aims
The original purpose of the STCW Convention was to protect seafarers. The STCW Convention achieved its aim by effectively controlling the number of people to a number that the ship’s crew could effectively supervise. To achieve this, the STCW Convention sets minimum age requirements for all seafarers and provides for training, certification, and experience (Vujičić et al., 2020). Vujičić et al. (2020) asserted that its aim is achieved by providing safety measures, safety equipment, and procedures, and more thorough supervision by a ship’s officers and crew regarding hygiene, living conditions, and medical facilities on board ships.
Conclusion
In conclusion, as an ore mining ship, Venture offers several cost-effective bonuses to the company, including lower sales costs, reduced maintenance expenses, and potential future income. Venture helps the company to store profits to be spent on other mining operations or necessary upgrades. It allows us to eliminate the direct expense of maintaining lookouts, minesweepers, and surveillance while the ship is docked at port. The key benefits are that it will help eliminate the costs of lookouts, minesweepers, and surveillance while docked at port.
Additionally, utilizing this approach can further increase the profit margin of this business if implemented correctly by conducting a thorough risk analysis, devising a feasible plan to manage each risk, and then executing that plan. These seem like useful features for any business to want, such as a mining ship. However, they make this vessel as attractive as you could imagine, considering it is still in its early stages of development.
In addition, the importance of the STCW convention in the maritime industry ensures that all seafarers are competent enough to sail on any ship they want. It ensures they pass the medical test every year and are quickly employed if they meet the requirements. The purpose of International Conventions and Agreements is to establish a standard set of rules and responsibilities that facilitate collaboration among people from different countries. However, the purpose of the STCW Convention is to establish uniform minimum standards for seafarers’ training, certification, and watch-keeping.
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