Cost index for domestic sea transport

Weights, vessel groups, and cost groups

The cost distribution for the various vessel groups is based on the characteristics of a representative vessel and is derived from the surveys mentioned in section 3.2.

The statistics consist of the following vessel groups:

• Ferries
• Small passenger boats
• Large passenger boats
• Tugs
• Other cargo ships

Costs are divided into the following cost groups:

• Crew
• Repair and maintenance
• Fuel
• Administrative
• Other
• Capital costs - Depreciation
• Capital costs - Financing

From the 4th quarter of 2021, alternative fuels are included in the index.

• Natural gas (LNG)
• NO1 Electricity Southeast Norway
• NO2 Electricity Southwest Norway
• NO3 Electricity Central Norway
• NO4 Electricity Northern Norway
• NO5 Electricity Western Norway

Vessel groups

Ferries are vessels transporting cars and/or passengers within the domestic road network. Passenger boats are vessels transporting passengers domestically. These vessels are typically high-speed crafts providing transportation services in a specific area. Passenger boats are divided into small and large passenger boats. This is because the international code of safety for high-speed crafts has different rules for small passenger boats (shorter than 24 meters) compared to large passenger boats. Thus, the distribution of costs for small and larger vessels will differ. Cruise ships are defined as passenger vessels with the primary purpose of providing a tourist experience and sleeping accommodations. Cruise ships were removed from the cost index in 2016.

Tugs are vessels that do not directly transport goods or passengers but offer service in ports or along the coast. Other cargo ships are vessels transporting goods.

Cost groups

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 fuel costs are measured without taxes. From the 1st quarter of 2017 fuel costs include taxes on CO2 and sulfur emissions. Crew costs are all expenses related to sailors. From the 2nd quarter of 2017, crew costs include additional cost components, such as regular and irregular supplements to wages, overtime pay, bonuses, and holiday pay. Repair and maintenance costs are costs connected to the reparation and maintenance of vessels. Administrative costs encompass back-office expenses. The remaining operating costs are grouped into other costs.

Capital costs are costs incurred on the purchase of real capital goods. By having capital tied up in fixed assets, real capital, the costs can be divided into depreciation (Capital wear) and financing costs (interest costs). Depreciation is related to costs incurred due to wear or a decrease in the value of fixed assets. In accounting, this corresponds to amortization. Financing costs are the compensation resulting from the fact that capital is displayed. Liabilities are split into debt and equity capital. The cost index does not include the payment to equity capital and capital costs relating to financing has its accounting parallel to expenses for debt service.

Not relevant.

Cost index for domestic sea transport

Transport and tourism

Division for energy, environmental and transport statistics

Domestic

The statistic is quarterly and is published 90 days after the end of the quarter.

Not relevant

Microdata, information from the sample, and cost observation units are temporarily stored in the high-level language SAS program. For the long term, data is stored as text files.

The statistic describes the price development for input factors connected to domestic water transport. The published index consists of one aggregate index for the industry as a whole as well as five sub-indices for different vessel types. Gains in productivity and changes in profit margins are not taken into account.

The index was requested at an advisory group meeting for sea transport in 2008. In addition to its primary use, the index contributes to Statistics Norway's portfolio of economical statistics and is used within the agency as quality control for other similar statistics.

The development of the index started in 2008 and was financed by the Norwegian Public Road Administration and the Federation of Norwegian Coastal Shipping. Data collection and the first version of the index were first published in the second quarter of 2009.

The cost index is developed in cooperation with the Norwegian Public Road Administration as well as various maritime transportation companies represented through the Federation of Norwegian Coastal Shipping.

The costs of operating the index are financed by the Ministry of Transport.

The cost index is primarily used by private and public transport companies to regulate long-term contracts. It is also used by the National Accounts.

Statistics Norway uses the cost index as quality control for other statistics, for example, the Operating survey for vessels in water transport and Statistics Norway's structural business statistics.

The cost index for domestic sea transport is built on the same principles as the cost index for trucks and the cost index for buses.

Statistics Act §§ 2-1, 2-2 and 2-3

Not relevant.

The analyzed units are companies within domestic water transport.

Classification 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 not included in the sample.

3.2. Data sources

Crew costs are collected by the Division for Income and Wage Statistics and are part of the Index of labor costs. The sub-indices for ferries and large and small passenger boats are connected to the industry subclass 50.102. Cargo ships are connected to industry subclass 50.202. Tugs are connected to industry subclass 50.203.

Repair and maintenance costs are collected by questionnaire. Norwegian ship repair companies are asked to report hourly rates for services regarding boat reparation.

The questionnaire used for repair and maintenance is RA-0677 Agreed or contracted man-hour rate for repair and maintenance of vessels. The questionnaire is distributed after the end of each quarter with a one-month deadline.

Prices on fuel data are collected from the Division for Price Statistics. Fuel prices are collected from the largest fuel companies. The data is used in the production of the Price index of first-hand domestic sales.

Electricity prices are collected from NordPool. The prices are day-ahead values and are collected for all pricing areas available in Norway. The data does not include grid rent or public charges.

Natural gas prices are collected from ICE endex - Dutch TTF. The prices include CO2 taxes and a fixed surcharge of 14 euro/MWh. The surcharge represents transport costs.

Administration costs are measured by following the development for labor costs within industries within the industry subclass: professional, scientific, and technical activities.

Other operational costs are collected through the 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 uses the consumer price index excluding energy products (CPI-AE).

Capital cost in terms of depreciation is measured by the use of the Producer price index for investment goods. 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 rates are published by NoRe and are available here.

Controls of the price data are done by juxtaposition. The statistic producer confirms large deviations between periods for the internally generated price measures, and with the reporting enterprises for the data collected by the questionnaire for repair and maintenance.

Weights

The different vessel types have separate weights for their cost distribution. Between the 2nd quarter of 2009 and the 4th quarter of 2016, the weights were based on The Operating survey for short sea and domestic transport in 2006. The data was later supplemented with financial statements and historic costs from the Norwegian Public Road Administration and several municipalities.

The weights used between the 1st quarter of 2017 and the 4th quarter of 2021 were based on income statements and reports from the largest companies in the Norwegian domestic sea transport industry.

The weights used from the 1st quarter of 2022 are based on the same data as the previous weights from 2017. However, the weights have been adjusted to account for structural changes in the industry.

The weights used between the 2nd quarter of 2009 and the 4th quarter of 2016:

The weights for aggregating to a total index used between the 2nd quarter of 2009 and the 4th quarter of 2016:

The weight for the distribution of costs within the different types of vessels used between the 1st quarter of 2017 and the 4th quarter of 2021 was estimated using income statements and surveys of the largest Norwegian domestic sea transport companies. The data was used to estimate operational costs for a representative vessel in the group of vessels. The operational costs were supplemented with model-based capital costs. The capital cost was calculated through a model based on the prices of new vessels, lifetime, remaining value, and real interest rates. The depreciation was put forward by assuming linear amortization on prices for new vessels.

The weights used between the 1st quarter of 2017 and the 4th quarter of 2021:

From the 1st quarter of 2017 sub-indices for vessel types are also published without the fuel component. In practice, this means that the weight of all other cost groups increases.

The weights used between the 1st quarter of 2017 and the 4th quarter of 2021 for the cost index without fuel costs:

The weights for aggregating to a total index used between the 1st quarter of 2017 and the 4th quarter of 2021:

The weights used from the 1st quarter of 2022 are based on the same data as the previous weights from 2017. However, the weights have been adjusted to account for structural changes in the industry. For more information please contact us.

The current wights used in the cost index starting from the first quarter of 2022:

The current wights used in the cost index starting from the first quarter of 2022 for the cost index without fuel costs:

The Index calculation consists of several steps:

1. Determining weights

2. Collecting prices

3. Calculating elementary indices

4. Aggregation based on vessels, costs, or total index

The elementary indices are calculated as the geometrical averages 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 the Laspeyres method.

Notice that calculating the total index for a vessel type using published figures for periods before the 1st quarter of 2022 will not result in the same figures as published. This is due to the method used for chaining the index before the 4th quarter of 2021. This is not an issue for later periods.

Also note that the published figures for crew costs are an arithmetic average for passenger vessels, tugs, and cargo vessels. This partial index can therefore not be used in a manual calculation for the total index for a type of vessel. If you want to do this calculation manually, please contact us.

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.

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 the 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 the 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.

The calculation of the cost index was updated with new weights from and including the first quarter of 2022. The index changed the reference period to the fourth quarter of 2021. Old index values ​​have been revised and adapted to the new reference period. As of the first quarter of 2022, the index will be linked to the reference period instead of being linked to the previous quarter as has been done earlier. As of the first quarter of 2022, capital costs are measured by the nominal interest rate, not the real interest rate.

The measuring or errors must be seen in relation to the simplification that the 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 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 that become discontinued. A source of obliquity may be that larger units are overrepresented 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 Interbank and Consumer price index
• 5.4. Other sources of error

Changes may happen over time and the cost structure of enterprises in the sea transport industry. To weigh 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.