One way to compare operating efficiency is to compare different companies’ operating expenses per vessel, which are calculated by dividing vessel operating expenses by the number of vessels. In this way, we can compare companies with different fleet sizes.
Peer comparison analysis
As we can see in the chart, Diana Shipping has a relatively high ratio of vessel operating expenses per vessel compared to Safe Bulker (SB) and Navios Maritime Partners L.P. (NMM), which doesn’t look good to investors.
Over the last two years, the number of vessels owned by Diana Shipping has ranged from 28 to 36. In contrast, both Safe Bulker and Navios Maritime range between 18 and 28 vessels. Owning more vessels can’t decrease the average operating expenses per vessel, so there are no economies of scale here. When fleet size increases, so do vessel operating expenses. Maybe the marginal vessel operating expenses are rising as the number of vessels increases.
However, Diana Shipping can have lower vessel operating expenses in the next a few periods as its new ships are delivered, because new ships incur fewer crew and maintenance expenses.