Tanker rates. More information. Read:
TCE stands for Time Charter Equivalent, and is a revenue measure in US$/day. To understand the terminology, recognize that charterers can utilize a vessel in three different ways:
Voyage charter -- Use of vessel for one trip, say loading cargo in the AG and delivering in Singapore. (You can also have consecutive voyage charters and contracts of affreightment [COAs] for multiple voyages.) Here the charterer pays a specific US$/MT rate, or lump sum amount, for the voyage, and the owner is responsible for all expenses.
Time Charter -- Charterer utilizes a vessel for a set period of time, from 30 days to 7 years, paying a set time charter rate, expressed in US$/day. The charterer also pays for all voyage expenses, such as bunkers (fuel), port charges, canal fees and commissions. The owner pays for the operating expenses of the vessel, as well as the financing costs of the vessel.
Bareboat Charter (sometimes "Demise Charter") -- Here the charterer, called the beneficial owner, pays for the operation of the vessel and is responsible for manning, maintaining Flag and Class, insurance and employment of the vessel. The desponent, or true owner is responsible for financing costs only. Equivalent to a lease in some sense.
So when you see TCE on the boards, it reflects the calculation to take the revenues from a spot voyage charter and convert it to a time charter basis. That is, you take the voyage revenues (US$/MT rate x MT loaded), less voyage expenses of bunkers, port fees and commissions, and divide by the round-trip voyage days. You might also see bareboat charters converted this way by adding back operating costs per day.
Bunkers are the fuel for the massive diesel engines that power these vessels, and the name has lingered, nostalgically from the days when coal was stored in bunkers to fuel the vessels of that era. The bunkers are usually high-viscosity heavy fuel oil (380 cST is the normal viscosity), but a vessel will also burn marine diesel oil (MDO) in port for pollution control and better responsiveness / manoeuvrability on the engine. A VLCC's engine might be 35,000 bhp and will burn 90 MT/day at 15 knots laden. A Suezmax might have a 20,000 bhp engine and will burn 60 MT/day at 15 kts laden.
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