Economics of Ship Engines

For a long time I was puzzled as to why ships were scrapped. These gigantic steel structures, some of them barely 20 years old, sent to the breakers yard to be reduced to so much scrap metal. How can that make any sense? But then I got the idea that we have gotten very good at building structures, it's all the equipment and finish work that goes into a project (after the basic structure is complete) that costs all the money. For instance: framing a house looks like the biggest part of building a house, but it is actually one of cheapest line items in the building contract. So I figured somehow the same principle must apply to ships.

Recently I was watching a TV show about the Liberty ships used in WWII. One item stood out in that story: if a ship managed a single successful crossing, it had paid for itself in the worth of the material delivered. Nowadays everything gets shipped in containers, shiploads of containers. We have problems with empty containers piling up in the US at our West Coast ports. Containers are so commonplace, we don't really think too much about what goes into them, but you can easily pack a hundred thousand dollars worth of merchandise in a container (figure 2,000 cubic feet times $100 per cubic foot).

A while back I came across some pictures on the web of "the worlds largest engine", a mammoth diesel engine used for powering cargo ships. I recently came across this set of pictures again. There was a brief description accompanying the pictures and there was one line in there that caught my eye. Something to the effect that the cost of the engine was as much, or more, than the cost of the rest of the ship. Aha! Now a little light goes on in my brain.

They run these ships until the engines wear out, and then they scrap them. If you are charged with delivering tens of millions of dollars of merchandise, you do want to be delayed because of engine problems. You buy a new boat with a new engine. You do not try to save money by using a rebuilt engine, you cannot afford an engine failure, and you don't want your boat tied up in a repair yard for weeks while the engine is overhauled. That boat is money, and having it sit costs you. So you scrap it, and buy a new one and stay in business. If someone else wants to fool with old, worn out equipment, they are welcome to do so.

One of the claims made for this monster engine is that it is much more efficient than a typical automobile engine. Just for grins I looked around a bit and found a GE turbine engine could be used for ship propulsion as well. I did up a little spreadsheet to compare the cost of operation for various engines based on their "thermal efficiency". I made some estimates as to how much power your ship would require, how many hours a year that ship's engine would operate, and the price of fuel. Ships want to be underway. Minimizing turn around time in port is of utmost importance. I estimated a week in port for every week in transit. If you have an efficient operation in port, it may be less than that. As for fuel: ships run on crude oil. I imagine it is cheaper than gasoline, if you are buying in bulk, I imagine you get a discount, and there are no highway taxes, so I figured a dollar a gallon. It may be more. I also figured you are going to have a big ship and you are going to need 50,000 horsepower to get it across the ocean. Your ship might get by with half that.

So you multiply or divide by factors of two as it suits you, but it does not really matter. Based on my estimates, you will note that the difference in the cost of fuel for these size power plants amounts to tens of millions of dollars a year, which is a heck of a lot of money, even if you divide it by 2, 4 or even 8.

Here's the pictures. The first six are "the world's largest". The last two are a different engine.

DU-Sulzer 12RT A96C

I got to thinking about these pictures, and I realized they don't really tell much of the story at all. The real story would be about how they make that engine. Can you imagine what would go into casting the bottom crankcase? How much molten steel they would need? Just constructing the mold would be major undertaking. A tour of the plant where this engine is made, now that would be worth seeing!

Update January 2017 replaced missing images, removed dead links.