Overview
The model should support a commercial discussion about the option while preserving the distinction between assumed expense, owner-quoted freight, and internal customer allocation.
Key takeaways
- Define the base sequence and the actual optional-call branch.
- Obtain incremental inputs rather than allocate by call count.
- Separate fuel price stress from changed employment quantity.
- Keep arithmetic distinct from contractual adjustment and customer margins.
Define the optional delivery precisely
Identify the product parcel, receiver, facility, and timing request associated with the option. State whether the customer has confirmed its purchase or whether the branch remains a sales possibility.
Then describe the base programme that would proceed without the option. The comparison should use the same start and finish boundaries so that the difference represents the employment being considered.
Ask the owner or authorised qualified source for relevant quantity assumptions. The commercial analyst should not infer the additional fuel requirement from distance alone, from the number of calls, or from a generic MR category figure.
If the option changes other deliveries, include that relationship in the request for inputs. An additional call may be part of a revised sequence rather than an isolated segment that can simply be added to an unchanged base model.
Separate model inputs from commercial prices
The fuel model values assumed quantities at a stated price basis. The owner's freight response prices a commercial package. The distributor's customer allocation is another analysis again. Keep all three visible but distinct.
For each fuel input, record whether it is a qualified voyage estimate, a planning assumption, or a fictional illustration. The source and status should remain attached when the result is copied into an approval note.
For price, identify the product, currency, and relevant basis for the actual analysis. A stress scenario need not claim to predict the market, but it must be labelled as a conditional assumption rather than a current quotation.
Do not substitute a different fuel basis merely because it lowers the model. Qualified parties should determine whether the input is appropriate to the intended vessel and scope; the analyst checks the commercial consistency and arithmetic.
Calculate a distinct optional-call example
The following example is entirely fictional. The quantities are not MR performance data, the prices are not market quotations, and the optional-call quantity is not an operational recommendation.
ILLUSTRATIVE: fictional optional-delivery fuel comparison
Assume a base programme uses a modelled 150 tonnes of fuel at USD 640 per tonne, giving USD 96,000. A separately assessed fictional option adds 18 tonnes, so the revised quantity is 168 tonnes and expense at the same price is USD 107,520.
The option's quantity effect is USD 11,520. If the price for the revised programme is stressed to USD 700 per tonne, expense becomes USD 117,600. The price effect on that revised quantity is USD 10,080, and the combined difference from the base is USD 21,600.
| Fictional case | Quantity | Price per tonne | Expense |
|---|---|---|---|
| Confirmed programme | 150 tonnes | USD 640 | USD 96,000 |
| Optional delivery added | 168 tonnes | USD 640 | USD 107,520 |
| Optional delivery with price stress | 168 tonnes | USD 700 | USD 117,600 |
The calculation isolates the option's assumed quantity effect and the separate price effect. It does not allocate the base expense among customers or establish what the owner should charge for the option.
Avoid call-count allocation as an incremental estimate
A simple division of total expense among calls can be an internal allocation convention if the organisation deliberately adopts it for a defined purpose. It is not evidence that each call contributes equally to the voyage's fuel requirement.
The incremental question is different: what changes between the base employment and the option branch? That requires relevant input for the actual comparison, not an equal share of the original total.
If the distributor uses an allocation method for customer margins, label it separately. The sales team should understand whether it is reviewing an assigned share of total transport expense or the additional expense attributed to a new delivery scenario.
Keeping those concepts distinct prevents an optional customer from appearing profitable or unprofitable solely because the denominator or allocation rule changed. The cargo decision needs the actual commercial package as well as any internal costing convention.
Connect sensitivity to the customer's decision timetable
Identify when the optional customer will confirm and when the owner needs a decision. A well-calculated scenario has limited value if the branch cannot be exercised within the actual commercial timetable.
Ask whether the option requires additional receiver or product review. Those decisions can determine whether the alternative is usable, and they should not be converted into guessed cost allowances merely to complete a spreadsheet.
If the customer withdraws, confirm the retained base programme and the relevant freight treatment. Removing the option does not automatically establish a proportional reduction in every quoted amount.
Check the current text of the applicable agreement and option terms through the responsible contracting team. The fuel model informs questions; it does not determine payment rights or obligations.
Maintain a reproducible decision record
Save the base and option inputs, price basis, formulas, and result version. Identify who supplied the quantity assumption and who authorised its use in the commercial paper.
When the delivery sequence changes, ask whether the earlier incremental input remains relevant. Do not keep adding isolated call allowances to a model whose overall itinerary has changed materially.
The recommendation should state what the sensitivity changes about the decision. It may justify further owner clarification, a revised customer offer, or rejection of an unworkable option. A number without that connection adds little value.
After the voyage, review whether the model was used within its intended boundary. If colleagues treated an allocated share as an actual incremental charge, improve the labels and handover before adding more complexity.
Common mistakes
Dividing total fuel expense by call count does not establish the cost of an optional delivery. Another mistake is combining a new call assumption with an otherwise obsolete sequence model.
Avoid presenting fictional or generic quantities as MR performance data. Real analysis needs relevant qualified inputs.
Do not equate modelled fuel expense with the owner's option price. Preserve the actual commercial response and review the terms separately.
Where Zeaclub fits
Zeaclub offers digitalised procedures across the voyage workflow.
Zeaclub provides 24/7 operating systems and worldwide coverage.
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Educational information only; not legal, financial or trading advice. Contract wording and applicable rules control. Verify current requirements and obtain qualified advice before acting.
Frequently asked questions
Can fuel expense be allocated equally among customers?
An organisation may use that as an explicitly approved internal convention for a defined purpose. It should not be presented as evidence of each customer's incremental voyage expense or the owner's pricing basis.
What input is needed for an optional-call sensitivity?
Obtain a relevant base and revised-employment quantity basis from the owner or authorised qualified source. The comparison must describe the actual sequence being considered.
Does removing a customer reverse the modelled increment automatically?
The analytical scenario may be reversible under its assumptions, but real commercial treatment depends on the current programme and agreement. Obtain the relevant owner response rather than assume a payment adjustment.
What should the sales team see in the result?
Show the modelled expense change, owner-quoted option scope, and any internal allocation separately. This lets the team evaluate the customer without confusing different kinds of cost information.