Overview
Build the comparison so another reviewer can explain why the options differ. The point is to expose the trade-off, not to compress unlike opportunities into a misleading league table.
Key takeaways
- Align the vessel's starting position and the end of each employment.
- Apply a consistent expense policy while allowing genuine operational differences.
- Show absolute contribution beside daily earnings and uncertainty.
- Preserve any unresolved information that could reverse the comparison.
Decide whose economics are being compared
An owner considering alternative employments and a charterer evaluating transport costs are not necessarily measuring the same outcome. State the perspective at the beginning of the worksheet. Also identify whether the decision concerns a single voyage, a sequence of employments or a longer planning period.
For a daily voyage-earnings comparison, revenue less the defined voyage expenses is divided by the corresponding duration. The Baltic Exchange benchmark documentation describes this type of time-charter-equivalent calculation. The actual decision still needs an explicit model boundary and expense policy.
Do not describe a limited contribution measure as the owner's complete profit. If ownership, financing or other expenses are excluded, say so. A clear label prevents the comparison from implying more than its inputs support.
Use a common starting point
Start with the vessel's expected open position and date. Identify the movement required to reach each proposed loading area and explain whether that movement sits inside the comparison. Omitting positioning from one alternative while including it in another changes the question being answered.
An option may legitimately involve more ballast time or a different operational sequence. The goal is not to force identical itineraries. It is to use the same rule for identifying which activities belong to each itinerary.
Likewise, state the end point. A calculation ending at discharge and another ending after repositioning describe different scopes. If the analyst includes a follow-on positioning assumption, show why it is relevant and test it separately from confirmed employment.
Reconcile the commercial scope
Check cargo quantity, port options, contractual expense allocations and the status of the freight indication. A firm response for a narrower transport task should not be compared unqualified with an exploratory indication for a broader one.
List differences before deciding how to model them. Some can be normalised with verified inputs. Others require clarification from the negotiating parties. An unknown charge should remain an open item rather than being assigned a convenient value to complete the table.
Use the latest relevant version of each proposal. A comparison can look internally consistent while combining the cargo quantity from an earlier enquiry with a later rate and an obsolete port estimate.
Work through an illustrative ranking reversal
ILLUSTRATIVE — invented teaching inputs, computed by script. Both cases use the same defined expense policy and include all time assumed within their respective employment boundaries.
| Input or result | Voyage A | Voyage B |
|---|---|---|
| Gross revenue, USD | 800,000 | 930,000 |
| Included voyage costs, USD | 300,000 | 350,000 |
| Contribution = revenue − costs, USD | 500,000 | 580,000 |
| Duration, days | 25 | 32 |
| Daily contribution = contribution ÷ days, USD | 20,000 | 18,125 |
A: (800,000 − 300,000) ÷ 25 = 20,000 USD per day. B: (930,000 − 350,000) ÷ 32 = 18,125 USD per day. These are hypothetical figures, not live rates or vessel earnings.
The example demonstrates why total contribution and daily contribution answer different questions. It does not establish that one employment should be accepted. Timing, confidence in the inputs, contractual conditions and the wider planning context remain relevant.
Show uncertainty beside the ranking
Identify the assumptions most capable of changing the result. An uncertain waiting period may matter more than a small difference in a well-supported expense. Conversely, an unresolved cargo option can change both revenue and the itinerary.
Present a base case and a small set of purposeful alternatives. Explain which assumptions change together and which are held constant. A delay scenario should not automatically add an unrelated freight improvement merely to preserve the preferred ranking.
Do not invent probabilities. If the available evidence supports only a range of possible outcomes, show that range and identify the information needed to narrow it. Conditional comparisons can still support a useful decision.
Use a comparison audit matrix
| Review item | Fair comparison question | Evidence or action |
|---|---|---|
| Starting position | Does each option begin from the same commercial point? | Reconcile the opening basis |
| Employment scope | Are port and cargo alternatives explicit? | Confirm proposal versions |
| Expenses | Is the same inclusion policy applied? | Explain actual differences and exclusions |
| Time | Are positioning and port activities treated consistently? | Retain the itinerary basis |
| Revenue status | Are assumptions, indications and agreed terms distinguishable? | Link the source communication |
| Uncertainty | Could an open issue reverse the conclusion? | Assign a confirmation owner |
The matrix should be completed before the approval note presents a ranking. Otherwise, a later correction may reveal that the apparently preferred option was favoured by the modelling convention.
Avoid creating a fictional next employment
Analysts sometimes add a speculative next cargo to an option that finishes earlier. That may be relevant to a wider strategy discussion, but it should not quietly become confirmed revenue in a single-voyage comparison.
Keep the immediate employment result separate from the follow-on scenario. Describe the assumed opening position, opportunity and timing. If the opportunity is not confirmed, retain that status throughout the analysis.
This separation also helps avoid double counting. A daily earnings comparison already reflects the time used by the current employment. Adding an unexplained daily opportunity charge can mix economic boundaries and make the calculation harder to interpret.
Write an approval note that explains the choice
- Identify the alternatives and the commercial perspective.
- State the common calculation conventions.
- Present total and daily results with their limitations.
- Highlight the material differences that were not normalised.
- Show the sensitivity most relevant to the decision.
- Record the remaining confirmation and authorised next step.
The note should permit a conditional conclusion. A reviewer can prefer an option subject to a clearly named confirmation without pretending that every assumption is settled. Preserve the approved version so later changes can be assessed against the actual decision basis.
Common mistakes
Avoid ranking gross freight alone, mixing calculation boundaries or treating preliminary indications as executable offers. Do not quietly replace missing expenses with zero. Do not equate a more precise spreadsheet output with a more reliable assumption.
Another error is reporting only the preferred option. Retain the alternatives and the reasons they were not selected. That record makes reassessment easier if a material condition changes before the employment is concluded.
Where Zeaclub fits
Zeaclub provides a multi-party shared workspace for owners, charterers, brokers and port agents.
Zeaclub offers digitalised procedures across the voyage workflow.
Explore Zeaclub
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
Does the higher daily result always decide the fixture?
No. It answers a defined economic comparison. The parties must also consider the actual terms, uncertainty, operating requirements and authorised commercial objectives.
Can different voyage durations be compared?
Yes, provided the duration boundaries and expense conventions are consistent. Show absolute contribution as well as the daily measure so the distinction remains visible.
What should happen to an unknown cost?
Identify it as unresolved, obtain the appropriate estimate and test its potential effect. Do not silently assume it is absent.
Should a possible next cargo be included?
Only in a separately identified scenario with a clear basis. An unconfirmed future opportunity should not become certain revenue inside the current voyage result.