Estimating

How to do a voyage estimate, step by step

Published 18 October 2026

A voyage estimate answers one question before a ship is fixed: what will this voyage earn per day? You take the freight, subtract what the voyage costs, and divide by the number of days it takes. The result is the time charter equivalent, or TCE. The arithmetic is short. The work is in getting each input right, so this guide goes through the inputs in the order a desk fills them in, then shows how to run the same sum backwards when you already know the daily rate you want.

Step 1: the cargo and how much the ship can lift

Freight is earned on the cargo loaded, not on the ship's size. Start from the quantity in the enquiry and check that the ship can carry it. Two limits apply. The first is weight: deadweight less bunkers, fresh water, stores and the ship's constant. The second is volume: the hold capacity divided by the cargo's stowage factor (the space one tonne of the cargo needs). A draft limit at either port can cut the weight further. The lower figure is the intake. See what a ship can actually lift for the detail.

Step 2: distances and speed

An estimate has two sea legs. The ballast leg is the ship sailing empty from where it is now to the load port. The laden leg is the loaded voyage from the load port to the discharge port. Take each distance from a sea distance table and divide by the speed:

Days at sea = distance in nautical miles / (speed in knots x 24)

Many desks add a sea margin, a percentage on top of the sea days for weather and current. Five per cent is common on long ocean legs. Leave it out on a short coastal leg, or the estimate adds days that will not happen.

Step 3: time in port

Port time is the least certain input. Work it out from the cargo and the loading or discharging rate in the enquiry: 50,000 tonnes at 10,000 tonnes a day is five days. Then add what the rate leaves out: turn time before laytime starts, Sundays and holidays if the terms exclude them, and waiting for a berth. A port that is often congested needs waiting days in the estimate, not a hope that the ship will berth on arrival.

Step 4: bunkers

Fuel is usually the largest voyage cost. Multiply each part of the voyage by what the ship burns doing it: so many tonnes a day laden, so many in ballast, a smaller figure in port for the generators and cargo gear. Price each fuel grade separately. A ship that crosses an emission control area burns the cleaner, dearer grade for that part of the voyage, and one average price for the whole voyage hides that.

Step 5: port costs and other costs

Port costs are the port disbursement account at each end: dues, pilots, tugs, mooring, agency. Ask the agent for a proforma, because old accounts go out of date quickly. Add canal tolls if the route has a canal, and any other cost of this voyage: extra insurance, cleaning, a survey. Keep every line in the sheet even at zero, so a missing cost shows as a zero and not as nothing.

Step 6: freight and commissions

Gross freight is the quantity times the rate per tonne, or a lumpsum. From it come the commissions: address commission to the charterer and brokerage to the brokers. What is left is the net freight. An estimate run on gross freight is too high by the whole commission.

Step 7: the result and the TCE

Net freight less the voyage costs is the voyage result. Divide it by the total days, at sea and in port, and you have the TCE. Running costs (crew, insurance, maintenance) are not part of it. They are the same whichever cargo the ship takes, so they do not help you choose between cargoes.

A worked example

The figures below are illustrative. They are round numbers chosen to make the sums easy to follow, not a quote for any route.

Supramax, 50,000 mt of grain. Illustrative figures only.

Days
  Ballast    2,400 nm at 12 knots                   8.33
  Laden      4,800 nm at 12 knots                  16.67
  Loading    50,000 mt at 10,000 mt a day           5.00
  Discharge  50,000 mt at 8,000 mt a day            6.25
  Waiting                                           1.75
                                                   -----
  Total                                            38.00

Freight
  Gross      50,000 mt x 25.00 per mt          1,250,000
  Less commission, 5.00% in all                  -62,500
  Net freight                                  1,187,500

Costs
  Bunkers    25 days at sea x 25 mt = 625 mt
             13 days in port x 3 mt =  39 mt
             664 mt x 550 per mt                -365,200
  Port costs, load and discharge                -155,000
  Other costs                                    -15,000
  Voyage costs                                  -535,200

Voyage result                                    652,300
TCE = 652,300 / 38.00 days =                      17,166 a day

Step 8: check what moves the answer

Change one input at a time and see what happens to the TCE. Two extra waiting days add two days of port fuel and divide the result by 40 days instead of 38. A bunker price 50 dollars higher costs 33,200 on this voyage. A freight rate one dollar better adds 47,500 of net freight. The inputs that move the answer most are the ones to negotiate hardest, and the ones to question when somebody else gives them to you.

Step 9: the sum run backwards

Often the question is the other way round. An owner says "if I give the ship for 15,000 a day, what freight is that?" You know the daily rate and need the freight. The days and the costs do not depend on the freight, so the sum turns round cleanly:

Net freight needed = target TCE x voyage days + voyage costs
Gross freight      = net freight / (1 - commission)
Freight per tonne  = gross freight / quantity

Target 15,000 a day on the voyage above:
  15,000 x 38.00 days                            570,000
  Plus voyage costs                              535,200
  Net freight needed                           1,105,200
  Gross, before 5.00% commission               1,163,368
  Per tonne, on 50,000 mt                          23.27

So 23.27 a tonne earns 15,000 a day on this voyage. Rounded to the cent, the freight earns a few dollars a day more than the target, which is why a solved estimate often shows 15,003 and not exactly 15,000.

If you want to compare several daily rates, run the same sum for each one. Every 1,000 a day on this voyage is 38,000 of net freight, or about 0.80 a tonne gross. That number is useful in a negotiation: it tells you what a counter of one dollar a tonne is worth per day.

When a hire is on the sheet

If you have the ship on time charter yourself and are chartering it out again for this voyage, the hire you pay is one more cost, charged on every day of the voyage. The daily figure then means something different: it is the margin left over the hire, not what the ship earns. That case has its own guide, relet and the margin over hire.

What an estimate is for

An estimate will not be exactly right. Ports work at different rates, weather slows the ship, and fuel prices move. Its job is to put two cargoes, or a cargo and a hire offer, into the same unit so you can choose, and to write down the assumptions you chose on. Keep the sheet. When the voyage is done, compare it with what happened. That comparison is how a desk's next estimate gets better.

The TCE calculator runs steps 6 and 7 on figures you type in, and the sea distance calculator gives the miles for step 2.

References

• HANDYBULK, Voyage estimating in shipping: cargo intake, bunker costs, voyage expenses and TCE calculations. handybulk.com
• Veson Nautical, VMS: Estimate (Voyage), on the parts of an estimate and TCE as revenue less expense over voyage days. help.veson.com

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