IMOS - Benchmark Estimate Exposure Calculations

Cargo contracts are often marked to Benchmark estimates as a way of calculating exposure. Given there is no vessel attached to a cargo contract, a benchmark estimate provides a useful tool to give a picture of any voyage associated with the cargo in question, as well as helping to fill out an expected total P&L from undertaking a contract.

At times, values on a benchmark estimate may differ from values on the trade details list. This will most likely be for one of the following reasons:

Freight rate
Bunker values
CP quantity
Commission percentage
Lifting options
Pricing matrix (Benchmark estimates for use of exposure do not fully support pricing tables)
Is the initial estimate the same as the benchmark estimate?

Given we are contractually obligated to the cargo contract, the trade details list will apply values from the cargo contract, superseding values in any benchmark estimate. For example, a cargo contract might have bunker prices at $200/MT, while the estimate has bunkers set at $400/MT. In this instance, bunker expenses will, in turn, use the cost of $200/MT giving us a different total bunker cost, in turn giving us a different total expense, which ultimately gives us a different TCE

In these instances, the first and most often times easiest solution is to create a new estimate linking the cargo in question. After completing the estimate with applicable port expenses, misc. expenses, etc… the end value should reflect what is seen on the Trade details list.

At other times, this can still prove difficult. In these situations, an excel document to manually calculate values is often the next easiest step. The following excel has available plug and play values, simply enter in details provided through the actual contract such as CP quantity, Freight rate, bunker values, etc.. and your TCE should auto calculate.

TCE = (Total revenue - Total expense)/Voyage days