Ship propulsion: Unit economics
How a fuel shock in Hormuz hit every container box
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.Fuel is close to half of a ship's operating cost, so the 2026 bunker price spike (VLSFO up 74%) fed straight into freight costs. Newer, bigger ships burn less than half as much fuel per container as old ones.
Key costs
| Measure | Value | Note |
|---|---|---|
| Very-low-sulphur fuel oil (VLSFO) price | 518 (February 2026); 901 (March-May 2026 average) USD per tonne10 | Rise of 74% after Strait of Hormuz disruption. |
| Fuel use per container | about 0.014 (ships up to 5 years old); about 0.033 (ships over 20 years) tonnes per TEU per day10 | TEU = twenty-foot equivalent container. |
| Fuel cost per TEU, 21-day China to US West Coast voyage | 155 to 269 (newest ships); 360 to 626 (oldest) USD per TEU, before and after the 2026 price shock10 | Largest post-Panamax ships 98 to 171; feeders 365 to 635. |
| Freight rate (Drewry World Container Index) | about 1,930 USD per 40-foot container (February 2026)10 | The fuel increase alone was 12-28% of this rate. |
| Fuel share of operating cost | 45-50% (46% Panamax, 50% 10,000 TEU ship)% of annual operating cost, excluding capital11 | Drewry data as reported in Rodrigue, The Geography of Transport Systems; data year not stated. |
| Naval reactor core life | life of the ship without refuelling: 33 years (Virginia class), over 40 years (Columbia class); current cores last over 1 million miles 8 | Nuclear avoids fuel cost entirely but at very high capital cost. |
Where the money goes
| Item | Share or amount |
|---|---|
| Fuel (bunkers) | 45-50% of operating cost11 |
| Port charges | about 21% of operating cost11 |
| Crew, maintenance, insurance and other | about 29-34% (calculated remainder); capital repayment is extra11 |
Worked example (calculated): a modern container ship uses about 0.014 tonnes of fuel per TEU per day. A 21-day Pacific crossing therefore burns about 0.29 tonnes per TEU; at 518 USD per tonne that is about 150 USD, and at 901 USD about 265 USD. A ship over 20 years old burns 0.033 tonnes per TEU per day, so the same box costs about 2.4 times as much fuel. This gap, more than engine efficiency alone, is why owners scrap old ships, slow down, and invest in larger vessels, better propellers and wind assistance.
Sources
- The United States Naval Nuclear Propulsion Program (2025 edition) US Department of Energy / Naval Reactors, 2025
- Oil prices and container shipping costs Federal Reserve Bank of St. Louis, 2026
- Operating costs of Panamax and post-Panamax containerships (Drewry data) The Geography of Transport Systems (Rodrigue), 2022