What are tonne-miles?

How is it calculated?

Multiply the tonnes carried by the nautical miles sailed. The result counts transport work, not trade volume.

An example with round numbers, not market figures: a tanker loads 2 million barrels of crude, roughly 270,000 tonnes. On a 5,000-mile voyage that is 1.35 billion tonne-miles. Send the same cargo 8,000 miles instead and it is 2.16 billion: 60% more transport work for the same barrels.

Why does distance matter so much?

A ship on a longer voyage carries fewer cargoes a year. Continuing the example, and taking voyage time to grow with distance: if a tanker manages six round trips a year on the 5,000-mile route, it manages fewer than four on the 8,000-mile one. Moving the same yearly volume then takes more ships.

Routes lengthen for several reasons:

• Diversions. Ships avoiding the Red Sea sail round the Cape of Good Hope instead of through the Suez Canal, adding distance between Asia and Europe.
• New trade patterns. Crude shipped from the Atlantic basin (the Americas and West Africa) to refiners in Asia travels further than crude from the Middle East to the same refiners.
• Sanctions and policy. When buyers and sellers are pushed apart, the cargo still moves, but often over a longer route.

Slower sailing speeds and queues at ports or canals have a similar effect: each cargo ties up a ship for more days.

How does it show up in rates?

The fleet cannot grow quickly, because a new ship takes years to order and build. When tonne-miles rise faster than the fleet, more cargoes compete for the ships that are free, and spot rates rise. Time-charter rates follow as charters come up for renewal. When routes shorten again, the extra demand disappears and rates can fall.

Our pages do not model tonne-miles. Their effect reaches our estimates through the market rates used for a company's open days (see how open days are priced), and through the time-charter equivalent (TCE) each company then reports.