LNG Shipping Break-Even Analysis: $594K Monthly Revenue

Fixed costs $413.0K Base overhead

Contribution margin 83.5% After variable costs

Break-even revenue $494.6K Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for LNG shipping and transportation.

Lean Base Full

Monthly revenue Higher monthly revenue gives more room after direct voyage income costs. $ Early month Scale month Variable expenses These are direct voyage and vessel costs that rise with revenue. $ Light load Heavy load

Money available to cover fixed costs $15,758,666 $18,583,333 revenue - $2,824,667 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin has to cover. $ Lean base Heavier base

Break-even chart Revenue Total costs

Which LNG shipping expenses are fixed, and which move with voyages?

Cost classification

Break-even is reliable only when voyage-driven items stay out of fixed overhead. Fuel, port fees, maintenance, and brokerage flex with revenue, while insurance, rent, software, and core staff create the monthly hurdle.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent & Utilities	Fixed	Include $15,000 per month in fixed overhead from Month 1 through Month 60.	Scaling rent with revenue even though the office bill does not move with voyages.
Compliance & Regulatory Software	Fixed	Include $3,000 per month as recurring overhead in the break-even base.	Treating required software as optional and understating the monthly hurdle.
Hull & Machinery Insurance Base	Fixed	Include $300,000 per month as fixed vessel insurance overhead.	Mixing vessel acquisition capex into operating break-even instead of keeping it separate.
Protection & Indemnity Insurance Base	Fixed	Include $75,000 per month as fixed liability insurance overhead.	Spreading it as a voyage percentage and hiding the true monthly cash burn.
Voyage Fuel Costs	Variable	Model at 7.0% of first-year revenue, declining to 5.0% by Year 5.	Locking fuel into fixed overhead and missing margin swings when voyage volume changes.
Port and Canal Fees	Variable	Model at 2.0% of first-year revenue, declining to 1.2% by Year 5.	Using one flat monthly charge even though fees follow route and voyage activity.
Vessel Maintenance & Supplies	Semi-variable	Start with the revenue-linked load of 6.0% in Year 1, then flex it with utilization.	Assuming maintenance stays flat while vessel use rises.
Management Payroll Step-Up	Semi-fixed	Keep launch leadership fixed, then step up when the Marine Superintendent and Compliance & Legal Officer begin in Year 2.	Averaging future hires into Month 1 and overstating the launch break-even point.

How does break-even change in lean, base, and full LNG shipping cases?

Scenario table

Year 1 EBITDA is about $95.8M, and operating break-even lands in Month 1. The base case needs about $594k/month of revenue to cover fixed costs, while lean has less cushion and full widens it.

Planning cases only; capex cash need sits outside operating margin.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean spot and COA mix	$3.5M	$0.6M	$496k	83.5%	$2.4M	Still above break-even, but the cushion is thin if spot coverage softens.
Base Year 1 plan	$10.2M	$1.7M	$496k	83.5%	$8.0M	Break-even revenue is about $594k/month, so fixed costs are covered early.
Full mature utilization	$45.9M	$5.2M	$551k	88.7%	$40.2M	Higher employment absorbs fixed costs fast and creates the widest cushion.

What breaks the break-even plan if freight revenue slips or voyage costs jump?

Stress test

Base case monthly revenue is about $10.17 million, so the plan has about $9.57 million of cushion above break-even. The weak spots are charter slippage, higher fuel and port costs, and fixed-cost creep from insurance and payroll.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$594,000/month	$9.57M cushion	Strong cushion if vessels stay covered.
Revenue shortfall	Cut charter, spot, and affreightment revenue 15%.	$594,000/month	$8.05M cushion	Idle days or weak charter coverage cut slack fast.
Fixed-cost increase	Raise insurance, compliance, legal, IT, office, and payroll 10%.	$653,000/month	$9.51M cushion	Insurance repricing lifts the cash floor.
Margin pressure	Lift voyage fuel, port, maintenance, and brokerage to 19.0% of revenue.	$613,000/month	$9.55M cushion	Fuel and port cost creep eats operating spread.
Combined pressure	Cut freight revenue 15% and lift voyage costs to 19.0%.	$613,000/month	$8.03M cushion	Lower rates plus higher voyage costs shrink slack.

What should the founder verify before committing to the first LNG carrier buys?

Founder checklist

Before you buy or charter the first two LNG carriers, confirm the contract book, insurance, crew, route access, and cash support all line up with the model. If any one slips, the Month 3 and Month 9 capital hits can outrun break-even.

1Vessel terms$220m + $225m

Verify purchase or charter terms before Month 3 and Month 9 so the two carrier commitments do not break the cash plan.

2Contract mix4 revenue streams

Confirm enough long-term time charters, spot voyages, contracts of affreightment, and boil-off gas work to support steady utilization.

3Insurance load$375k/mo

Bind hull and machinery insurance at $300,000 a month and protection and indemnity insurance at $75,000 a month before the first sailing.

4Crew payroll$1.0m/yr

Make sure the Year 1 core team is funded, because the CEO, commercial, technical, and finance roles set the operating base.

5Cash trough-$393.7m

Fund the Month 9 cash low, since the model bottoms at negative $393.7 million before later revenue can catch up.

6Route accessMonth 1

Check port access, canal exposure, and compliance software before launch so the first routes can actually support break-even revenue.