Abstract: The speed of a vehicle, and particularly a ship, is controlled to minimize the sum of fixed and variable operating costs. The variable costs are incurred substantially only due to fuel usage. The rotational speed and torque parameters of the ship propeller shaft are measured and utilized to derive an expression for shaft horsepower in terms of these parameters. The variable cost function is derived from the horsepower function, fuel factor, unit volume fuel cost and voyage distance for various ship speeds. The fixed cost function is determined on the basis of voyage time for the various speeds, loading time and total annual costs for maintaining the ship per unit of time. The ship throttle is controlled to operate at the speed at which the total fixed and variable costs is minimized.