MARITIME/PORTS
transportationreport
Slowing container ships to
a sea crawl saves fuel and
cuts carbon. It also has
implications for customers’
supply chains.
Slow steam ahead Slow steam ahead
THE PROVERBIAL “SLOW BOAT TO CHINA,” FROM CHINA, OR TO AND FROM MOST ANYwhere else on the water has gotten markedly slower in the past four years. And it has created additional supply chain issues for shippers and importers already struggling to manage their increasingly complex global networks.
“Slow-steaming,” the practice of reducing vessel speeds to conserve fuel and cut carbon emissions, was introduced in 2008 during a period of oil price volatility and a nasty global recession that
led to unprecedented financial losses in 2009 for the ocean liner industry.
After making money in 2010 as businesses replenished their inventories and carriers laid up ships
to drive down costs, liner companies are expected to suffer billions of dollars in losses in 2011 when
the final numbers are reported. The profit prospects look equally bleak for 2012, as carriers cope
with problems that beset them last year, namely an oversupply of vessels, a leveling off in demand,
and the inability to push through sustainable and compensatory rate increases.
To make things tougher, bunker fuel costs recently climbed to over $700 a ton from $350 a ton in
recession-wracked 2009. No one expects bunker fuel to plumb 2009 depths any time soon.
Given the current operating environment and industry estimates that slow-steaming could slash
a vessel’s operating costs by between 3 and 5 percent depending on the knots and distance, it is
unsurprising that it has become a permanent fixture in the seafaring trade.
“Slow-steaming is here to stay,” Henry L. (Rick) Wen Jr., vice president, business
development/public affairs for the U.S. arm of liner giant Orient Overseas Container Line Inc., said
at an industry conference in Atlanta in February.
