Shipping lines asked to report on benefits of slow steaming

Exporters and container shipping lines in Hong Kong and the mainland are being urged by US federal maritime authorities to help quantify the cost and environmental benefits of ships sailing at slower speeds, reported the South China Morning Post.


The move is part of a worldwide probe by the Federal Maritime Commission to assess if benefits of slow steaming have been passed on to exporters by the liner shipping firms, especially on transpacific services.


One expert estimated that slow steaming had saved the 15 member shipping lines of the Transpacific Stabilisation Agreement, which carry about 95 per cent of seaborne cargo across the Pacific Ocean, around US$2 billion over the past 18 months.


The shipping companies affected include Orient Overseas Container Line, Cosco Container Lines and China Shipping Container Lines.


Lowry Crook, chief of staff at the FMC in Washington, said: "We would be quite interested in the views of shippers, carriers, and intermediaries in Hong Kong and China, especially since China is the United States' largest ocean trading partner."


The commission launched its investigation last week and has given exporters, container lines and logistics companies until April 5 to respond. It is seeking answers to more than 40 detailed questions, including an assessment of the advantages and disadvantages of slow steaming such as the impact on costs, the swiftness of moving cargo, whether carriers plan to extend the initiative this year and if they will expand their fleets.


Slow steaming involves shipping firms slashing the speed of container ship from around 24 knots to 14-18 knots. It was introduced by container lines about two years ago as a way of cutting costs and tackling the oversupply of ships entering the market as a time when cargo growth slumped.


Around 500 container ships with a capacity of over 8,000 TEUs joined the global fleet in 2009 and 2010, while in tonnage terms the fleet grew by 22 million deadweight tonnes in the past three years to 183.4 million deadweight tonnes in 2010.


Maersk Line said a 20 per cent reduction in a ship's speed would cut fuel consumption by 40 per cent, while also generating a 40 per cent drop in carbon dioxide emissions. Carriers also added up to two extra ships to each service to maintain the same service frequency and compensate for a lower average speed.


OOCL cut fuel consumption by seven per cent in the first half of last year as a result of slow steaming. While the average cost of fuel rose 59 per cent to US$463 per tonne between January and June 2010, total fuel costs only rose by 48 per cent in the same period. This was despite an increase in capacity, from 351,000 TEUs to 377,000 TEUs, as new vessels entered the fleet.


Carriers have been able to offset the higher fuel costs through a fuel surcharge levied using a special formula on cargo shipped by exporters.


Crook said: "The price according to the formula adjusts weekly in response to fuel cost changes, but we have not seen an adjustment to the formula to reflect savings from slow steaming."


The commission said: "More than half of the 45 weekly services operating between US West Coast ports and Asia are currently slow steaming, while more than three-fourths of the 15 weekly services operating between US East Coast ports and Asia are doing so."
(Source:http://en.portnews.ru)