Cargo interests in the Asia Europe container trade have long complained that slow steaming may be fine for the lines but it does very little for their own cash flows and bottom line figures. Now it seems that the tide may be turning. Slow steaming was introduced for multiple reasons; to reduce fuel consumption when bunker costs were high, to reduce capacity in the sector and most recently for new ships to meet EEDI rules. But with little if any signs of improvement in the fortunes of container operators, the recent rejigging of alliances seems to have heralded a return to faster transit times. The gauntlet was thrown down last week by the newly formed The Alliance but has been picked up by 2M which has reduced port calls on several loops to improve transit times and reliability. It is too early to say if there will be a transit time war between different carrier groupings but there is a chance that such will be the case. To some old hands, things are beginning to look a little like the mid to late 1970s when the various oil crises saw first a slowdown in average ship speeds and then the advent of giant vessels designed to take advantage of economies of scale. We have seen both in the modern container sector over the last eight years but if history repeats itself will we see the giant box behemoths put out to grass and speeds for newbuildings moving back up to 25-26kt? The former is possible but the latter will be made more difficult by EEDI rules although it should not be forgotten that there are plenty of ships built prior to the 2015 phase 1 deadline that are quite capable of outstripping their younger rivals in terms of speed. Of course some of the current overcapacity was even brought about by owners anxious not to be lift without ships that can speed up when required.
So much for slow steaming
5 days ago