Cargo Business Newswire

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Thursday, January 26, 2012

Top Story

Slow steaming as low it goes?

The global containership fleet may have slowed down as much as possible – steaming 11 percent lower since last August, according to industry data.

The “slow-steaming” approach reportedly helped the container lines to profitability in 2010; however, there may not be a speed low enough to help stem the tide of over-capacity that is forecast for 2012.

“Container lines have already exhausted most of the tricks for absorbing capacity,” said Bjorn Vang Jensen, vice president at Electrolux AB, a shipper of about 150,000 containers per year. “Some of these container ships are now so slow that they’re close to the speeds of the old sailing ships. The clippers might actually have been faster,” he told Bloomberg.

The slow boat approach might not be enough for smaller container-shipping lines according to Drewry Shipping Consultants Ltd. that estimates some of those companies could go broke by the year’s second half with capacity outweighing depressed freight rates.

Slow steaming, initially launched full-scale by Maersk, is designed to be a fuel-saving measure for ship operators in the face of over-capacity and lower shipping rates.

For the full Bloomberg Businessweek story: www.businessweek.com