ALTHOUGH slow steaming continues to be a contentious issue with shippers, the current rate war on Asia-Europe and Asia-US rotes, combined with a flood of new ships
Rate war will result in more slow steaming to consume capacity afloat
ALTHOUGH slow steaming continues to be a contentious issue with shippers, the current rate war on Asia-Europe and Asia-US rotes, combined with a flood of new ships, will force carriers to resort to more slow steaming, says Drewry Maritime Research.
The London analysts say that with east-west freight rates now falling to unprofitable levels, carriers will take the view that "shippers get the service they pay for" and their ships will take the obvious slow-steaming course to cost saving.
At the end of April, there were still another 31 ships of more than 10,000 TEU each due for delivery this year as carriers running out roles for their unwanted 8,000-TEUers, said the Drewry report.
At the same time, cargo growth between Asia and the US is insufficient, as it is between Asia the east coast South America, which means that either more vessels will be laid up, or more slow steaming introduced. The latter is the most logical, as it was difficult to justify throughout most of last year due to freight rates being so high, said Drewry analysts.
According to Drewry's Container Forecaster's Slow Steaming Monitor, the average number of vessels deployed in services between Asia and north Europe only shifted from 10.4 in 2Q12 to 10.6 in 3Q12, to 10.5 in 4Q12 and 10.7 in 1Q13. The corresponding changes between north east Asia and the west coast North America were 5.7, 5.7, 5.7 and 6.0.
Estimated overall vessel speeds remained more-or-less constant between September and March, although Drewry's research shows that there were wide variances at individual schedule level, depending on the extent of port optimisation required.
For an average voyage between Asia and North Europe deploying 11 vessels running at 19 kilometres per hour westbound and 15 kph eastbound, an extra vessel could be added by increasing westbound transit time by two days by slowing 1.5 kph, which would mean having to add five days on the way back through a speed reduction of 2 kph.
The calculation is more difficult in the transpacific due to the much more variable transit times of existing services between north, central and southern Asia to north, central and southern west coast North American ports, but due to the much shorter distances involved, the time lost would be far less.
Further vessel reductions between Asia and Europe and between Asia and the US, should be expected soon. It would result in longer transits, but schedule reliability should improve because of the greater opportunity for making up lost time, the Drewry report said.
