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Viability of Slow Steaming in Container Shipping Along the Northern Sea Route
Tekijät: Kiiski Tuomas
Toimittaja: Thorsten Blecker, Wolgang Kersten and Christian M. Ringle
Kustannuspaikka: Cologne
Julkaisuvuosi: 2013
Kokoomateoksen nimi: Pioneering Solutions in Supply Chain Performance Management
ISBN: 978-3-8441-0267-3
Tiivistelmä
Since 2008 shipping companies have tried to find alternative ways to cut bunker costs due to the pressure of high bunker prices and upcoming stringent environmental regulations. One plausible solution is to reduce the ships’ sailing speeds also known as slow steaming. It has already widely been applied in Asia-Europe trade via Suez Canal route (SCR) with beneficial results.
This paper assesses the Northern Sea Route’s (NSR) competitiveness against the SCR in container shipping by using slow steaming. Calculations are based on a single voyage on the Hamburg-Yokohama route with easy ice conditions on NSR and a container ship with a nominal capacity of 8,400 TEU is used (in calculations). Analysis is made with a detailed-level cost calculation model which enables the assessment of slow steaming’s effects to the profitability of a liner shipping company. In addition to shipping related cost comparison, inventory costs to shippers and ship’s CO2 emissions are evaluated. The results indicate that currently slow steaming in NSR is not viable compared to SCR no matter how much the speeds are reduced. The main reason is the burden of high and undefined icebreaking tariff. In order to make NSR competitive against SCR, the icebreaking tariffs should be dropped at least 70 percent while adding the reduction of waiting times. The effects of slow steaming in NSR for fuel economy are not so significant as in SCR. Total CO2 emissions per single voyage in NSR with similar speeds are about half of the levels in SCR.
Since 2008 shipping companies have tried to find alternative ways to cut bunker costs due to the pressure of high bunker prices and upcoming stringent environmental regulations. One plausible solution is to reduce the ships’ sailing speeds also known as slow steaming. It has already widely been applied in Asia-Europe trade via Suez Canal route (SCR) with beneficial results.
This paper assesses the Northern Sea Route’s (NSR) competitiveness against the SCR in container shipping by using slow steaming. Calculations are based on a single voyage on the Hamburg-Yokohama route with easy ice conditions on NSR and a container ship with a nominal capacity of 8,400 TEU is used (in calculations). Analysis is made with a detailed-level cost calculation model which enables the assessment of slow steaming’s effects to the profitability of a liner shipping company. In addition to shipping related cost comparison, inventory costs to shippers and ship’s CO2 emissions are evaluated. The results indicate that currently slow steaming in NSR is not viable compared to SCR no matter how much the speeds are reduced. The main reason is the burden of high and undefined icebreaking tariff. In order to make NSR competitive against SCR, the icebreaking tariffs should be dropped at least 70 percent while adding the reduction of waiting times. The effects of slow steaming in NSR for fuel economy are not so significant as in SCR. Total CO2 emissions per single voyage in NSR with similar speeds are about half of the levels in SCR.
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