The container market is improving every month and as the peak season approaches, we can’t help wondering which carrier will be the first to break ranks on slow steaming.
Out-of-control bunker fuel prices and overcapacity pushed container lines into the practice of slowing down their vessels on long haul trades.
It all started around 2008 but by the end of last year, pretty much everyone was doing it. The huge savings in fuel could not be ignored, and by slowing vessels it also enabled the carriers to slip an extra ship into a string. That allowed the lines to address the capacity overhang.
The carriers were quick to talk up the benefits of slow steaming to the environment with fewer emissions and lower fuel consumption helping to save mankind. That may be true, but we all know it was done as much to save money as it was to save the human race.
But whatever the reason, slowly sailing vessels have caused problems for the customers of container lines. The new schedules were unilaterally imposed and as a result shipments take longer to reach their destinations.
Extra ships on strings have not led to extra space and cargo is often subjected to delays and being rolled over at China’s busier ports.
This frustrates shippers, and not just the smaller outfits. DHL Asia-Pacific head of global customer solutions Richard Owens told IFW that shippers were being forced to rethink their entire supply chains.
He said automotive and hi-tech suppliers were rewriting liability clauses for late deliveries because of concerns over reliability. Slots on container ships and the ships themselves were in short supply and their cargo was often rolled, Owens said.
If that is happening to a company the size of DHL, you can bet smaller forwarders are feeling the pain a lot more acutely.
Slow steaming has become an industry standard, just like all the big lines predicted when they first started putting the brakes on. But it is a standard that is deeply unpopular with customers of the carriers, and as soon as business begins to show a sustained recovery you can bet the “full steam ahead” call will go down the pipe to the engine room.
It just needs one of the big lines to speed up and the others will follow.