Economics could be shoved aside
With maritime economists warning that the environment and green issues will head to the top of the ranking board when carriers and shippers choose ports, slow steaming is about to become a divisive issue.
Cynics maintain that carriers tamp down the turbines to save money and not to spare the air. But /retailers and industrialists are now pressing for slow steaming to be part of the effort. And the lines are listening.
So much so that the World Shipping Council reckons that peak season to the US will be affected, with 3 million fewer TEU available. (My personal opinion is that the council discusses slow steaming through gritted teeth. Its agenda is driven by economic viability, otherwise known as profit and loss, balanced against safety and security.)
Coupled with this is a presentation by economist Paul Bingham to the Northwest Intermodal. “As consumers and businesses start to use environmental scorecards in their supply chain, they will increasingly look to compliance or performance measures that are not just in terms of cost and liability that traditionally transportation carriers have striven to optimize…they’re also going to need to be able to demonstrate environmental compliance in order to retain business."
And slow steaming? “Environmentally driven factors like slow steaming, adopted first to save money, are actually being sustained, especially out of pressure from places like Europe with emissions and carbon compliance.”
Bingham says West Coast ports will have an edge because they are leading the pack on all these initiatives, "compared to those ports, especially on the Gulf Coast or East Coast, that are behind in trying to be compliant or to be as green a port as possible with their operations."
Then he tackles an issue at the very heart of the World Shipping Council's thinking. "There’s a limit… If environmental controls and factors get priced to such a degree that it makes sense to shorten supply chains up to be bringing that production back somewhere in North America, for example, in Mexico – and if we get to that point in terms of clusters of near-shoring production and trade – that can have a dampening effect in the long term on trade capacity and volume.”
To that, the council and many carriers would say "Amen."
Regardless of the cost factor, however, Los Angeles and Long Beach are too far down the slipway to have a re-think. California authorities must also be considered, because they don't give a hoot about cost.
California might be ahead in carbon cutting, but it could end up losing more than it gains.