Fuel price leads carriers into the green business
Shippers want faster transit times – lines want to save fuel: The two positions may not be mutually exclusive for much longer.
Ever since container lines desperate to cut down on high fuel prices embraced slow steaming, shippers have been complaining about it.
The days, and sometimes weeks, added to transit times disrupt their supply chains, increase the need for buffer stocks and simply cost them money. Sure, the added voyage times can be factored in, but with demand forecasting very tricky in today’s volatile economic times, having parts or products spending longer in transit can cause delays and ring up substantial costs.
Speed has always been important in the shipping business because time costs money. Time in port, time waiting outside or time taken getting from A to B all has a value.
So classification societies, shipowners and the building yards got together and began to work on new designs that made ships more fuel efficient. Each year new advances are being made as technology improves the performance of engines or the resistance of hulls, all with a view to making ships burn less fuel and emit fewer emissions.
Maersk’s Triple-E 18,000 TEU ships, for instance, will be the greenest yet, lowering CO2 emissions per container moved by 50 percent with a unique hull design and an engine optimized to operate at slower speeds.
The problem is that customers of the lines want the ships to sail faster. Burning less fuel is important in terms of improving carrier profitability and saving the Earth, but longer voyage times do not work for many shippers. And we would argue that having more ships in service because strings have all been slowed down will increase the emissions being produced by container lines.
The industry has realized this and increasing the economical speed of new ships is a focus of engine makers supplying the yards. Ships need to be able to sail within an ideal speed band that will fluctuate depending on the current price of oil. Finding that elusive perfect speed is the key – too slow and shippers moan, too fast and carriers complain.
With all the excess capacity flooding into service you would expect the yards to be empty or even going out of business. However, it is the exact opposite.
The high price of bunker fuel is encouraging lines to order the latest fuel-efficient vessels while speeding up scrapping or relocating ships to shorter trades. It is not a booming market, but the yards are doing good business.
Even LNG-powered container ships are being built. They provide better economics, emissions and can save lines money. There are a few ferries and offshore supply ships using LNG, but the lack of supply at ports around the world is a limiting factor.