Slow steaming in container liner shipping: is there any impact on fuel surcharge practices?

Slow steaming in container liner shipping: is there any impact on fuel surcharge practices? Purpose – Slow steaming has been implemented by the main liner shipping companies since 2008. The reduction in vessel speed affects fuel consumption and should be reflected within the fuel surcharges paid by shippers. The purpose of this paper is to assess if this was the case for the main outbound European container trades from the port of Antwerp. Design/methodology/approach – Through an extensive analysis of liner service characteristics, fuel costs and fuel surcharges this paper provides an answer to three research questions: how significant are slow steaming practices in container liner shipping?; what is the impact of slow steaming on fuel consumption and liner service characteristics?; and to what extent has slow steaming changed the relation between fuel costs and fuel surcharges imposed on shippers by shipping lines? Findings – It is found that slow steaming practices are not implemented on all trade routes, but depend on operational aspects such as distances covered and the characteristics of the ships deployed. While it could be expected that the reduction in vessel speed should be reflected within the fuel surcharges paid by shippers, the empirical results show that on most trade routes slow steaming did not fundamentally change the relation between fuel costs and fuel surcharges imposed on shippers by shipping lines. Practical implications – The paper has practical relevance to actors active in global ocean freight logistics, particularly since its results can be used as input for ongoing debates between shipping lines and shippers on pricing and surcharges in container shipping. Originality/value – This paper is the first extensive study that makes an explicit link between slow steaming practices and fuel surcharge policies of shipping lines. A method was developed to estimate fuel consumption levels of ships at various speeds and to link the associated fuel costs to real‐life bunker surcharges imposed on shippers by shipping lines. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The International Journal of Logistics Management Emerald Publishing

Slow steaming in container liner shipping: is there any impact on fuel surcharge practices?

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Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
0957-4093
DOI
10.1108/IJLM-05-2013-0055
Publisher site
See Article on Publisher Site

Abstract

Purpose – Slow steaming has been implemented by the main liner shipping companies since 2008. The reduction in vessel speed affects fuel consumption and should be reflected within the fuel surcharges paid by shippers. The purpose of this paper is to assess if this was the case for the main outbound European container trades from the port of Antwerp. Design/methodology/approach – Through an extensive analysis of liner service characteristics, fuel costs and fuel surcharges this paper provides an answer to three research questions: how significant are slow steaming practices in container liner shipping?; what is the impact of slow steaming on fuel consumption and liner service characteristics?; and to what extent has slow steaming changed the relation between fuel costs and fuel surcharges imposed on shippers by shipping lines? Findings – It is found that slow steaming practices are not implemented on all trade routes, but depend on operational aspects such as distances covered and the characteristics of the ships deployed. While it could be expected that the reduction in vessel speed should be reflected within the fuel surcharges paid by shippers, the empirical results show that on most trade routes slow steaming did not fundamentally change the relation between fuel costs and fuel surcharges imposed on shippers by shipping lines. Practical implications – The paper has practical relevance to actors active in global ocean freight logistics, particularly since its results can be used as input for ongoing debates between shipping lines and shippers on pricing and surcharges in container shipping. Originality/value – This paper is the first extensive study that makes an explicit link between slow steaming practices and fuel surcharge policies of shipping lines. A method was developed to estimate fuel consumption levels of ships at various speeds and to link the associated fuel costs to real‐life bunker surcharges imposed on shippers by shipping lines.

Journal

The International Journal of Logistics ManagementEmerald Publishing

Published: May 17, 2013

Keywords: Liners; Fuels; Freight containers; Fuel consumption; Liner shipping; Fuel surcharges; Slow steaming

References

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