Title
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?
Author
Faculty/Department
Institute for Transport en Maritime Management (ITMMA)
Publication type
article
Publication
Subject
Economics
Source (journal)
INTERNATIONAL JOURNAL OF LOGISTICS MANAGEMENT
Volume/pages
24(2013) :1 , p. 73-86
ISSN
0957-4093
ISI
000322937500005
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
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.
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