WMU Professor Tells Singapore Audience Slow Steaming Economics Are Complex

Ma says he considers slow steaming to be affected by an interplay of six forces

The Vice President of World Maritime University (WMU), Sweden, Tuesday said in Singapore that there is more than meets the eye when it comes to slow steaming, Seatrade Global reports.

"Shipping lines purposely reduce the speed of ships for a variety of reasons, but particularly due to economics," said Ma Shuo.

"I consider slow steaming to be affected by an interplay of six forces," continued Ma, listing freight rates, bunker cost, ship cost, cargo cost, interest rate and environmental cost or factors.

"But basically the most important and dominating factor is freight rate," he emphasised, continuing "this means that when freight rates are high, speed has to be high."

While slow steaming has become commonplace in shipping markets since 2008, with shipping companies focussing on cost reduction, some commentators have asked whether the practice will continue if and when boom times return to the shipping markets.

"During the previous shipping boom, had anyone heard of slow steaming?" he said.

"Shipping companies would be foolish to slow steam back then when freight rates are high and it made sense to sail at the fastest speed in order to achieve higher turnarounds for each vessel," argued Ma.

But he also said that bunker prices are the second most important factor in determining optimal steaming speed and predicted that with current high prices slow steaming is likely to continue in the short to medium term.

He pointed as well to new generations of ships designed specifically to be operated at lower speeds.

On the question of whether or not the practice of slow steaming will continue in the long term, Ma conceded that "no one knows."

The Ocean Three alliance said recently they would save a combined total of $1 billion by slow steaming.