BIMCO: No Case to Increase Vessel Speeds

by Ship & Bunker News Team
Friday December 19, 2014

Oil prices may still be continuing its downward slide, but the overcapacity glutting the shipping industry means that slow-steaming should continue, according to BIMCO

"When you consider the entire dry bulk fleet on a global scale, overcapacity remains substantial," said Peter Sand, chief shipping analyst at BIMCO, adding that there was no wider case to be made at the moment for speeding up ships. 

"BIMCO concurs with the estimates made by Drewry, which point to an operating surplus of some 25 percent in the market today."

For that reason, Sand said that slow-steaming would remain a central strategy for shippers' profitability, and that the industry would have to see several years of high demand and low capacity growth in order to see a dent made in the overcapacity issue. 

"Lower ship speed has significantly assisted freight rates in staying higher than they would in the case of all ships steaming at full ahead," he said.

"Reversing this trend may also mean reversing the benefits obtained from slow steaming."

Maersk Line Asia Pacific CEO Lars Mikael Jensen also chimed in, having commented earlier this month that bunker fuel prices would have to remain low for a consistent period of time before the company would entertain speeding up ships.