World News
High Bunker Prices Will Mean More Slow Steaming
"Stubbornly high" fuel prices and a rate war in east-west trades will force carriers to further reduce speeds, according to an analysis by Drewry.
The firm said it believes ocean carriers are currently losing money on the route and surplus capacity is likely to remain a problem.
There are 31 ships with a capacity of 10,000 twenty-foot equivalent-unit (TEU) or larger due for delivery this year, but Drewry said there isn't a corresponding growth in demand.
"Either more vessels will have to be laid up, or further slow steaming introduced," Drewry said.
"The latter is the most logical, particularly as it was difficult to justify throughout most of last year due to freight rates being so high."
Currently, Drewry found, there is a wide variation in speeds among carriers.
Speeds for westbound service between Asia and Europe range from 15.2 knots for G6 Alliance-Loop 4 to 22.2 knots for Maersk Line-AE2, and variation among companies for service between Asia and West Coast North America was similar.
Drewry said carriers do not seem to get a significant rate premium for faster service, and schedule optimisation seems to be more important.
A poll last year found that ship owners believe speeds of less than 20 knots are becoming the new standard for shipping.
Nippon Yusen Kabushiki Kaisha (NYK Line) has been promoting the importance of slow steaming among its partners and explaining methods for controlling adverse affects.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 509.00 | 4.50 | 623.00 | 3.00 |
| Rotterdam | 463.00 | 7.00 | 623.50 | 2.00 |
| Houston | 471.50 | 4.50 | 627.50 | 3.50 |
| Fujairah | 501.00 | 4.50 | 714.00 | 1.00 |
| Global 20 Ports Average | 529.00 | 2.50 | 714.50 | 2.50 |
| Global 4 Ports Average | 486.00 | 3.00 | 647.00 | 2.50 |
| Global Average Bunker Price | 572.50 | 2.00 | 753.00 | 2.00 |
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