Shipping
Port of Felixstowe welcomes The Premier Alliance
Port of Felixstowe welcomes The Premier Alliance
AAL completes delivery of 500MW renewable energy project in Australia
ICS backs IMO net-zero framework but calls for clarity on incentives
DHL says tariff extension fuels more transpacific shipping volatility than help
Yang Ming adds LNG dual-fuel ships to advance fleet upgrade
Port of Long Beach cargo slows in June
Chinese shipyards’ market share drops amid US port fee concerns
Emirates Courier Express expands to Australia
DP World, Asian Terminals deploy first fleet of electric internal transfer vehicles in the Philippines
Houthis cause 18M tons of added CO2 emissions – Sea Intelligence
DHL Express, Neste ink deal to use made-in-Singapore SAF for international flights
Container traffic up at Port of Antwerp-Bruges, total throughput drops
Port of Los Angeles logs busiest June for cargo on record
DaChan Bay Terminals adds India service, boosts China-India logistics corridor
DP World to develop Syria's Tartus port under 30-year deal
Port of Long Beach terminal expansion breaks ground
Singapore named top international maritime centre for 12th straight year
North Europe port congestion to persist through 2025 – Xeneta
US sets new tariff rates on 14 countries as it moved deadline to August 1
Hamburg invests €1.1B in port infrastructure expansion
Gemini switches up Asia service amid Europe's port congestion
Global schedule reliability climbed in May despite trade disruptions
Asia-NAWC capacity volatility more than triples
Containers lost at sea up more than double in 2024
Hong Kong launches up to HK$2M bunkering incentive for LNG, methanol
Sea-Intel finds top deep-sea ports among least reliable
Port of NY/NJ tops US cargo port rankings in May
Maersk to resume port calls in Haifa
Ningbo-Zhoushan Port sets H1 container record
Mawani privatizes cargo terminals at 8 Saudi Ports
BIMCO: Stable demand outlook despite market uncertainties
Hapag-Lloyd rebrands SAAM Terminals
Port of Savannah achieves third month of over half-million TEUs
CMA CGM names Esra Bora as new general manager in China
Maersk halts port calls at Haifa citing threat risks
First mega-boxship transits the Suez Canal in 15 months
ONE adds 13,900 TEU vessel to fleet
Freightos: Iran-Israel conflict not impacting freight yet
CMA CGM says shipping activities ‘proceeding as normal’ in the Middle East
Sea-Intel: Niche carriers seizing Transpacific opportunity again
Hong Kong marks first SIMOPS LNG bunkering at Modern Terminals
Tariffs put brake on cargo volume growth at Port of Los Angeles
MPA, NYK Group expand autonomous ship trials
PSA International joins Global Centre for Maritime Decarbonisation
Chengdu-Shenzhen-Hong Kong rail-sea service launches
Global schedule reliability continues to increase in 2025
Sea-Intel: Major ocean carriers profitability around US$5.9B in Q1 2024
Gebrüder Weiss expands into Thailand
DP World, VIMC Lines launch domestic coastal logistics service
Singapore, France ink enhanced maritime partnership agreement
CMA CGM launches first fully-electric container barge in Vietnam
MSC container ship sinks off India coast
Port of Savannah container trade up 17% in April
DP World to launch US$2.5B logistics infrastructure investment in 2025
Port of Long Beach sees record April, warns of sharp May drop amid tariff impact
Suez Canal introduces rebates to regain containership traffic
CMA CGM warns extended China-US tariffs could disrupt global trade
U.S. slashes ‘de minimis’ tariff on small China parcels to 30%
LA, Long Beach ports warn of continued tariff uncertainty
China-US deescalation may spur early peak season
Yang Ming: US-China trade deal may spur demand, but uncertainty persists
US-China tariff pause offers temporary relief, could fuel another frontloading rush
Transpacific shipping faces capacity cuts as trade war escalates
Houthi ceasefire raises prospect of container traffic returning to Red Sea
Kale Logistics to develop Oman's national port community system
PSA BDP takes majority stake in Mexico’s ED Forwarding
Xeneta: ‘Ships for America Act’ adds more uncertainty to container shipping market
JAFZA marks 40 years with record US$190B in trade
Seafrigo expands multi-modal services to support global expansion
US port fees to have minimal impact on Transpacific niche carriers
Port fo NY/NJ is busiest US port in March
S&P: Liner shipping contributes US$1.1T to U.S. GDP
deugro Thailand delivers critical reactors for sustainable fuel production
Emirates Shipping Line joins World Shipping Council
Japanese shipyards may benefit from US port fees on Chinese vessels
MOL opens office in Washington, D.C.
WITH FUEL PRICES FALLING, LINES QUESTION WHETHER SLOW STEAMING NECESSARY
January 20, 2015

Bunker prices are continuing to fall as are bunker adjustment factor (BAF) charges made by the shipping lines to the shipper. In January 2014, the average BAF applied by shipping lines involved in the Asia/Europe trade was US$700/teu, but by December, that figure had fallen to around US$550/teu, reflecting a drop in fuel prices of more than 20% in the space of a year.

Inevitably, as bunker prices continue to fall, the subject of slow steaming and whether it is really necessary during slack season periods on the mainhaul trade to undertake this exercise, raises its head again, and more and more shipping lines voice their opinions on this idea of cost saving.

Slow steaming normally means the deployment of additional vessels, most likely laid up during the slack periods, and obviously costing the line for convenience of a lay up berth or anchorage, but with the price of fuel in recent years being so high, the lines saved by this exercise.

Now fuel prices are falling week on week and the increasing likelihood of slow steaming disappearing, the big question being asked is whether it would be necessary or not to operate all the vessels presently deployed today on the major trade lanes.

On this subject, shipping lines are united in their opinions, and the answer is an emphatic no.

If the lines worked together to take out capacity, many sources believe the path would be completely open for rate increases and more profitable times for the carriers, and the industry could rid itself of those heavy loss-making periods during the slack seasons. But withdrawing vessels from operational duties on any trade lane is not an easy task.

On the Asia/Europe and Asia/US trades, it would seem that the easy target for the withdrawal of capacity is the chartered vessel sector which is responsible, on the Asia/Europe trade, for almost 40% of the tonnage deployed.

On the face of it, shipping line executives believe the chartered vessel sector is the best target for any capacity withdrawal programme, but openly admit that things are not that easy.

“For example, complications can arise over time charter periods and early

cessation of a charter contract can cost the carrier quite heavily,” was a common comment.

Then there was the question of what happens if the price of fuel starts to rise again. Does that mean returning to slow steaming, and if so, where the extra capacity come from?

Of the 238 vessels deployed on the Asia/North Europe trade, 89 are chartered. That figure equates to 37.4% of the total capacity deployed on the trade, and all lines are adamant that there is plenty of capacity that could be withdrawn.

But nothing comes free, and the lines would have to forfeit most, if not all, of the overall cost. The premature ending of time charter contracts before the official expiry date, can cost deeply.

Then there’s the question of what happens if the price of fuel goes up again, and whether future deployment and charter contracts could come under some serious questioning.

As the slack season approaches following the usual Lunar New Year rush, the way ahead for the upcoming slack season is anything but clear for the shipping lines.

 

By Paul Richardson

Sea Freight Correspondent | London