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Slow steaming impacts on ocean carriers and shippers

Author

Listed:
  • Michael Maloni

    (Department of Management and Entrepreneurship (BB337), Coles College of Business, Kennesaw State University, 1000 Chastain Road, #0404, Kennesaw, Georgia 30144-5591, USA)

  • Jomon Aliyas Paul

    (Department of Economics, Finance, & Quantitative Analysis, Coles College of Business, Kennesaw State University, 1000 Chastain Road, Kennesaw, Georgia 30144, USA)

  • David M Gligor

    (Department of Marketing and Supply Chain Management, Henry W. Bloch School of Management, University of Missouri-Kansas City, 5110 Cherry Street, Kansas City, MO 64110, USA)

Abstract

Ocean container carriers have implemented slow steaming (reduced vessel speeds) in recent years to improve fuel efficiency and lower greenhouse gas emissions. However, many shippers oppose the practice due to increased pipeline inventory associated with longer transit times. Given this conflict, this article seeks to quantify the costs and benefits of slow steaming relative to carriers and shippers. We simulate a high volume Asia-North America container trade lane to estimate slow steaming impacts under different vessel speeds, volumes and fuel prices. Under current conditions, the results justify slow steaming practices, revealing extra slow steaming as the most beneficial vessel speed with a 20 per cent reduction in total costs and a 43 per cent reduction in carbon dioxide emissions. Extra slow steaming is also optimal for future volumes and a wide range of fuel prices. Furthermore, the results detail carrier and shipper cost trade-offs, thus offering practical evidence and transparency to the industry on how to create financial equity in facilitating contractual-based agreements for vessel speed standards.

Suggested Citation

  • Michael Maloni & Jomon Aliyas Paul & David M Gligor, 2013. "Slow steaming impacts on ocean carriers and shippers," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 15(2), pages 151-171, June.
  • Handle: RePEc:pal:marecl:v:15:y:2013:i:2:p:151-171
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    Cited by:

    1. Tran, Nguyen Khoi & Haasis, Hans-Dietrich, 2015. "An empirical study of fleet expansion and growth of ship size in container liner shipping," International Journal of Production Economics, Elsevier, vol. 159(C), pages 241-253.
    2. Nguyen Tran & Hans-Dietrich Haasis, 2014. "Empirical analysis of the container liner shipping network on the East-West corridor (1995–2011)," Netnomics, Springer, vol. 15(3), pages 121-153, November.
    3. Fan, Yingjie & Schwartz, Frank & Voß, Stefan, 2017. "Flexible supply chain planning based on variable transportation modes," International Journal of Production Economics, Elsevier, vol. 183(PC), pages 654-666.
    4. Aydin, N. & Lee, H. & Mansouri, S.A., 2017. "Speed optimization and bunkering in liner shipping in the presence of uncertain service times and time windows at ports," European Journal of Operational Research, Elsevier, vol. 259(1), pages 143-154.
    5. Gu, Yewen & Wallace, Stein W. & Wang, Xin, 2016. "The Impact of Bunker Risk Management on CO2 Emissions in Maritime Transportation Under ECA Regulation," Discussion Papers 2016/17, Norwegian School of Economics, Department of Business and Management Science.
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    12. repec:eee:transa:v:110:y:2018:i:c:p:291-305 is not listed on IDEAS

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