Business
BIMCO: Liner supply falls as operators reduce average sailing speed by 4%
When ships adjust their speed, the transport capacity is affected and the adjustment can be an effective way of managing capacity supply; lower speeds also reduce bunker oil consumption.
International shipping association BIMCO on Wednesday (3 May) published a market report elaborating the average sailing speed has been reduced by 4% for the first quarter of 2023. Lower sailing speeds reduces bunker oil consumption and greenhouse gas emissions:
During the COVID-19 pandemic, liner operators increased the average sailing speed by up to 4% due to strong demand and widespread port congestion. Today, the situation is very different and in the first quarter of 2023 the average sailing speed has slowed to 13.8 knots, down 4% y/y, and could drop by 10% before 2025.
When ships adjust their speed, the transport capacity is affected and the adjustment can be an effective way of managing capacity supply. Lower sailing speeds also reduce bunker oil consumption and greenhouse gas emissions. Slow steaming was first introduced in the aftermath of the financial crisis, cutting sailing speed on mainline routes by as much as 20%.
Average sailing speed has reduced significantly, although the traditional faster speed in the head-haul direction remains. The larger ships sailing intercontinental trades have also continued to sail faster than the smaller ships in intra-regional trades. These traditions may, however, also be about to change.
In 2019, the largest ships sailed on average 2.6 knots faster than the smallest ships. During the first quarter of 2022 that speed difference had narrowed to 1.8 and further to 1.6 during the first quarter of 2023. As a result, the average sailing speed weighted by the ships’ TEU capacity fell by 6% y/y in the first quarter of 2023 whereas the simple average sailing speed fell only 4% y/y. Supply has therefore decreased faster than the sailing speed.
The speed difference between head-haul and back-haul direction may also be reduced in the future. To comply with the Energy Efficiency Existing Ship Index (EEXI) some ships have had to install Engine Power Limitations (EPL), reducing their top speed. In order to maintain the buffer between the top speed and scheduled speed (allowing ships to recover from delays in port or due to weather) the scheduled speed must be reduced. This will naturally impact mostly the faster head-haul direction and narrow difference in speed between the directions. The Carbon Intensity Indicator (CII) regulation and overall greenhouse gas emission targets may drive further reductions in sailing speed.
In part, the lower average sailing speed may be due to improved port congestion and some ships returning more slowly to Asia-Pacific than normal. However, we still believe it is a good indication of things to come. As highlighted in our Container Market Overview & Outlook reports throughout 2022, we believe that sailing speeds could fall by 10% before 2025.
Photo credit: BIMCO
Published: 9 May, 2023
Bunker Fuel
China: Zhoushan to host 7th IPEC commodities, bunker conferences on 16 to 17 October
Global marine bunker development will be among main topics of discussion at the 7th International Petroleum and Natural Gas Enterprises Conference (IPEC).
The 7th International Petroleum and Natural Gas Enterprises Conference (IPEC) is taking place at Zhoushan, Zhejiang province, China between 16 to 17 October.
The agenda, provided by the Zhoushan High-tech Zone Administrative Committee to foreign event media partner Singapore bunkering publication Manifold Times, is as follows:
16 October
- Registration and sign-in for participating guests
- Meetings between Zhejiang Provincial and Zhoushan Municipal leaders with VIPs
17 October
Morning
Plenary Session of the Conference (Oriental Hall, Zhoushan International Conference Center)
- Leader’s speech, guest keynote speech, signing of major projects
Discussion Topics [*17 October, 2pm to 5pm]
Focus Topic Meeting: Global marine bunker development*
Location: Haitian Hall, Haizhongzhou International Hotel, Zhoushan
14:00-14:05 - Opening of the Meeting
14:05-14:15 - Speech by Leaders
14:15-14:30 - Announcement of "Top Ten Global Bunkering Ports" and "Top Ten Global Bunkering Companies"
14:30-14:40 - Announcement of Construction Work of Northeast Asia Bonded Marine Fuel Bunkering Hub
14:40-14:50 – Launch ceremony of Zhoushan "White-list" Bunker Barge Mass Flow Meter System Pilot Certification Programme
14:50-15:10 - Signing Ceremony
15:10-16:10 - Keynote speech
16:10-16:35 - Coffee break
16:35-17:05 - Roundtable forum (Topic: Facing green and low-carbon transformation in global shipping, how do marine fuels change in response to the trend?)
17:05-17:35 - Roundtable forum (Topic: The road to develop high-quality offshore fuel bunkering metering under the new developments)
17:35-17:40 - Moderator’s summary
Utilising financial innovation, futures and spot cooperation to promote the construction of a hub for the allocation of bulk commodity resources*
Location: Putuo Hall, Zhoushan International Conference Center
Open development of global shipping trade*
Location: Donghai Hall, Hilton Zhoushan
International iron ore trade development*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan
Development of China's new chemical materials industry during the “15th Five-Year Plan”*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan
Development of non-ferrous metal mining industry*
Location: Lianhua Ocean Hall, Hilton Zhoushan
16 and 17 October
International maritime law of the free trade port (zone)
Location: Fortune Hall, Zhoushan CaiFu Hotel
Photo credit: Zhoushan High-tech Zone Administrative Committee
Published: 11 October, 2024
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