Slow Boat From China

 Manufacturers and retailers looking to cut shipping costs by slowing their supply chains are finding unlikely new supporters of the strategy: the ocean container lines that carry the overwhelming majority of goods in international trade.

Financially strapped ocean carriers are cutting fuel costs by reducing vessel speeds on a growing number of long routes, and the impact of what’s called slow steaming is starting to reverberate across supply chains. Even amid a halting recovery, the economy is very literally slowing down on the water, with dozens of routes — mostly those out of Asia — extended by several days, and some shippers say they are having to adjust inventories to the changing service patterns.

Shippers may have to get used to it. Carriers say what began as a cost-saving strategy will likely last into any recovery in global trade when carriers and regulators see the environmental benefits of slower speeds.

“I think the advent of slow-steaming on the trans-Pacific is an unavoidable outcome of the economics today,” said Ron Widdows, group president and CEO of Neptune Orient Lines, the Singapore-based parent of APL. “It has become quite a usual occurrence in other trades. But I think it is a glimpse of the future in the way this industry is going to have to operate, because of the need to reduce emissions.”

Jorgen Harling, vice president of global network design at Maersk Line, said engine speeds and vessel emissions “are 100 percent correlated.” He said slow steaming “is now becoming the industry standard, and everybody is getting used to it. I think we are entering a new era.”

Slow steaming — sailing 25-knot vessels at 20 to 22 knots — became standard practice on long Asia-Europe routes last fall as carriers sought to control costs and find gainful employment for some of the 700-plus container ships laid up around the world.

During the last three months, slow steaming has spread to trans-Pacific voyages, adding up to three days to the 11 or 12 days that most vessels required to sail from their last Asian port to their first inbound port on the U.S. West Coast. Ships also have been slowed on long intra-Asia routes and in other services.

The four-carrier CKYH alliance — Cosco, “K” Line, Yang Ming and Hanjin Shipping — announced last week it will extend slow steaming across its Asia-Europe service, using it on six loops before the first half of this year.