Slow steaming from the shippers’ perspective

Paper in proceeding, 2015

Trans-ocean liner shipping companies adopt slow steaming during periods when the market is characterized by low demand, high fuel prices, low freight rates and over capacity. The latest instance this has occurred is in the period following the 2008/2009 global financial crises and the speeds have not yet rebound to the pre-crisis levels. Most of the existing research regarding slow steaming is from environmental, economical and maritime engineering perspective, meaning that the phenomenon is studied from the ship owners’ perspective. The purpose of this paper is to explore the effects of slow steaming from the shippers’ perspective. A structural literature review on the main subject has been performed and the same resulted in a matrix of different effects of slow steaming on the shippers already identified and studied in the existing literature. Furthermore, six global companies positioned in Sweden have been studied and the data from the case companies has been collected through face-to-face interviews. The findings of the interviews have been summarized, presented and discussed at a workshop with all case companies’ representatives. The results of the study show that the shippers were firstly affected by slow steaming in 2008 and 2009 simply through increased sailing times that affected their supply chains. Reliability has been regarded as more important than the sailing time itself but the improvement on the same has not been observed so far. Furthermore, the interviewees believe that if the sea transport option is unreliable, air and rail are considered as substitute supply chains and the same also affects the last mile mode choice. Remarkably only one shipper acknowledged the importance and existence of environmental benefits; however increased reliability or cost reduction, as the benefits, have not been recognized by the interviewees.