The studies on technical validity and quantification of the impact of slow steaming on the ships’ fuel consumption and emissions thoroughly establish the environmental merits of slow steaming. From the carriers’ perspective, the decision to adopt slow steaming is littered with trade-offs to consider. On the one hand the reduced fuel consumption resulting from slow steaming could be significant even when speed is only reduced marginally. The importance of this factor is naturally only heightened in instances of high fuel prices however slower sailing results in fewer voyages per year which essentially reduces the utilization rate of the vessel and that incurs thus costs in the form of need for more ships and crews for producing the same output as before. From the shippers’ perspective, the increased lead time that results from slow steaming is potentially highly problematic. The first issue that comes up is the increase in inventory levels that are driven by lead time such as pipeline inventory and to a lesser extent, safety stock. Regardless of the impact of slow steaming on service reliability, there are few studies that have empirically tried to evaluate how the shippers value the trade-off between speed and reliability. The purpose of this study is to explore and explain the shippers’ ability to demand, and manage the consequences of, slow steaming maritime transport services in their supply chains.
Chalmers, SSPA, University of Gothenburg