Skip to content

Slow steaming and the supply chain

Container ship

To save money on fuel and cut back on carbon emissions, shipping companies started to promote slow steaming, emphasizing its advantages for the environment.

Slow speeds help shippers lower their carbon footprint and boost their reputation as environmentally friendly since they use less fuel and produce fewer hazardous emissions as a result.

Slower sailing speeds do result in substantial fuel savings. A 10% decrease in engine speed results in a 27% reduction in engine power and a 19% decrease in the total amount of energy required for the journey.

Shipping companies have largely adopted the 20-knot slow steaming method, and some have even resorted to 15-knot super-slow steaming. Slow steaming lowers operational costs for shipping lines since it consumes less fuel, which makes up a large portion of operating expenses. When oil prices were at their highest, gasoline might make up as much as half of the overall cost of operating a ship.

Shouldn’t shipping companies share part of these savings with shippers if they are drastically lowering their expenses per voyage? Some contend that cost-cutting measures should take precedence over environmental advantages given the current economic climate.

In fact, because shippers require more inventory to support this longer supply chain, greater transit durations may raise shippers’ costs.

Longer ocean travel periods can also affect shippers’ cash flow since they expand the distance between production and sale. This isn’t a problem for many businesses, but it might be problematic for organizations that depend on a quick cash flow process.

However, the one significant benefit that slow steaming does produce—reliability—may allow shipping line clients to leverage it to their advantage.

Ships that steam slowly has a higher chance of getting to port on time. A ship does not have time to wait if bad weather or traffic at other ports causes it to be delayed when it is sailing at maximum speed. However, if it is steaming slowly, the ship can speed up to make up for the lost time.

Supply chain reliability is more significant to many manufacturers, retailers, importers, and exporters than transit time or rates. Most business success is based on fulfilling promises made to clients, this builds customer loyalty.

To offset the higher inventory levels required for slow steaming, enhanced reliability also enables shippers to maintain less inventory in the country of destination. Because they are certain that new stock will arrive on schedule, shippers may retain less buffer stock.

Share this post:

LinkedIn
Facebook
Twitter
Pinterest
Tumblr

CONTACT US

Tel: +234 909 199 9866

sales.nigeria@amglogistics.com
+234 909 199 9866

customer.services@amglogistics.com
+234 909 199 9841

cs.abuja@amglogistics.com
+234 909 199 9805

documentation.department@amglogistics.com
+234 909 199 9813

AMG Logistics Locations

HEAD OFFICE
7c Creek Road
Apapa
Lagos

ABUJA BRANCH
B3 ground floor
84 Keane Nkrumah Street
Asokoro Business & Lifestyle centre
Abuja

PORT HARCOURT BRANCH
NAMA Admin Building
Port Harcourt International Airport
Omagwa
River State

LET US CONTACT YOU

CONTACT US NOW