Skip to main content

Table 3 Impact of slow steaming on countries based on the eight criteria

From: Assessing the macroeconomic and social impacts of slow steaming in shipping: a literature review on small island developing states and least developed countries

Eight criteria

Impact of slow steaming on LDCs and SIDS

Geographic remoteness of and connectivity to main markets

Increased 'pipeline inventory' and overall transport costs for areas distant to main markets due to their geographical distance, but also their position in global shipping networks

Increased export costs and reduced competitiveness of foreign trade for longer transport distances and disproportionate impact distribution for countries distant to the main markets

Impact on inter-port competition focusing on the major shipping services and leading to the offer of differentiated shipping services, combining fast and direct services among main hubs and cheaper and slower services calling on small ports

Cargo value and type

The impact depends on various factors such as shipping segment, geographic market, modal competition and the design of the service, and can vary from minor to significant

Potential significant implication for shipping customers, particularly those shipping perishable goods such as food

Will also vary depending on the commodity type and on whether this cost reduction can be passed-through to the producers or other actors of the supply chain

The risk of increased transit times to the quality of perishable goods, especially for SIDS and LDCs in terms of connectivity issues, as well as the reliability of transport and logistics services and impact on cargo value

Transport dependency

The SIDS region’s transport issues are unique—small and vulnerable economies, long distances, and old ships of poor standard, entirely fossil fuel dependent and minute contribution to global emissions

If the speed of ships was reduced at constant freight rates, then more cargo would be shifted to the land-route for short distance shipping routes

Slow steaming may encourage some cargoes to shift to other, faster modes of transport, including road, rail or air, which can lead to more air emissions to the environment

Freight rates across routes can vary due to specific characteristics of the routes in terms of fuel cost, amount of transshipment, trade volume, connectivity, and port infrastructure. Major routes have an advantage in terms of fuel cost, not only due to maritime distance, but also because of the deployment of the most efficient vessels on these routes. The amount of transshipment also affects the freight rates that tend to be higher for routes with low trade volume

Transport cost

Important benefits in reducing fuel consumption and, therefore, fuel costs and harmful emissions

Shipping companies should reduce sailing speed under conditions of high fuel prices, low compensation costs required to be paid to customers for late deliveries, and when there were few cargoes onboard the vessels

The impact of slow steaming on cost is undeniable, but supply chain lead times become longer and alternative supply sourcing options need to be examined (e.g. near-shoring or on-shoring)

Even though speed reduction has reduced short-term operating costs for ship operators, shippers have not benefited from slow steaming to the same extent as carriers have not passed on savings from reduced shipping costs via lower freight rates

Slow-steaming is the most cost-effective measure of reducing fuel consumption and air emissions, but shippers will have their individual perspectives on the practice, which may vary with type and volume of the cargo, as well as the availability of credit facilities

An overall more profitable option for the operators depending on the additional costs of deploying the extra vessels. For the charterers, speed reduction relates to increased in-transit inventory costs that are proportional to the value of the cargo

Food security

Slow-steaming having a potential negative impact on food prices and food security

May have significant implications for the shipping customers of perishable goods such as food

People with low incomes would be particularly vulnerable to an increase in food costs deriving from transport cost and may thus affect food security

Necessary to include the cost of time into the transportation costs, and thus unto the cost of imported or exported food. Time increases the sailing costs for crew and auxiliary power, amount of refrigeration costs, and in the case in which it affects the type of cargo that can be transported, the price and revenue of the cargo

Disaster response

SIDS are heavily dependent on marine transportation and consist small and vulnerable economies that face common economic and development challenges due to geographical remoteness, the higher shipping costs associated with the low connectivity to main markets, the need for transhipment, and the transport dependency particularly during emergencies

Socio-economic progress and development

Most SIDS are particularly dependent on their foreign trade and suffer from a strong exposure to external variations, including global or regional financial and economic crises. Both economic and environmental risks have significant bearings on their transport systems in terms of reliability, costly operation and connectivity issues

Pacific islands due to their specific characteristics, such as severe dependency on fossil fuel, long routes, minute economies, imbalance in import and export, financial barriers, and high infrastructure cost, face greater challenges in achieving long-term sustainable shipping