Effect of a speed reduction of containerships in response to higher energy costs in Sulphur Emission Control Areas

Abstract

The objective of this paper is to explore the possible consequences of the future low-sulphur fuel requirements in Sulphur Emission Control Areas (SECA) on vessel speed, from the standpoint of the container shipping industry. Rational energy use, speed reduction, and revenues are closely related in the container shipping sector because speed reductions may provide substantial energy and cost savings. The operators could consider reducing their speed in SECA in order to save on fuel that will become relatively expensive. However, to maintain a weekly frequency without adding new ships, such a behaviour implies that the required speed at sea outside the SECA area increases. This paper aims to investigate if such a difference in speed is cost-effective, and if the increase in speed outside SECA may result in an increase in CO2 emissions of the total cycle. We propose a cost model that estimates the cost-minimising combination of speeds inside and outside SECA, and the resulting CO2 emissions of the liner service. Applying this model to representative liner services serving North Europe, we find that differentiating speed accordingly slightly decreases total costs and increases CO2 emissions in a similar way. The results are sensitive to the price of low-sulphur fuels, the part of the cycle in SECA and the number of ships deployed in the service.