Swedish shippers\u2019 strategies for coping with slow-steaming in deep sea container shipping

Christian Finnsgård,Johan Woxenius,Joakim Kalantari,Violeta Roso,Zeeshan Raza

doi:10.1186/s41072-018-0033-2

Abstract

When container shipping lines experience over-capacity and high fuel costs, they typically respond by decreasing sailing speeds and, consequently, increasing transport time. Most of the literature on this phenomenon, often referred to as slow-steaming, takes the perspective of the shipping lines addressing technical, operational and financial effects, or a society perspective focusing on lower emissions and energy use. Few studies investigate the effects on the demand side of the market for container liner shipping. Hence, the aim of this study is to elaborate on the logistics consequences of slow-steaming, particularly the strategies that Swedish shippers purchasing deep sea container transport services employ to mitigate the effects of slow-steaming. Workshops and semi-structured interviews revealed that shippers felt they had little or no impact on sailing schedules and were more or less subject to container shipping lines’ decisions. The effects of slow-steaming were obviously most severe for firms with complex supply chains, where intermediate products are sent back and forth between production stages on different continents. The shippers developed a set of strategies to cope with the low punctuality of containerised shipping, and these were categorised in the domains of transfer-the-problem, transport, sourcing and distribution, logistics and manufacturing, and product design. All firms applied changes in the transport domain, although the lack of service segmentation limited the effects of the strategy. Most measures were applied by two firms, whereas only one firm changed the product design.

Highlights

Shipping lines have reduced sailing speeds to mitigate the effects of over-capacity and, until recently, high fuel costs since the financial crisis started in 2008
The effects on supply chains using container liner shipping is far more complex; this study takes the perspective of the shippers
The purpose is to briefly elaborate on the logistics consequences of slow-steaming, categorise principle mitigation strategies, and investigate and categorise the strategies Swedish shippers purchasing deep sea container transport services use to cope with the effects of slowsteaming

Summary

Introduction

Shipping lines have reduced sailing speeds to mitigate the effects of over-capacity and, until recently, high fuel costs since the financial crisis started in 2008. Slow-steaming is a rather straightforward issue in the tank and bulk segments, where the shipowner often negotiates terms directly with one or a few shippers. The shipping lines face a vast array of shippers with different preferences for speed and costs; in addition, routes often include multiple port calls, and the ships are engaged in tight and complex itineraries. The effects on supply chains using container liner shipping is far more complex; this study takes the perspective of the shippers. The purpose is to briefly elaborate on the logistics consequences of slow-steaming, categorise principle mitigation strategies, and investigate and categorise the strategies Swedish shippers purchasing deep sea container transport services use to cope with the effects of slowsteaming

Objectives

Findings

Conclusion