Written by: Theotime Casset
Edited by: Louis Chenot
During the 2008 financial crisis, crude oil prices rose to an all time high of $140 per barrel. Since oil is the biggest single factor cost for commercial shipping, the industry sought to reduce its oil consumption. The combination of high oil prices and decreased global demand for goods created the ideal conditions to implement "Slow Steaming" (Wiesmann, 2010). This consists of lowering the cruising speed of merchant ships by about 5 knots (~6 mph) in order to reduce oil consumption. In 2008, the reasons that motivated its implementation were purely economical but since it reduces oil consumption, it also reduces greenhouse gas emissions (GHG), making it a valid environmental policy. Since clean alternatives to oil are decades away from widespread adoption, slow steaming could be a good way to reduce emissions in a highly polluting industry for the time being. But is it even viable?
Its main benefits come from the fact that the relationship between sailing speed and oil consumption is not linear. Oil consumption grows at an exponential rate with regards to speed such that reducing the sailing speed by about 19% would lead to a 58% decrease in oil consumption (Wiesmann, 2010; Debatin, 2022). Therefore, by marginally reducing the ship's cruising speed, the operator could significantly reduce operating costs, and at the same time, GHG emissions. In order to ensure a continuous stream of goods to ports however, additional ships would need to be added to commercial fleets. But even with the addition of more ships to the global fleet, net income for shipowners would still increase, and GHG emissions would drop (Wiesmann, 2010). Another benefit is the reduced risk of whale strikes. At high speeds, the collision between a whale and a merchant ship is often deadly. Lowering sailing speeds would reduce the occurrence of strikes and the strength of the impact (Large Whales and Vessel Strikes - Marine Mammal Commission, 2024).
Slow steaming could be realistically implemented through a process called "Virtual Arrival". Unlike the damaging "Sail Fast, Then Wait" whereby ships sail at high speeds to their destination, and then wait in anchorage for a free berth. Ships would adjust their sailing speed to get to their destination "just in time." Virtual Arrival would allow for a 20% reduction in GHG emissions (The Contractual Architecture of the “Blue Visby Solution” - Shipping and Trade Law, n.d.). This system would allow for a reduction of emissions while limiting the potential of disruptions to the market. However, this method faces significant legal hurdles. Virtual Arrival would require ships to voluntarily slow down, which directly contradicts the obligation of "utmost despatch" under Common Law. This obligation, standard in most maritime trade contracts, states that ships need to complete their trips as fast as possible (Bennet et al., 2018). A simple change to the contract would solve this issue. However, due to the large number of actors involved in shipping contracts, getting all parties involved (all the way down the supply chain) to collaborate and alter their contracts is extremely challenging. If all those involved haven’t agreed to the change in the contract, and a delivery happens to be late, the charterer could be held liable for the damage. This makes systems like Virtual Arrival difficult to implement, despite their obvious upsides for all.
Slow Steaming is a necessary solution to reach the International Maritime Organization's goal to reduce emissions by 50% by 2050. It would significantly reduce the emissions of maritime trade without impacting the global market strongly. However, its implementation faces significant hurdles due to the large number of actors involved in trading contracts. In the future, systems such as the EU's Emission Trading System (cap and trade), could make it very costly for companies to not reduce their GHG emissions, encouraging them to collaborate and implement slow steaming, making it an inevitability.
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References: Large Whales and Vessel Strikes—Marine Mammal Commission. (2024, April 26).
Bennet, D., Rourke, A., Coates, E., & Kelk, H. D. (2018). The Obligation To Proceed With Utmost Despatch—Shoring Up Early Principles. https://www.mondaq.com/uk/marine-shipping/753480/the-obligation-to-proceed-with-utmost-despatch-shoring-up-early-principles
The contractual architecture of the “Blue Visby Solution”—Shipping and Trade Law. (n.d.). Retrieved November 26, 2024, from https://www.shippingandtradelaw.com/practice-and-policy/regulation/the-contractual-architecture-of-the-blue-visby-solution-151783.htm
Debatin, M. F. (n.d.). Why Slow-Steaming is not a Zero-Sum Game.
https://cms.globalmaritimeforum.org/wp-content/uploads/2022/09/Debatin-Maximilian-20 21.-Why-Slow-Steaming-is-not-a-Zero-Sum-Game-draft-working-paper.pdf
Slow steaming - a viable long term option ? (2010, February)
https://www.wartsila.com/docs/default-source/Service-catalogue-files/Engine-Services— 2-stroke/slow-steaming-a-viable-long-term-option.pdf