Challenges Facing the World’s Cargo Fleet

MT Hellespont Alhambra

How bad is it for the shipping industry?

The high oil price of recent years has been an additional pain. Container shipping companies saw their profits of around $7 billion in 2010 turn to losses of about $5 billion last year. One response to the high cost of fuel and the abundance of ships has been to adopt "slow steaming" which means cutting speeds from around 20 knots to around 17 knots to save fuel. Extra vessels are added to the "string"so that the same level of service can be provided. The glut of ships means that they can be chartered cheaply: some daily rates have slumped more than 90%.

As the crisis worsened some lines have even opted for "super slow" steaming, which means 15 knots or less. Alas, this has turned out to bring its own problems as time goes by. Consistently sailing so slowly is damaging the giant engines designed to be operated at a higher rate. "It’s a bit like driving your car uphill in top gear," says one shipping executive. "It might keep going but it adds to wear on the bearings." But relief is on the horizon: oil companies such as Shell are rushing to bring to market better lubricating oils that reduce wear and work equally well in all climates.