The encyclopedia · Strategy & Leadership · Operational decision · 2008–2010
Maersk Line cut fuel costs in 2008 by slowing ships, trading transit days for bunker.
When bunker fuel hit half of operating costs, Maersk slowed its container ships, cutting fuel and CO2 while absorbing excess capacity.
Maersk Line
the move
By 2008 bunker fuel had climbed from about 20% to roughly 50% of a container line's operating cost, and a big ship burns a huge amount of it every day it sails fast.
Maersk Line chose to run its long routes slower instead of fast. Jesper Praestensgaard, CEO Asia Pacific of AP Moller-Maersk, said the line could still deliver a reliable product at lower speed while cutting bunker burn and CO2.
On a Shanghai–Rotterdam string, regular steaming with eight vessels at 22 knots would consume 9,500 tonnes of bunker and emit 30,000 tonnes of CO2; slow steaming with nine vessels at 20 knots consumed 8,000 tonnes and emitted 25,000 tonnes.
The slower schedules also absorbed idle tonnage and cut effective industry capacity, a second quiet benefit as freight rates slumped in the recession.
why it works
- Speed is the single biggest driver of a ship's daily fuel burn
- A slower network needs extra ships, which soaks up surplus capacity
- Customers tolerated longer transit because reliability beat speed
what transfers
When the bill is energy and capacity is plentiful, the lever is time: slowing the flow cuts the per-unit cost, but only if you rebuild the schedule and tell customers the trade-off.
what came after
Slow steaming spread across container shipping; average big-ship speeds fell about 22% between 2007 and 2015 to roughly 16 knots, per the Financial Times, and by 2019 the practice was so standard the IMO debated mandating it. It remained a fixture even after rates recovered.
references
- Maersk repeats its backing for slow steaming
- Threat of IMO to Mandate Slow Steaming Gets No Traction – for Now
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