Category Archives: Microeconomics

Micro posts and comments

Benefits of slow steaming exaggerated?

Studies by Simpson, Spence and Young, a leading global shipbroking firm, seem to indicate that emission benefits of slow-steaming have been exaggerated.

One reason offered is that the ‘cubic law’, which says that fuel consumption rises as the cube of ship speed, is erroneous for many vessels, and is only approximately true at the designed speed of the ship.

Another problem is that slow-steaming effectively reduces capacity, requiring more ships to cover a route with a regular schedule, for instance. Those extra ships produce more emissions even though the per-ship emissions might be smaller.

Capacity is not a problem at present. There’s not enough cargo. But scheduled service may suffer.

There are a lot of moving parts in considering emissions release.

The best way to attack the problem may be to get to zero or low-emission ships as quickly as possible. But in the short run, these considerations in he study are worth thinking about.

By Charlie Bartlett, technology editor 15/05/2023

Benefits of slow-steaming on emissions exaggerated, studies find – The Loadstar
Advertisement

Alliances schedule 75 blankings for Q3

We continue to see a lot of blanked voyages. Demand must not be shaping up to be very good after all, and prices just won’t stay up. What else would you expect if you make your customers guess about the inventory they have to carry. Once they have bitten that bullet, it will be hard to get them back into a non-competitive shipping mood.

By Mike Wackett 03/06/2020

Alliances schedule 75 blankings for Q3, as hopes of peak season demand fade – The Loadstar
Quote

Blanking voyages masks real impact of Covid

Spot rates for container shipping are staying up, but only because ocean carriers continue to blank voyages big time.

If you were shipping and you feared your voyage would be blanked, what would you do?  You would be prepared to buy some shipping at spot, to be sure you can get on the ship.   Your ratio of long-term (and possibly delayed) contracting for shipments and your short-term purchases would change in favor of the short term.  And that would keep short term demand up in spite of a long-term need going down.  That’s what’s happening now.

With COVID-19 out there, and no certainty about international trade, it seems certain that conditions are much worse than are being reported based on shipments. At some point the other shoe will drop, and all prices will go down.  We need not to trust the BIMCO spot prices for future predictions right now.

logo

By    

via Blanking voyages holds ocean rates steady, but masks the real impact of Covid – The Loadstar