Koreas big two reduce speed

South Korea’s two largest box carriers, Hanjin Shipping Co. Ltd and Hyundai Merchant Marine Co., Ltd, will reduce the speed of some of their vessels to cut down on bunker consumption. The two shipping giants are feeling the pinch of escalating bunker fuel prices that have contributed to higher operating expenses on major trade routes.

Hanjin deploys eight to nine vessels on its flagship Asia-Europe service, the Far East Express (FX), while Hyundai operates the same number of vessels on the Asia Europe Express (AEX) service. The vessels on these routes will sail at slower speeds to burn less bunker fuel.

Shipping lines have worked out it is possible to save as much as $10 million per round-trip voyage on the Asia-Europe route by adding an extra vessel and travelling at slower speeds. Bunker bills can easily amount to 50-60% of total ship operating expenses, going by the rise in fuel costs.

The price of key grade Singapore 380-centistoke (cst) product, for instance, has surged 87% from a monthly average of $383.50 per metric tonne (pmt) in July 2007 to $720.50 pmt in July 2008, according to Bunkerworld data.

Apart from cost savings, shipping lines also see slow steaming as a way to reduce carbon dioxide (CO2) emissions. Jesper Praestensgaard, CEO Asia Pacific of AP Moller-Maersk, gave an example of a round trip on the Asia-Europe string from Shanghai to Rotterdam, citing reduction in CO2 emissions of 5,000 tonnes in slow steaming compared to regular steaming.