Subscribe to our free, weekly email newsletter!


Shippers question value of slow steaming

“This was particularly true on the transpacific, where carriers engage in a collective assessment of the rate structure,” said Peter Gatti, executive vice president of the National Industrial Transportation League (NITL).
By Patrick Burnson, Executive Editor
April 27, 2011

Responding to a request for comments from the Federal Maritime Commission on the effect of slow steaming on U.S. ocean liner commerce, most shippers found little or no rate or service benefit.

“This was particularly true on the transpacific, where carriers engage in a collective assessment of the rate structure,” said Peter Gatti, executive vice president of the National Industrial Transportation League (NITL). “We, of course, agree that there are environmental advantages to slow steaming, but shippers were also counting on a pricing break from the carriers comprising the Transpacific Stablilization Agreement (TSA) and that hasn’t happened.”

Indeed, added Gatti, one non-conference carrier operating a dedicated shuttle from Shanghai to Long Beach has been operating at normal knot-speed and delivering goods at a competitive price point.

“So from a money-saving perspective, slow steaming’s advantages are negligible,” added Gatti.

Spokesmen for the World Shipping Council, told LM that while its members comments were largely in support of continued slow steaming, the issue was largely confined to the transpacific lanes.

“To my knowledge, we don’t face this problem anywhere else in the marketplace,” said WSC spokesman, Anne Kappel. “Besides, the FMC does not have the enforcement powers to regulate any trade lane based on request for comments.”

According to the NITL, supply chains have suffered negative impacts as a result of slow steaming. Shippers said that transit times have risen, effective vessel capacity has dropped, shortages in containers and equipment have been exacerbated, and meeing customer expectations is more difficult.

“One of the key aspects of the supply chain is that transit times affects inventory,” said the NITL. “Initially, slow steaming accelerated the depletion of inventory making it harder for shippers to fill their store shelves and manufacturers’ production lines in a timely manner.”

Over time, however, shippers have been forced to adjust to lengthened voyage times by increasing the amount of inventory they carry, at higher costs, the NTIL added.

“Goods that sit in inventory are simply not producing real economic output or providing any societal benefit,” the NITL concluded.

For related articles click here.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

As of July 1, only containers with a verified gross mass will be cleared to be loaded onto a ship under the International Maritime Organization’s Safety of Life at Sea (SOLAS) Verified Gross Mass (VGM) amendment. Shippers hoping that the implementation of the ruling will be delayed or deferred are whistling in the dark, say industry analysts.

Amid the many worrisome economic indicators kicking around of late, something along the lines of good news came about this week in the form of United States new home sales data, issued by the United States Department of Commerce this week.

In March, the SCI came in at 0.4, which FTR described as “a near neutral reading” on the heels of four months of more favorable market trends for shippers.

The $4.8 billion acquisition of Netherlands-based TNT Express-NV, a provider of mail and courier services and the fourth largest global parcel operator, by transportation and logistics services provider FedEx was made official today.

less than one percent of all U.S. businesses export, and of those that do, the majority interacts only with NAFTA trading partners Mexico and Canada.

Article Topics

News · Ocean Freight · Ocean Cargo · World Trade · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA