Will slow steaming become a non-issue?
February 01, 2011
While the Federal Maritime Commission (FMC) is moving forward with an investigation of slow steaming practices in the transpacific, some analysts question whether it will even be an issue after the upcoming Lunar New Year.
Both the National Industrial Transportation League (NITL) and the Agriculture Transportation Coalition (AgTC) have issued recent objections to the practice, noting that it offers no service advantages for shippers.
Since then, FMC Chairman Richard A. Lidinsky Jr. has taken a leading role in the inquiry. At the same time, he has given the Transpacific Stabilization Agreement (TSA) members permission to discuss slow steaming under antitrust immunity.
Given the recent crisis in Egypt, there is some chance the TSA will insist that there’s never been a better time for “slow steaming” – a strategy that not only spares the environment, but also saves on fuel costs.
Furthermore, said analysts, this may all be a moot point if imports begin to slacken on the Eastbound trade late, said Jock O’Connell, Beacon Economics’ International Trade Adviser.
“We can already see a big reduction in U.S. orders from multinationals sourcing from China,” he said. “And after the Lunar New Year, we don’t expect it to improve greatly.”
Finally, with the recent introduction of Horizon Lines and other smaller liners in the trade, shippers do have an alternative to slow steaming cartel members.
As reported in LM last week, Horizon Lines announced it had instituted a 15-day transit schedule for containerized cargo shipped from Shanghai to Kansas City with its new International service.
Amid considerable fanfare, the company launched the Five-Star Express (FSX) trans-Pacific ocean service between China and the United States in December, and selected Kansas City as a key hub for its express ocean-rail intermodal package.
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