For those who haven’t followed the situation closely, many container ships right now have practiced ‘slow steaming’ due to a glut of ships being built worldwide.
Essentially, they are sailing at speeds well below their potential in order to reduce the supply of ships in the market, and thus support shipping rates.
The way this works is that the slower a ship sails, the fewer times it can make a round trip per year. Thus purposely sailing slowly reduces the effective supply of ships. It’s a response to insufficient shipping demand relative to the size of the global container shipping fleet.
Yet these poor shipping companies have taken this practice to such an extreme that many ships are now sailing at speeds slower than old clipper ships from the 1800’s.
Mighty container ships are now steaming so slowly to save money that they take longer to cross the oceans than sailing ships of 150 years ago. A report published this autumn estimates that most container ships move more slowly on the great trading routes than the fast sailing ships of the late-19th and early-20th centuries.¬†
The clipper ship Cutty Sark, built in Scotland in 1969, carried wool from Australia to Britain in 67 days, with a top speed of 17.2 knots. She once averaged 15 knots, sailing 360 miles in a day’s run of 24 hours.
Many modern container ships can achieve 25 knots. But the report ‘Slow Steaming – A Transient Fashion or Here to Stay?’ from the research firm Dynamar, based in Almaar, Netherlands, suggests that, by mid-2010, half the world’s active container ship fleet, carrying 35 per cent of global trade by value, was steaming slower than before the economic downturn – 15 knots or less.
So there’s still a lot of slack and overcapacity in the container trade complex given that ships could simply sail at normal speeds and throw the supply/demand situation off balance.