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Hapag-Lloyd

Shipping lines could save millions of dollars in fuel costs if time spent in ports was decreased by even the most marginal amounts, claims new analysis from container shipping consultancy SeaIntel.

The company, in conjunction with industry group the Global Institute of Logistics and software provider Cirrus Group, set out to discover what the effects would be on a scheduled liner service if the time it took for a port to berth a vessel was incrementally reduced. The study focused on time savings that could be made through the optimisation of the berthing process, from the point a ship arrives, on time, at its station.

The results are nothing less than startling. By reducing the berthing time of a vessel in and out of ports, an extra lag is created in the liner’s schedule which the shipping line can use to slow down the vessel en route to its next port of call by the equivalent amount of time saved in the previous port.

“If the berthing process is systematically reduced in a given port, this will allow vessel operators to slow their vessels down slightly, and still be able to berth in a timely fashion. Of course, this is only possible if the process improvement is a genuine time saving, and hence the port changes the time set aside for the berthing process,” the paper says.

The study had to make a few assumptions, given that the possible financial savings made by carriers would be derived from subsequent fuel savings made by being able to cut vessel speeds between ports. In this case, it used the fuel consumption data for the 11,400teu CMA CGM Andromeda.

The cost of fuel consumption does not work in a linear fashion – the savings made from reducing a vessel from 18 knots to 17.9 knots are greater than reducing from 14 knots to 13.9 knots. So the savings made by shipping companies on fuel costs depend on the speeds that the ships are able to reduce from. If a port was able to reduce berthing time by two hours, which was then built into a 200-mile trip to the next port, the line would save $2,000 per port call if the vessel was steaming at 14 knots, and nearly $6,000 if it was steaming close to 19 knots.

But when this type of saving is multiplied across a scheduled container liner service, where vessels of identical size would be calling at the same port on a weekly basis and steaming at the same speeds, SeaIntel calculates that a 11,400teu vessel would see annual savings of between $150,000-$300,000, depending on the currently scheduled speeds, at that one port – although there appears to be something of a ceiling on savings, depending on the distances from the previous port in the string.

“We find that savings tangentially reach a maximum level after a certain distance. However, that distance depends on the time saving obtained in the port. Generally we find that more than 90% of the savings are obtained with a port-to-port distance below 500-600 miles,” it said.

Nonetheless, if berthing time reductions can be achieved across a string of ports on a particular service, the savings can be magnified. A typical Asia-Europe service calls at eight to 12 ports. If five of those ports can reduce berthing times by half an hour, the study concluded that almost $10m can be saved annually from reduced fuel consumption on the trade as a whole. If those five ports can reduce berthing times by three hours, the annual savings on the trade would jump to $40m.

The next step was to extrapolate that calculation out to the global liner industry, with the result that if five ports per string were to reduce berthing times by three hours the industry would stand to save $180m by improved optimisation of slow-steaming techniques.

Clearly, the actual savings remain hypothetical – sailing speeds vary according to a variety of factors; fuel consumption depends on the ratio of laden and empty containers; port productivity can vary wildly and so on – but the potential benefits to the liner shipping through even marginally improved, but consistent, berthing efficiencies are huge, and would give ports an important competitive tool.

“A port which improves berthing times by a few hours can easily argue that instead of offering a carrier a reduced handling charge, the carrier is getting the value straight from the bunker fuel savings,” it concluded.

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