Slow Steaming Practices in the Global Shipping Industry

Results of a survey conducted by MAN PrimeServ in late 2011 among representatives of the global container, bulk and tanker shipping industry

Copyright 2012 MAN PrimeServ All rights reserved

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Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Main trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Implementation of slow steaming all respondents . . . . . . . . . . . . . . . . . . . 5 Engine loads down to between 30 and 50 per cent . . . . . . . . . . . . . . . . . . . 5 Most combine slow steaming with full-load steaming . . . . . . . . . . . . . . . . . . 5 Fuel savings are the overriding reason for slow steaming . . . . . . . . . . . . . . . 5 Fuel savings are most important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Utilisation of capacity and avoiding idling costs are also important . . . . . . 6 Almost all retrofits achieved expected fuel savings or more . . . . . . . . . . . . . 6 Customers are generally positive towards slow steaming . . . . . . . . . . . . . . . 7 Slow steaming affects shipping rates in many cases . . . . . . . . . . . . . . . . . . 7 Slow steaming helps environmental compliance . . . . . . . . . . . . . . . . . . . . . . 8 Retrofits help meet environmental challenges . . . . . . . . . . . . . . . . . . . . . . . . 8 Fouling of the exhaust gas boiler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Soot deposits on moving parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Executive Summary In late 2011, MAN Diesel & Turbo conducted a web survey among more than 200 representatives of the global container and bulk shipping industry. Of these, 149 had implemented slow steaming.
The purpose of the survey was to investigate the approach of container lines as well as bulk and tanker operators to slow steaming, the retrofit, derating and upgrade measures taken to maximise the return on slow steaming, and evaluation of the results of these measures . Respondents were asked to answer 25 multiple-choice questions and to attach free text comments where relevant . The following results are based on the answers and comments from the respondents who had already implemented slow steaming . These were again split into two groups: 1 . 38 respondents who had already implemented one or more engine retrofit solutions such as slide fuel valves, turbocharger cut-out, engine derating or propeller upgrade . 2 . 111 who had either not implemented any of the above, but had implemented other solutions such as hull cleaning . In addition to fuel savings, the opportunity for better utilisation of existing fleet capacity also played a significant role in the decision to adopt slow steaming . Main trends The survey indicates a clear difference in attitude to slow steaming among those who had implemented engine retrofit solutions and those who had not . The results obtained from engine retrofit solutions had encouraged a significantly more positive understanding of the efficiency increases and savings that can be obtained by taking steps to maximise the return on slow steaming . The overwhelming reason for adopting slow steaming was the promise of fuel savings . The survey revealed that engine retrofit, derating and propeller upgrade measures delivered fuel savings either as expected or higher than expected . In addition, the survey documented a positive reaction to slow steaming by a large majority of the global shipping community .

Implementation of slow steaming all respondents

Almost one third of container fleet respondents (32 .1 per cent) stated that they were employing slow steaming in 50 per cent or less of their fleet . 15 .4 percent reported that slow steaming was employed in more than 50 per cent of their container fleet . A significant number of respondents, however, were not able to answer this question specifically .

Engine loads down to between 30 and 50 per cent

A minority of respondents reported very low engine loads below 30 per cent, while more stated engine loads between 20 and 40 per cent . A significant majority reported engine loads between 30 and 50 per cent, indicating that super slow steaming was not a priority . This was particularly evident in bulk/tank vessels .
10-30% 20-40% 30-50%

Fuel savings are the overriding reason for slow steaming

The obvious reason for introducing slow steaming is to save fuel . When fuel prices soared, the technical experts of one of the worlds biggest shipping companies set about solving the problem . Slowing down was the solution they came up with . By 2009, significant fuel savings resulting from sailing at 12 knots instead of 24 saw slow steaming become the standard operating procedure in their fleet . Meanwhile, it has become the standard in several other shipping companies . Fuel savings are most important The survey shows that fuel cost savings are by far the most important reason for

The corresponding figures for bulk vessels, tankers, etc . were significantly higher with more than half (54 .4 per cent) indicating that they were using slow steaming in 50 per cent or less of their bulk/tanker vessels, and 26 .2 per cent stating that they were using slow steaming in more than half of these vessels . Here, the number unable to answer was also considerably lower (below 20 per cent) . The following figures are thus based on answers from 149 respondents employing slow steaming .

Container Bulk/Tank/others

17 .8 5 .9

25 .8 11 .9

56 .4 82 .2

Table 1: Typical engine load in slow steaming vessels (percentages)

Most combine slow steaming with full-load steaming

A majority of respondents combined slow steaming with full-load steaming with only 6 per cent employing slow steaming alone . This reflects a broad need for flexibility, indicating major interest in the possibility of turbocharger cut-out or modification solutions .
All the time Some of the time Hardly at all Never 21 .5 60 .4 12 .1 6 .0

introducing slow steaming . The table below splits respondents into two segments, Considerers who have not yet implemented engine retrofit, derating or propeller upgrade solutions, and Implementers who have already implemented at least one of these .

Main advantages of slow steaming Fuel cost savings Greater utilisation of existing capacity Avoidance of idling costs Schedule reliability Service and maintenance savings (e .g . longer TBO) Lower emissions

93 .7 22 .5 29 .7 10 .0 17 .1 36 .0

94 .7 34 .2 28 .9 15 .8 18 .4 42 .1

Table 2: Combination of slow steaming and fullload steaming (percentages)

Table 3: Main advantages of slow steaming as perceived by Considerers and Implementers (percentages). Respondents were able to provide more than one answer
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Implementers

Considerers

Fuel cost savings rank as the overriding reason more or less equally between the two segments . This is hardly surprising in the light of their expectations regarding bunker costs over the next two years . Here, more than three out of four of those considering engine retrofits believe that bunker costs will be higher than at present with just under three out of four who have implemented engine retrofit solutions concurring .

Several customers also note that a reduction in fuel consumption automatically means a drop in emissions of CO2 . This advantage is obviously a secondary benefit, but is still rated as the second-most important reason for slow steaming .

expected savings, while about 9 per cent were not able to answer specifically . The gains are even more pronounced when it comes to engine derating and/or propeller upgrades with 87 .5 per cent reporting expected fuel savings and none less than expected . Here, 12 .5% were not able to

Almost all retrofits achieved expected fuel savings or more

While slow steaming in itself obviously saves fuel and reduces emissions, it is interesting to see to which extent extra gains can be achieved . The supplier business case for investing in solutions such as engine retrofitting, engine derating and propeller upgrades appears to hold water in the vast majority of cases .

provide a specific answer . These results confirm the conviction of nearly one in three of those who have already implemented engine retrofits solutions of the benefits of fitting slide fuel valves in older vessels . Those still considering implementing engine retrofit solutions are less aware of the benefits of slide fuel valves .

Bunker cost trends No major change compared with today Higher than today Much higher than today

14 .4 76 .6 9 .0

18 .4 73 .7 7 .9

Implementers

Considerers

Higher than expected

Lower than expected

Table 4: Bunker cost expectations over the next two years (percentages)

Engine Upgrade Measures Installation of slide fuel valves to prevent deposits Turbocharger cut-out solutions for increased flexibility Cylinder oil system optimisation to save lubricating oil and avoid the risk of scavenge fires

Utilisation of capacity and avoiding idling costs are also important Again, half as many of Implementers consider greater utilisation of existing capacity an important reason . A reason for this could well be that these respondents have realised that slow steaming is an effective way of achieving greater utilisation of capacity . A significant number considers avoidance of idling costs to be an important driver, while schedule reliability is not high on the list . This is reflected later on in this report in connection with customer perceptions (see Table 7) .
Fuel savings Engine retrofit incl . slide fuel valves and T/C cut-out Derating & propeller upgrade

As expected

44 .1 18 .9

62 .1 10 .8

70 .3 87 .5

5 .4 0

16 .2 0

23 .4

16 .2

Table 5: Fuel savings achieved using specific solutions (percentages)

Table 6: Number of respondents currently considering engine upgrade kits to further increase reliability and savings from slow steaming (percentages). Respondents were able to give more than one answer

Three quarters of respondents reported that they had achieved fuel savings as expected by implementing slide fuel valve and/or turbocharger cut-out solutions . Only 16 .2 per cent achieved lower than

Another potential source of savings that is related to slow steaming is the opportunity to save expensive lubricating oil by adapting dosage to the engine load . Here, slightly more than one in five Considerers

Implementers

Considerers

ously considering cylinder oil optimisation as a means of saving costs and optimising cylinder lubrication for low-load operation .
Customer reactions Positive, without reservation

Implementers 32 .4 29 .7 10 .8 8 .1 2 .7 0 13 .5

and only one in six Implementers are seriConsiderers

A small minority of customers seem to be looking for a share of the financial savings offered by slow steaming, while none are worried about the impact late delivery may have on sensitive or perishable cargo .

18 .0 35 .1 15 .3 5 .4 3 .6 0 22 .5

Customers are generally positive towards slow steaming

On the face of it, slow steaming presents a challenge to customer logistics in that delivery from a manufacturing plant in Asia to a distribution chain in Europe can take four or five days longer . Also the financial benefits of slow steaming mainly lie in fuel savings, which are to the advantage of the shipping line or charterer . In fact, customer perception of slow steaming is mainly positive with 68 .4 per cent of slow steamers considering the implementation of engine retrofits stating that their customers have reacted positively . The situation is even more pronounced among those who have implemented engine retrofit solutions with nearly 73 per cent reporting a positive reaction .

Positive, as long as schedule reliability is not impacted Positive, as long as it means lower rates Indifferent, as long as schedule reliability is not impacted Negative because of destination logistics planning Negative because of sensitive or perishable cargo Do not know

Slow steaming affects shipping rates in many cases

The effect of slow steaming experienced by shipping lines on shipping rates is somewhat larger than indicated in Table 6 . Slightly over half of the respondents who have implemented engine retrofits indicate that slow steaming has affected their shipping rates significantly or to some extent . Just under half of those considering engine retrofits share this view . In both cases, however, the number believing that slow steaming has had a significant impact on shipping rates is lower than that believing it has to some extent .

Table 7: Customer reactions to slow steaming (percentages)

Obviously, schedule reliability is important to customers . The figures suggest, however, that they have faith in the planning capabilities of shipping lines and charterers to

Installation of a Turbocharger cut-out with swing gate on a 12K98MC-C

Effect on shipping rates Yes, significantly Yes, to some extent No, not at all Do not know

15 .3 32 .4 24 .3 27 .9

Considerers

ensure that their cargos arrive on time .

21 .6 34 .2 21 .6 24 .3

Table 8: Effect of slow steaming on shipping rates (percentages)

Interestingly, however, just over one in four of those considering engine retrofits say that slow steaming has had no effect at all on shipping rates . Slightly fewer than one in four of those who have implemented engine retrofits concur .
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Implementers

Slow steaming helps environmental compliance

Depending on vessel type and operational pattern, substantial fuel savings can be obtained alone by reducing speed . The fuel savings directly make a huge impact on emissions, making slow steaming a major contributor to compliance with environmental regulations . Table 3 showed that half as many respondents who saw fuel savings as the main reason for adopting slow steaming also cited emissions . Fleets are doing a lot to limit emissions, but the connection here is most likely that of lower emissions being a natural consequence of slow steaming . This is probably also what lies behind Table 9 in which nearly four out of five of those

who have implemented engine retrofits believe that these make a substantial contribution to compliance with environmental regulations .
Contribution to environmental compliance Yes Maybe No Do not know All slow steamers 48 .3 30 .2 16 .1 5 .4

Considerers and Implementers is most likely due to lower fuel consumption and not a result of experience . There are, however, some interesting divergences when it comes to environmental regulations and how best to address these .

Retrofits help meet environmental challenges

Table 10 and 11 indicate how Implementers and Considerers approach important environmental challenges that can affect their compliance with local environmental regulations .

Table 9: The contribution of slow steaming to compliance with environmental regulations (percentages)

Table 9 also shows that 78 .5 per cent of all respondents believe that slow steaming makes a significant contribution to environmental compliance . The fact that there are no significant differences between The most immediate difference between the approach of these two segments is the willingness of Implementers to invest in retrofit solutions .

How best to address the challenges > Mechanical challenges represented by slow steaming Fouling of the exhaust gas boiler Low temperature in the exhaust gas boiler affecting heat recovery efficiency Soot deposits on moving parts Premature wear and tear of vital parts Under and over-lubrication Mechanical damage arising from manual adjustment Lower engine performance and combustion efficiency Performance and combustion efficiency loss due to low-quality fuel

Proactive on-board servicing 31 .6 31 .6 47 .4 31 .6 31 .6 15 .8 23 .7 13 .2

Manual cleaning 47 .4 36 .8 36 .8 23 .7 36 .8 18 .4 26 .3 10 .5

Manual adjustments 15 .8 18 .4 18 .4 18 .4 21 .1 13 .2 15 .8 7 .9

Fuel adjustments 23 .7 15 .8 23 .7 15 .8 23 .7 7 .9 15 .8 13 .2

Enhanced engine room staff training 39 .5 31 .6 42 .1 28 .9 34 .2 13 .2 23 .7 7 .9

Engine upgrade kits 50 .0 42 .1 50 .0 34 .2 44 .7 21 .1 34 .2 15 .8

Table 10: How Implementers address important environmental challenges (percentages). Respondents were able to choose more than one solution for each challenge

How best to address the challenges > Mechanical challenges represented by slow steaming Fouling of the exhaust gas boiler Low temperature in the exhaust gas boiler affecting heat recovery efficiency Soot deposits on moving parts Premature wear and tear of vital parts Under and over-lubrication Mechanical damage arising from manual adjustment Lower engine performance and combustion efficiency Performance and combustion efficiency loss due to low-quality fuel

Proactive on-board servicing 41 .4 31 .5 34 .2 27 .0 34 .2 9 .9 25 .2 6 .3

Manual cleaning 44 .1 36 .0 36 .0 22 .5 37 .8 12 .6 23 .4 6 .3

Manual adjustments 20 .7 19 .8 18 .0 16 .2 21 .6 9 .9 9 .9 1 .8

Fuel adjustments 26 .1 25 .2 22 .5 18 .9 25 .2 9 .0 15 .3 4 .5

Enhanced engine room staff training 41 .4 36 .9 39 .6 29 .7 36 .0 13 .5 29 .7 6 .3

Engine upgrade kits 38 .7 32 .4 33 .3 24 .3 30 .6 9 .0 28 .8 8 .1

Table 11: How Considerers address important environmental challenges (percentages). Respondents were able to choose more than one solution for each challenge

The relationship between fuel savings and the environment indicated in this report may be based on a number of different parameters . Here, however, the question was where respondents invest specifically in relation to the environment and environmental compliance . The striking difference between Implementers and Considerers is the significantly higher investment of Implementers in engine-related measures .

Answers from Implementers are consistently significantly higher than those from Considerers . Two significant challenges are fouling of the exhaust gas boiler and soot deposits on moving parts . Fouling of the exhaust gas boiler Implementers differ from Considerers in their approach to fouling of the exhaust gas boiler in that only 31 .6 per cent manage this via proactive onboard servicing against 41 .4 per cent of Considerers . Half

of Implementers also point to engine upgrade kits as a response to this challenge against only 38 .7 per cent of Considerers . This might appear obvious in that it seems to reflect the fact that Considerers have not yet adopted engine retrofit or derating . However, it pinpoints an important environmental challenge for those who have not yet reaped the extra benefits from slow steaming offered by engine upgrades . The majority of Considerers are ignoring a certain way of achieving significant improvements that may be required by cer-

Implementers

Considerers 38 .7 32 .4 33 .3 24 .3 30 .6 9 .0 28 .8 8 .1

tain countries and that offer a fairly short payback time . Soot deposits on moving parts Here again, Implementers outdistance Considerers with half looking to engine upgrade kits as a means of limiting soot deposits, while only one in three Considerers thinks in the same way .

Engine upgrade kits > Mechanical challenges represented by slow steaming Fouling of the exhaust gas boiler Low temperature in the exhaust gas boiler affecting heat recovery efficiency Soot deposits on moving parts Premature wear and tear of vital parts Under and over-lubrication Mechanical damage arising from manual adjustment Lower engine performance and combustion efficiency Performance and combustion efficiency loss due to low-quality fuel
Table 12: Engine upgrade kits as a solution to environmental compliance (percentages)

50 .0 42 .1 50 .0 34 .2 44 .7 21 .1 34 .2 15 .8

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Conclusion
Slow steaming has been adopted by the worlds shipping community since 2007 with an increasing focus . The engines in the worlds fleet were built to run constantly at full load, which is typically not the optimal operational pattern now . This constitutes challenges to the operators in order to maximise the performance and competitiveness under these new market conditions . Fuel costs are the driving factor with a huge majority both of those who have not implemented engine retrofits or upgrades, and of those agreeing that it is the overriding reason for adopting slow steaming .

These measures enable more efficient consumption of fuel and lubricating oil as well as increasing engine performance, adding significant further gains to the annual savings of millions of dollars achieved by slow steaming . Lower fuel consumption also means fewer emissions a useful side effect in a world where environmental regulations are becoming ever stricter . Those who have implemented engine upgrades rate factors such as fouling of the exhaust gas boiler, soot deposits in moving parts and correct lubrication as far more important focus areas than those who have not . Generally speaking, there is a positive re-

Compliance with local environmental relations is also important for shipping lines requiring access to certain countries and ports . There is a significant difference in the approach to this question by those who have already implemented engine retrofits and those who have not . Those who have implemented engine retrofits are more inclined to address environmental compliance by investing in mechanical solutions that are certain to deliver the necessary advantages with a reasonable payback time . MAN Diesel & Turbo would like to thank all of those who spent some of their valuable time in responding to the survey that enabled the preparation of this report .

There are a number of ways of further increasing the financial return from slow steaming . These include slide fuel valves, turbocharger cut-out solutions, lubrication oil system upgrading, engine derating and propeller upgrading . Respondents in the survey who had adopted one of more of these measures were clearly pleased with the results .

action from customers to slow steaming with little sign of concern about schedules and planning . There may also be a trend amongst shipping companies to use the financial gains from slow steaming as a competition parameter . The shipping lines that decide to invest in solutions that can further optimise their returns from slow steaming stand to gain an advantage in this respect .

Copenhagen, Denmark June 2012

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All data provided in this document is non-binding . This data serves informational purposes only and is especially not guaranteed in any way . Depending on the subsequent specific individual projects, the relevant data may be subject to changes and will be assessed and determined individually for each project . This will depend on the particular characteristics of each individual project, especially specific site and operational conditions Copyright MAN Diesel & Turbo 1510-0197-00ppr Jun 2012 Printed in Denmark

MAN Diesel & Turbo PrimeServ Copenhagen Teglholmsgade 41 2450 Copenhagen SV, Denmark Phone +45 33 85 11 00 Fax +45 33 85 10 30 info-cph@mandieselturbo .com www .mandieselturbo .com

MAN PrimeServ a service brand of MAN Diesel & Turbo

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