Can slow steaming lower cost impacts of sulphur directive - shippers perspective

Abstract

The International Maritime Organization (IMO) (2013, 2014) and the European Parliament (EP) (2005, 2012) have addressed the matter that harmful air emissions should be decreased in shipping transportation. The purpose of this empirical case study is to examine and anticipate in detail if slow steaming in freight shipping can bring any economically positive effects to shippers in the new fuel situation of 2015, where the sulphur directive is to be followed. As research data for our analysis, we used information on the cost management and transportation of a paper mill. The data was used to study how slow steaming would impact the gross margins of a large paper mill in different markets in 2015. The results of this study can be summarised as the notion that the negative economic impacts of the sulphur directive can be lowered to some extent by using slow steaming on short sea shipping routes. The positive impacts gained from slow steaming will vary largely from market to market. We determined that a case study is a relevant method to study and to reveal economic consequences produced by environmental directives as well as how much slow steaming can remove presupposed negative impacts.