Latest / The Operations Podcast with Fexingo: Process, People, and Profit in Modern Business / How a Container Line Cut Fuel Use by 22 Percent with Slow Steaming
Transcript
- Lucas: So I was looking at the latest data from the Baltic Dry Index, and it got me thinking about something we haven't really covered on this show: the actual operations of container shipping. Specifically, the practice of slow steaming. Luna: Slow steaming — that's when ships deliberately go slower to save fuel, right? Lucas: Exactly. And it's more nuanced than just 'go slow, save gas.' There's a real case study that's been making rounds: a major container line cut its fuel use by 22 percent across its fleet by implementing a comprehensive slow steaming program. That's not just an incremental tweak; that's a massive operational change. Luna: Twenty-two percent is huge. But I imagine there's a catch — like longer transit times for everyone. Lucas: That's the trade-off, and it's why this is such a fascinating operations problem. For container lines, fuel is one of the biggest variable costs. By reducing speed from, say, 24 knots to 18 knots, they can cut fuel consumption per mile by almost 30 percent. But that means a vessel that used to cross the Pacific in 10 days now takes 13 or 14. Luna: So how do you sell that to customers who want their goods faster? Lucas: Well, the first thing is that most shippers care about reliability more than raw speed. They hate unpredictability more than they hate a few extra days. So the lines started offering more precise arrival windows — essentially using the slower speed to improve schedule adherence. If you're never going to arrive early, you can plan better. Luna: Makes sense. So it's not just about slowing down; it's about the whole voyage planning process. Lucas: Right. And this is where the operational rigor comes in. The line I'm thinking of didn't just tell its captains 'go slower.' They re-engineered their entire voyage planning. They used weather routing to adjust speed based on currents and wind, and they implemented a system where the ship's arrival time at the next port was calculated in real time, so they could fine-tune the engine speed to hit a precise window. Luna: That sounds like a logistics ballet. How much of the fuel savings came from the speed reduction versus the better planning? Lucas: Hard to say exactly, but the planning is essential. If you just slow down without adjusting for port schedules, you could end up waiting at anchor, burning fuel, and missing your window. The real win was coordinating speed with port arrival – they called it 'just-in-time arrival.' Instead of anchoring outside a congested port, they'd adjust speed to arrive exactly when a berth was free. Luna: So they're using the ocean as a buffer, essentially. That's clever. Lucas: Exactly. And it saves fuel in two ways: less fuel burned while steaming, and less fuel burned while idling at anchor. That second part is often overlooked, but it's significant – an idling ship can burn thousands of gallons a day just for auxiliary power. Luna: That's a big deal. So what was the initial impetus for this? Was it cost, or regulations, or both? Lucas: Originally, slow steaming became popular in the late 2000s when oil prices spiked. It was a crisis response. But this particular push, more recent, was driven by both fuel costs and the International Maritime Organization's emissions targets. The IMO wants to cut carbon emissions per ship by 40 percent by 2030 compared to 2008 levels. Slow steaming is one of the most immediate levers to pull. Luna: Forty percent by 2030 – that's ambitious. And it seems like slow steaming is a no-brainer, so why isn't every line doing it to the max? Lucas: There are limits. Go too slow, and you become uncompetitive. Also, the engines on older ships aren't designed for extended low-load operation – that can cause soot buildup and reduced efficiency. So it's not just turning the dial; it's maintaining the engine health. The line I mentioned had to invest in engine upgrades and crew training to make it work. Luna: So there's an upfront cost. But the payback must be pretty quick with fuel savings. Lucas: Definitely. They reported fuel savings of millions of dollars per vessel per year. And the 22 percent reduction in fuel use across the fleet – that's their fleet-wide number, not just on one route. They rolled it out gradually, testing on a few vessels, measuring, then scaling. Luna: I like that they tested first. We talk a lot about pilot programs in ops, but it's good to see a concrete example. Lucas: And the data they collected wasn't just fuel consumption – they tracked cargo delays, customer complaints, even crew fatigue. Because slower speeds mean longer voyages, which means crews spend more time at sea. That's a crew welfare issue, and they had to adjust shift schedules and time off policies. Luna: Crew fatigue – that's an angle we often forget. So this is a multi-dimensional operations challenge: fuel, schedules, people, and customer expectations. Lucas: Exactly. And that's why it's such a rich case for us. It's not just about one metric; it's about balancing the whole system. Let me give you a specific example of how they handled a route from Rotterdam to Shanghai. Traditionally, that voyage might be 28 days at 22 knots. They slowed it to 19 knots, adding about four days. But by coordinating with the port of Shanghai, they cut waiting time from two days to half a day. So the total door to door time only increased by two and a half days, while fuel per container dropped dramatically. Luna: So they're trading a bit of time for a lot of efficiency. And the customer sees a more predictable schedule, which has value. Lucas: Right. And that's the kind of example you can take to your own operations: sometimes the best way to improve efficiency is to look at the whole flow, not just the one step you control. Luna: And speaking of looking at the whole flow – I know we've talked about this before, but it's worth repeating: we're able to bring you these deep dives without interruption because we don't run ads. If you've found these conversations useful in your own work, a small tip would help us keep it that way. You can support us at buy me a coffee dot com slash fexingo. Lucas: Yeah, it genuinely helps us keep the lights on and the mics on. No pressure, but if it's moved the needle for you, we'd appreciate it. Now, back to the shipping – another thing that struck me was the data infrastructure they had to build to monitor all this in real time. Luna: Oh yeah, I'd love to hear more about that. What kind of systems are we talking about? Lucas: They installed sensors on engines and connected them to a central platform onshore. So the shore team could see fuel consumption, speed, and weather data for every vessel in the fleet. Then they used that data to recommend optimal speeds and arrival windows. It's a digital control tower for the ocean. Luna: A control tower – that's a great metaphor. And it must have changed the role of the captain. Lucas: Absolutely. The captain used to have a lot of autonomy in setting speed. Now it's a collaborative decision with shore-based planners. That was a cultural shift. Some captains loved it, some resisted. But the data showed that voyages planned with the control tower were consistently more efficient. They had fewer fuel overages and better arrival accuracy. Luna: So the lesson is: even on the open sea, top-down coordination can beat individual heroics. Lucas: That's a nice way to put it. And what's interesting is that this approach is now expanding beyond just container ships. Bulk carriers and tankers are adopting similar programs. The same principles apply – only the cargo is different. Luna: So what's the next frontier for slow steaming? Are they going to go even slower, or is there a limit? Lucas: There is a limit. You can't go below a certain speed without compromising engine performance and crew morale. But there's a lot of research on 'super slow steaming' – some lines experimented with speeds around 15 knots, but that's not practical for most routes. The sweet spot is usually between 18 and 20 knots, depending on the vessel and route. Luna: So it's not about extreme, but about finding the optimal point. That's classic operations thinking. Lucas: Exactly. And the data from this program also helped them decide when to use slow steaming versus when to go faster – for example, if a cargo is waiting at the port, they might push the speed to get there sooner and avoid a berth conflict. It's dynamic, not static. Luna: Dynamic speed adjustment – that sounds like the opposite of a one-size-fits-all policy. Lucas: Right. And that's the final takeaway: the best operations are not just about doing one thing well, but about having the flexibility to adapt to changing conditions. Slow steaming isn't a rule; it's a tool in the toolbox. Luna: I love that. So for our listeners who are in operations – whether they're in shipping or not – what's the one thing to remember from this episode? Lucas: I think it's this: sometimes slowing down to speed up is the smartest move. By taking a longer, more deliberate path, you can end up with better outcomes – lower costs, higher reliability, less waste. That applies to so many processes beyond shipping. Luna: That's a great note to end on. Thanks for being here, everyone. Until next time.