Container vessels are sailing at the slowest speeds in at least two years to save on fuel costs, driving up freight rates and the shares of shipbuilders.
The global fleet of about 4,660 carriers moved at an average of 11.44 knots last month, 7.4 percent less than a year earlier and the lowest since Bloomberg began compiling the data from AISLive in May 2008. Sailing more slowly saves fuel, the price of which has more than doubled in two years, and curbs the availability of ships, shoring up income for owners.Not too long ago, over-capacity was the watch-word in the shipping industry, as global trade fell off a cliff. But now, the shipping lanes are slower even with more freight being hauled.
Bloomberg has one additional tid-bit:
“Slow steaming is going to bring the biggest change to the shipping industry since World War II,” said Lee Sokje, an analyst at Mirae Asset Securities Co. in Seoul, whose recommendations on Hyundai Heavy Industries Co. and Samsung Heavy Industries Co., the world’s biggest yards, earned investors at least 63 percent in a year, data compiled by Bloomberg show. “It was only last year there was concern of oversupply but now we may have to worry about undersupply.”Mr. Sokje might be exaggerating abit about “the biggest change to the shipping industry since WWII”—however, it’s definitely worth keeping an eye on shipping into the near future.
If shipping and freight rates begin rising—product of a combination of higher fuel prices and undersupply brought about by slow sailing—these price rises will reach the consumer sooner rather than later.
And rising consumer prices means . . .