CHINA: Ocean shipping’s ‘slow steaming’ headaches
A global survey of the world's leading importers and exporters has revealed the full extent of the impact of ‘slow steaming' by container ships on the supply chains of businesses in the Asia Pacific region (AsiaPac).
August 1, 2011
A global survey of the world’s leading importers and exporters has revealed the full extent of the impact of ‘slow steaming’ by container ships on the supply chains of businesses in the Asia Pacific region (AsiaPac).
Slow steaming takes place when container ships operate at greatly reduced speed in order to save fuel costs and improve the utilisation of their vessels. For businesses trying to ship goods internationally, slow steaming means longer journey times and delays in the arrival of goods.
Of the 290 senior executives participating in the survey, 37 per cent were from AsiaPac, with the chemical, consumer goods, retail, healthcare and electronics industries all represented. The survey was conducted by BDP International’s consulting arm Centrx and Saint Joseph’s University in the US.
According to the survey, 92 per cent of AsiaPac businesses involved in international trade are being impacted by slow steaming. The most common area affected is customer service where 58 per cent of companies are experiencing problems such as an inability to deliver goods on time or difficulties meeting their commitments. Customer service was also the biggest concern in The Middle East and South America.
Another 51 per cent of AsiaPac companies have seen their inventory levels affected, either because they cannot get parts in time or they are forced to hold more inventory than in the past.