Monday 19th Aug 2019 - Logistics & Supply Chain

Shippers call for a share in slow steaming savings

69 per cent of global import and export businesses think ocean carriers should reduce rates to share the cost savings of slow steaming, according to a global survey analysing its impact on supply chains.

31 per cent would prefer to see these savings used to offset future increases.

The survey found that 92 per cent of Asia Pacific businesses had been affected by slow steaming, with 58 per cent reporting negative consequences to their customer service levels.

51 per cent of Asia Pacific businesses have seen their inventory levels affected, 49 per cent have suffered inhibited production scheduling, 30 per cent report decreased competitiveness and 27 per cent report diminished cash flow.

Companies have had to plan further in advance, use more carriers and increase inventories.

The survey was conducted by BDP International’s consulting arm Centrx and Saint Joseph’s University in Philadelphia, The United States.

Jacques Chan, BDP’s general manager for Hong Kong and South China. “Nearly every industry is affected by slow steaming, and the managers of import and export focused businesses want a say in how the practice affects them.”

“The shippers want carriers to understand what slow steaming is doing to their supply chains, and they want to be treated more equitably in the process. Carriers should be prepared to negotiate more favourable rates reflecting both the increased delivery times and the savings from slow steaming.”

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