Clarksons Research managing director Stephen Gordon has warned that owners may be unable to respond to market spikes with ship speed increases.
Vessels have been slowing down to meet fuel efficiency targets enforced by the International Maritime Organization’s Carbon Intensity Indicator (CII).
Ships are ranked A to E on efficiency, with Clarksons estimating a third are in the lower D and E brackets this year.
Gordon sees speed reductions as a reasonable response for owners to be compliant.
Vessel supply reduction through slower steaming could represent 2% to 4% of the fleet over the next few years, he believes.
“But perhaps more critical may be the removal of the flexibility to speed up in tighter markets, introducing a ‘straitjacket’ around the supply/demand markets of shipping,” Gordon said.
The Clarksons Research boss added there are also further uncertainties to grapple with around CII, ranging from enforcement and charterer attitudes to the ratings to the contractual challenges of CII clauses.
The UK company calculates container ship average speeds reached a new low of 13.7 knots in February, down 4% from the 2022 average, as operators attempt to manage capacity on the back of weaker markets due to faltering demand and reduced port congestion.
The drops have been the steepest in the larger size sectors, with average speeds for 12,000-teu to 17,000-teu container ships plunging 8% in February versus 2022 levels.
For bulkers, average speeds stood at 10.9 knots in February, also a new low and 2.2% below the 2022 average.
Weak seasonal picture
Clarksons Research said this was due to weak seasonal demand trends amplifying underlying pressure from reduced port congestion and weak global economic conditions.
In the tanker sector, average crude carrier speeds were down 0.3% month-on-month in February to 11.4 knots.
This is 1.3% above the 2022 average in strong markets, but still 1.6% below the 2019 figure.
Product carriers were travelling at 11.3 knots in February, down 0.3% from the 2022 average.
“Speeds across the major shipping sectors have generally been on a long-term downward trend, now standing significantly below 2008 levels,” Gordon said.
Container ships are 29% below this mark, with bulkers 20% slower and tankers down 19%.
“Although strength in charter markets will continue to impact short-term speed variations, on an overall basis speeds are likely to be further impacted by growing environmental regulations, affecting effective supply capacity and markets,” the managing director concluded.
