Permanent slow steaming - A solution to manage the increased costs imposed by the 2015 SECA regulation?

In 1999 a decision was made that would prove to have dramatic consequences over a decade later. The decision was made by the Council of the European Union, and addresses the issue concerning sulphur content in marine fuels. In 2015, the maximum sulphur content allowed in marine fuels within the European sulphur emission controlled area (SECA) will be lowered from the current limit of 1.0% to 0.1%. To comply, shipping companies are burdened with dramatic cost increases, derived from either switching to cleaner fuel or new technology investments. By combining a theoretical framework with a case study, this thesis will investigate the possibility to compensate the increased costs, associated with using cleaner fuel, by utilizing the concept of slow steaming. Although very difficult to attain exact data to calculate the economic effect of slow steaming, good estimations can be achieved and the theoretical result indicates that a 10-15% reduction in cruise speed could compensate for 50-80% the increased costs. There are however several factors which complicate an implementation of slow steaming, these factors will be discussed in the thesis.MSc in Logistics and Transport Managemen