Proof Positive

The world’s economy is crashing – but we’re still hearing about “slow-steaming”, 18,000 TEU megaships, dredging, and every other nonsensical idea the dimwits can throw at us. Back on June 3, 2011, in our Vol. XXVII, Art. 29 commentary, we wrote:

“If you’re not convinced by this time that ‘slow-steaming’ is just another hoax – just another sure-fire way to bleed the taxpayer/consumer – read what Lloyd’s Register says about the stratagem. In dismissing the slow-steaming concept as costly and harmful to the environment, the marine classification society told Marine TV:

“‘Containerships are built to operate at higher outputs and will need to be more closely monitored when slow steaming to avoid loss of engine performance, fuel quality, and lubrication oil when moving below 20 knots. The large containership is designed for 25 knots at 70,000kw main engine power and will require just 50 percent power when reduced to 20 knots.

“As voyage times increase, fuel savings will be less, and at slower speeds Nox emissions also increase, resulting in waste engine capacity, higher used capital costs from unused power potential, losses in heat recovery systems, turbocharger and propeller as well as increased fouling of hulls and propellers. Lloyd’s register also warned of increased compensatory fuel consumption and possible vibration levels risking safe, reliable ship operations.’ –

“Carriers should quit lying to us,” we wrote. “There are no benefits or profits to pass on. The only things being passed on are the extra costs incurred by the ‘slow-steaming’ stratagem. The real reason for the ‘slow-steaming’ is to avoid scrapping the overcapacity which resulted from mismanagement and the ‘corporate fanning of feathers’. Let’s call a spade a spade. ‘Slow stealing’ is what it is.

“Emissions? Fuel consumption? Costs? Need more proof that these guys are liars?” –

The latest warning: “Slow steaming risks contract breach if ships not moving with ‘all speed'”…

“A wide range of legal risks are surfacing from cost-saving slow steaming, according to lawyers John Reeder and Ravi Aswani of the London law firm, Stone Chambers.

“The deliberate slowing of vessels to achieve a lower fuel consumption conflicts with the typical shipping contract phrase that calls on ships to move ‘with all speed’.

“‘Various standard contracts of carriage contain express provisions dealing with this obligation such as ‘with all convenient speed’, ‘with all speed’, ‘with all convenient dispatch’ or ‘with the utmost despatch’,” said the lawyers.

“There is also risk of engine damage on ships designed to move at high speeds, they said in an article published in the Law Bar Briefing, and cited by New York’s Maritime Advocate.

“‘As well as the risk of breach of the due despatch obligation, slow steaming may risk damage to his vessel’s engine or anti-foul hull coating as the result of a vessel not operating at optimal speed,’ they said.

“‘Modern high speed diesel engines are designed to operate only at sustained high service speeds and many manufacturers emphasize that low load operation should be avoided for a number of technical reasons. Slow steaming presents the problem of the need to use differing lubricating oils and to train crew adequately to manage this. This brings into question issues such as the recoverability of losses for an engine breakdown under an insurance claim. Where there has been a history of slow steaming, the insurer may argue that problems were caused by the deliberate or negligent mismanagement of the vessel,’ they said.

“‘Crew training and engine management are likely to receive close scrutiny and the shipowner intending to implement a slow-steaming policy would be well advised to ensure that the appropriate training and advice to their engineers is put in place first,’ said Messrs Reeder and Aswani.

“‘A shipowner might wish to steam slowly for financial reasons or secure environmental targets, and regulators are also increasingly likely to have an influence or used as a justification,’ they said, referring to the increasingly mandated use of costly low-sulfur fuel.

“‘There is an IMO working group considering the implementation of a port state levy based on the fuel consumed on the voyage to that port and/or a global emissions trading scheme,’ they said.

“The lawyers said that an unpublicized fleet-wide policy of slow-steaming might also be a peg to hang a claim for breach of the due despatch obligation unless it is brought to the attention of the charterer or cargo owner before the contract is concluded and reflected in the price of the services.

“‘In London Arbitration 10/00, a case about hull fouling, the tribunal commented that if a vessel had deliberately slow-steamed to save fuel then this would have been a breach of the despatch obligation,’ the article said.

“Ship salvage operators may also find themselves damned if they do and damned if they don’t by slow-steaming.

“‘For some years now salvors have proceeded to casualties where there is no immediate physical danger at an economical speed on account of high bunker costs. This has led, on occasion, to salvors being criticized in Lloyds Open Forum [LOF] arbitrations for not responding promptly,’ the article said.

“Arbitrators have quite reasonably recognized that where the response is not urgent, economical steaming is sensible because at the end of the day the cost of the service will fall on the salved property. In fact, in non-urgent cases a salvor might be criticized for steaming full ahead thereby increasing the cost of the service, the article said.” –

[Like we said, “Need more proof that these guys are liars?]