Alphaliner: Low oil price could worsen overcapacity

The price on IFO 380 bunker has gone down 35 percent since 2012. As such, the massive saving carriers can achieve by reducing their speed has almost disappeared.

The container carriers have achieved significant cost reductions in recent years by lowering ships' speed in order to save money on their towering fuel expenses. Meanwhile, the use of slow steaming has - according to analyst agency Alphaliner - secured work for around 7.1 percent of the global container fleet, which has thus also helped lower the massive overcapacity of ships.

Now the financial benefits are disappearing alongside the falling oil price, which could make carriers speed up and thus worsen the current overcapacity - a development that would have serious consequences for owners of ships that carriers have chartered from so-called non operating owners (NOO).

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