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SeaIntel: Farewell to slow steaming with oil price of USD 50

Today's news that the oil price has now dropped below USD 50 for the first time in five years comes as bad news to the container industry. CEO and partner of SeaIntel, Lars Jensen, expects that several major alliances will increase their speed unless the price changes in the coming months.

Photo: Hanjin

An oil price that has now dropped below USD 50 per barrel means that the best argument for slow steaming disappears, namely saving a lot of money. Because in recent years, the more carriers have slow steamed, the more money they have saved. And as time passes, CEO and partner at SeaIntel, Lars Jensen, estimates that one or several of the four major container alliances set to fight for the market in 2015 will increase their speed in the efforts to win customers.

This will not be 2M with Maersk Line and MSC, as the two carriers - with a fleet of ultra-large vessels - have a clear interest in keeping the big ships sailing at the number of planned departures announced in the collaboration's new network. Ocean Three will be more liable to increase the speed, as UASC especially is under a certain pressure to demonstrate its profitability and its ability to fill the ships. But the last two alliances in particular - G6 and CKYHE, which operate smaller vessels - could have an interest in speeding up, because the carriers with their smaller fleets can use speed and increased flexibility as competitive parameter.

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