Slow Steaming as Part of SECA Compliance Strategies among RoRo and RoPax Shipping Companies

Abstract

Many geographically peripheral member states of the EU are critically dependent on short sea Roll-on/Roll-off (RoRo) and mixed freight–passenger (RoPax) shipping services for intra-European trade. The implementation of the Sulfur Emission Control Area (SECA) regulation was expected to raise the operating cost for RoRo and RoPax shipping, and slow steaming was proposed as an immediate solution to save the increased cost. Previous research has investigated the issue of slow steaming and SECA using a quantitative approach. However, the reaction of the RoRo and RoPax shipping firms toward slow steaming as a mitigating factor in the face of expected additional SECA compliance costs using qualitative methodology has not been explored yet. In addition, the knowledge regarding the impact of slow steaming on the competitiveness of short sea RoRo and RoPax with respect to service quality is limited. This article has addressed these issues through the analysis of multiple cases focusing on RoRo and RoPax firms operating in the North and Baltic Seas. Overall, our findings suggest that the 0.1% SECA regulation of 2015 requiring the use of higher-priced MGO has not caused slow steaming in the RoRo and RoPax segments to a large extent. The increased bunker prices are partially transferred to the customers via increased Bunker Adjustment Factor and partly borne by the shipowners. We have found that out of 11 case firms in our study only one RoRo and one RoPax firm have reduced vessel speeds to compensate for the additional SECA compliance costs. We conclude that for RoPax and RoRo segment bunker prices, rigorous competition and, most important, different service quality requirements have significantly restricted the potential implementation of slow steaming.

Sustainability Transitions in Baltic Sea Shipping: Exploring the Responses of Firms to Regulatory Changes

“…However, the feared negative economic consequences-such as modal shift to road, clients lost, and even relocation of cargo-owner industries-that were heatedly debated by the shipping sector before the regulation did not materialize. Companies operating on regular liner traffic in the Baltic Sea did not make any major route changes or schedule adjustments either, but many of them transferred the additional cost caused by SECA to their clients in the form of a bunker fee [66]. Raza, Woxenius and Finnsgård [66] show that contrary to prior expectations, slow steaming did not increase either among Ro-Ro and Ro-Pax shipping companies operating in the SECA.…”

“…Companies operating on regular liner traffic in the Baltic Sea did not make any major route changes or schedule adjustments either, but many of them transferred the additional cost caused by SECA to their clients in the form of a bunker fee [66]. Raza, Woxenius and Finnsgård [66] show that contrary to prior expectations, slow steaming did not increase either among Ro-Ro and Ro-Pax shipping companies operating in the SECA. Their results show that in the Ro-Ro segment slow steaming is done on a small scale primarily to save fuel costs.…”

Planning and Simulation of Intermodal Freight Transport on International Networks. Hub and Spoke System in Euro-Mediterranean Area

“…The importance of the SSS, and in particular of Ro-Ro transport services, in the development of efficient and sustainable transport networks, is evident from the attention given to this sector both by the European Community [1,2] and by academic researchers. In the sector literature, several studies have been carried out in order to analyze the potential of maritime transport with reference to the efficiency of the Ro-Ro terminals [3][4][5] but also to the environmental sustainability of this kind of transport [6,7].…”

Instruments Used in Short Sea Shipping Research between 2002 and 2019

“…Number sixth research area covers potential demand, opportunity, competitive advantage and sustainable transport development ( [38], [69], [101], [50], [90], [124], [32], [75], [110], [94], [74], [111], [70], [71], [58], [59], [109], [128], [119], and [126], [99], Eventually, only few studies can be traced that focus on the influence of meteorological or weather conditions on SSS operations ( [43], and [29],).…”

“…Similarly, Hamilton [44] employed the same approach to investigate the SSS network and finance model and suggested that proper consultation with stakeholders and design of the implementation can mitigate constraints. [101] also employed the Qualitative Methodology when they investigated on deliberate steaming as part of SECA acquiescence strategies among Ro-Pax and Ro-Ro shipping businesses and accomplish that bunker rates, rough competition and greatest importantly dissimilar service value requirements have expressively limited the latent application of deliberate steaming.…”