K-Line sees slow steaming as a key instrument for coping with sharp gains in bunker prices, a top company official told delegates at the Singapore International Bunkering Conference (SIBCON) on Wednesday. Kenichi Kuroya, managing director of K Line Pte Ltd and executive director of K Line (S) Pte Ltd, said bunker price increases have had a big impact on bunker fuel's share of operational costs in the past year alone.
He said K-Line, which burns about 5 million metric tonnes (mt) of marine fuels per year, had seen its bunker bills rise by $500 million.
The Singapore-based company is engaged in the container line, bulk-carrier, car-carrier and tanker sectors of ocean transport.
According to estimates presented by Kuroya, bunker fuels as a share of operational costs have gone up from 20% in 2007 to 28% in 2008 for the container sector.
For bulkers, bunker costs had gone up from 40% of operational costs in 2007 to 51% in 2008, tankers saw the share rise from 39% to 50%, while car carriers saw bunker costs jump from 30% in 2007 to 40% of the total in 2008, Kuroya said.
Slowing sailing speeds by just a few knots on the company's Europe-Asia could save the company 621 mt per voyage, translating to annual savings of $19.4 million, according to Kuroya's calculations.
He said bunker fuel savings could add up to $9.5 million per year on the Shanghai to North America West Coast route, based on fuel savings of 305 mt per voyage.
The calculations assumed a bunker fuel price of $600 per metric tonne (pmt).
380 centistoke (cst) bunker prices in Singapore peaked above $760 in July this year, rising from under $400 pmt a year earlier.
Prices have dropped considerably since the July 2008 peak, dipping below $500 pmt this month.
Kuroya said that if K-Line could implement slower steaming without putting in extra vessels to meet its service requirements, it would be a direct improvement of the company's bottom line.
With emissions from the sector in the spotlight, Kuroya also pointed to slow steaming's potential for reducing output of sulphur oxides, nitrogen oxides and carbon dioxide.
He said K-Line, which burns about 5 million metric tonnes (mt) of marine fuels per year, had seen its bunker bills rise by $500 million.
The Singapore-based company is engaged in the container line, bulk-carrier, car-carrier and tanker sectors of ocean transport.
According to estimates presented by Kuroya, bunker fuels as a share of operational costs have gone up from 20% in 2007 to 28% in 2008 for the container sector.
For bulkers, bunker costs had gone up from 40% of operational costs in 2007 to 51% in 2008, tankers saw the share rise from 39% to 50%, while car carriers saw bunker costs jump from 30% in 2007 to 40% of the total in 2008, Kuroya said.
Slowing sailing speeds by just a few knots on the company's Europe-Asia could save the company 621 mt per voyage, translating to annual savings of $19.4 million, according to Kuroya's calculations.
He said bunker fuel savings could add up to $9.5 million per year on the Shanghai to North America West Coast route, based on fuel savings of 305 mt per voyage.
The calculations assumed a bunker fuel price of $600 per metric tonne (pmt).
380 centistoke (cst) bunker prices in Singapore peaked above $760 in July this year, rising from under $400 pmt a year earlier.
Prices have dropped considerably since the July 2008 peak, dipping below $500 pmt this month.
Kuroya said that if K-Line could implement slower steaming without putting in extra vessels to meet its service requirements, it would be a direct improvement of the company's bottom line.
With emissions from the sector in the spotlight, Kuroya also pointed to slow steaming's potential for reducing output of sulphur oxides, nitrogen oxides and carbon dioxide.