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High fuel costs lead to slowdown for CMA CGM ships

High fuel costs lead to slowdown for CMA CGM ships

Marseilles: Skyrocketing bunker fuel prices have led liner group CMA CGM to enforce speed reduction on its container vessels deployed on the Asia-Europe routes, according to Bunkerworld. ''We have taken the decision to slow down the speed of ships on services between Asia and Europe, because the situation is not sustainable,'' CMA CGM director of Asia-Europe lines, Nicolas Sartini, is reported as saying.

CMA CGM apparently believes that such a speed reduction could cut costs by as much as 40% and also reduce emissions. A North China-Europe service will be the first affected as from December 1, when a new vessel will be added to the loop. CMA CGM says that shippers share their view that service reliability is more important than speed.

The French container liner group's announcement comes on the heels of the declaration of a fuel surcharge of $545 per teu and $860 per feu imposed by the 14 Transpacific Stabilization Agreement (TSA) member container lines to combat rising bunker fuel costs.

Higher fuel prices are likely to lead to further slowdowns in speed and other design changes in container ships, according to leading classification society Germanischer Lloyd (GL). Speaking at a press dinner in London last night, Hermann Klein, member of the GL Executive Board said, "The percentage of fuel of the overall operation costs has risen considerably over the past three years. Today fuel makes up 63%, while in 2004 it was roughly a third. The daily cost of fuel for an 8,000teu vessel is about $121,000 - which is very high."

Stating that the most obvious solution to reduce fuel costs was slower speeds, Klein also recommended methods such as increased efficiency of engines and improved hull design and coatings to reduce fuel costs. [20/11/07]