Saturday, January 19, 2008

Money talks

Or sails in this case. The NY Times has an article on efforts by shipping companies to save money on fuel costs and the surprising results for the bottom line.
In Hamburg, the Hapag-Lloyd shipping company is not waiting for 2012. It reacted to rising fuel prices by cutting the throttle on its 140 container ships traveling the world's oceans, ordering its captains to slow down.

The company in the second half of last year reduced the standard speed of its ships to 20 knots from 23-1/2 knots, and said it saved a "substantial amount" of fuel.

The calculation used in shipping is complex: longer voyages mean extra operating costs, charter costs, interest costs and other monetary losses. But Hapag-Lloyd said slowing down still paid off handsomely.

"We've saved so much fuel that we added a ship to the route and still saved costs," said Klaus Heims, press spokesman at the world's fifth-largest container shipping line. "Why didn't we do this before?"
With fuel costs for a 10,000 ton ship of around $8000 a day, they were talking big bucks for immediate savings. Once again we find that people will do just about anything if you can tie it to the bottom line.

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