Cargill to drop ship speed 18% to tackle its $2 billion bunker bill
Minnesota, U.S. based commodity trader and dry-bulk charterer Cargill Inc. (Cargill) says it plans to reduce vessel speeds by a further 18 percent to 9 knots in an effort to reduce the $2 billion a year it spends on bunkers, Bloomberg reports.
The firm operates about 400 vessels and Jonathan Stoneley, environment and compliance manager of Cargill Ocean Transportation, said they were "looking at every ship to see if the investment makes sense."
"In the current market, the only way you can make money is excellence in execution," Stoneley said. "There's going to be a lot more pain before it gets better."
Ships must be new or have engine modifications to manage the lowest possible speeds he said, and in a press release Tuesday Cargill, Huntsman Corp., and UNIPEC UK, who combined charter over 350 million tonnes of commodities annually, said they had all decided to charter only the most fuel-efficient "eco-friendly" ships.
"Cargill has introduced a senior management override on the use of the least energy efficiency vessels. By choosing the more efficient vessel available to us, we are making a strong statement to the market," commented Stoneley.
"We hope this action will demonstrate to ship owners that they can and should do more in terms of efficiency, and that the market will reward them," he added.
A Panamax dry-bulk ship proceeding at 14 knots burns fuel worth $18,450 daily at current prices, according to the Bloomberg report, and data from Oslo-based RS Platou Economic Research showed the global dry-bulk fleet averaged 12.3 knots in August.
Maersk Tankers said slow steaming an unloaded tanker at 8.5 knots instead of 14 to 16 knots can cut bunker costs by 50 percent.
