T
he inclusion of shipping in the ETS regulatory framework and the implementation of the EEXI and CII indices, has led to a significant slowdown of vessels’ average sailing speeds. In its latest weekly report, shipbroker Intermodal said that “in February 2024, we discussed the impact of the integration of the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) regulations, alongside the Emissions Trading System (ETS), on the availability of shipping tonnage by influencing vessel speeds in 2023. By December 2023, we observed that the average speed of Supramax vessels had decreased to its lowest point: 10.75 knots for non-eco vessels and 10.94 knots for eco-design vessels. With the ETS regulation now in effect, it is pertinent to analyze how shipowners are adjusting the speeds of their fleets, particularly their older, non-eco vessels, to comply with these new regulations”.
Source: Intermodal
“According to our tracking data, the average speeds of both eco and non-eco Supramax vessels during the first six months of this year have declined to their lowest levels recorded. Specifically, eco Supramax vessels have averaged 11.19 knots, while non-eco vessels have averaged 10.87 knots, representing decreases of 1.23% and 1.45%, respectively, compared to the same period last year. When compared to the five-year average, the declines are even more pronounced, with decreases of 3.0% for eco vessels and 2.5% for non-eco vessels. This trend indicates a significant indirect reduction in the availability of shipping tonnage”, said Yiannis Parganas, Head of Intermodal’s Research Department.
He added that “another notable observation pertains to the volatility of average speeds throughout the year and, consequently, the operational flexibility of owners to adjust their vessels’ speeds according to freight market conditions. Typically, we observe an increase in average speeds during periods of stronger earnings, and a decrease during weaker periods. However, with the implementation of the new regulations, it appears that owners, particularly those of non-eco vessels, are compelled to adopt a more conservative approach. Indeed, by calculating the coefficient of variation (CV) for each year, we can see that the CV level for 2024 is the lowest compared to previous years, while, the volatility of non-eco vessel speeds in 2024, as measured by the CV, is 22.03% lower than the average volatility observed during 2019-2023”.
Source: Intermodal
Intermodal’s analyst concluded that “looking ahead, we can anticipate this trend to persist given the tightening of regulations in the coming years, likely playing a crucial role in shaping and supporting the freight market environment”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
