Editorial No. 02 / 2008

“Oil is a very important component of economic growth.”

- Maria Bartiromo -

“Oil is a very important component of economic growth.” This has always been true. Since at least 2007 however, it is not only an important component, it is one of the key components - if not THE key component in our shipping business.

With crude oil prices steadily rising and hitting the 100 USD mark per barrel by the end of 2007 and again in February 2008, the “oil factor” is discussed everywhere - economic topics such as freight rates and a floating bunker surcharge as well as the much discussed extra vessel - supposingly reducing fuel costs.

Obviously it remains to be shown, whether an additional ninth (or tenth) vessel on the Asia-Europe strings will be what it takes to save bunker, to reduce emissions and to provide the schedules with additional buffer times to compensate port congestion and to maintain schedule integrity.

The idea behind fuel saving is simply that by introducing an extra vessel, ships will reduce speed from 25 to approximately 20 knots and immediately fuel costs will be saved. But will this really have an impact substantial enough, to make a difference to the bottom line year end figures? Will the saving on fuel exceed the higher operating (and also bunker) costs arising from the additional vessel? We will know by the end of the year. From an ecological and also economic point of view it is a least worth a try.