Evaluating the Economic Implications of Speed Changes on Container Ship Operations

This study presents a comprehensive analysis of the relationship between vessel sailing speed and the economic performance of container shipping operations, emphasizing the critical trade-offs between fuel efficiency, operational costs, and operation frequency. Using 55 combined noon reports from 1,880 TEU containerships on a fixed Northern Europe--U.S. East Coast route, this study develops an exponential speed-fuel consumption model integrated into annual voyage simulations. Results demonstrate that fuel consumption increases exponentially with speed, significantly impacting bunker costs, which are identified as the largest component of operating expenses. Higher speeds increase annual income (up to $41.9M) and profit (up to $33.4M), but profitability is lower (79%) due to rising fuel costs. Additionally, slower speeds improve fuel efficiency and profitability with an 82% rate despite reducing voyage frequency. The study incorporates key operational parameters, including port turnaround time, freight rates, capacity utilization, and prevailing fuel prices, offering a robust basis for decision-making. The findings highlight the strategic value of speed optimization in balancing economic goals with decarbonization and fuel cost challenges. The empirical model links theory with practice and offers practical guidance for operators aiming for resilient and sustainable operations through data-driven speed management.