If shipping is the heart of global trade, then the pulse is about to slow down.

Slowing down is the fastest way to cut emissions

There is still uncertainty over which fuel should be used in the long run to reduce greenhouse gas emissions. Against this backdrop, many shipping companies still keep their aging fleets in service, but in order to comply with the new environmental rules, older vessels may soon have to start sailing more slowly.

From next year on, the International Maritime Organization (IMO) requires all ships to calculate their annual carbon intensity based on the emissions of the cargo they carry, and requires that it decline progressively.

Although older vessels can be retrofitted with equipment to reduce emissions, analysts say the fastest solution is simply to slow down.

According to Danish Ship Finance, a 10% reduction in sailing speed cuts fuel consumption by almost 30%.

Jan Dieleman, President of Cargill Ocean Transportation, which operates more than 600 vessels, says that either ship efficiency must be improved, or speed must be reduced.

Newbuilding cannot keep up with fleet aging

With the current economic recovery and surging demand, supply chains are already under strain. If older vessels also slow down, transport capacity could take another hit.

According to Clarksons, although more than 40% of new ship orders can support less polluting fuels, only about 5% of the global fleet can currently use less polluting fuel alternatives.

Data from Clarksons also shows that the pace of new orders is not enough to stop the aging of the three main fleet types: tankers, container ships and bulk carriers.

In 2021, orders for new container ships surged to a record high and have kept growing at a strong pace this year. But as demand for new tankers and bulk carriers is much lower, orders for all three vessel types now account for only about 10% of the fleet, down from more than 50% in 2008.

As of June 2022, the average age of bulk carriers carrying grain, coal and other bulk cargo had risen from five years ago...