White paper

Long-term potential for increased shipping efficiency

Maritime shipping is highly fuel-efficient, but its sheer volume and rapid growth make it a major consumer of energy and source of carbon emissions. As the shipping industry and governments seek ways to reduce shipping’s overall energy and carbon footprint, the answers to many questions remain elusive. Among these questions are how much variation in shipping efficiency is seen in the real-world fleet, and how quickly shipping can move to embrace best technical and operational practices to increase shipping efficiency.

This study offers a novel analysis that connects 2011 in-use fleet characteristics, global satellite data on ship movement, and literature on ship technology to assess the long-term prospects for increasing shipping efficiency. The underlying satellite-based data allows for more in-depth knowledge of real-world operational ship speed and its relation to ship efficiency than previous analyses. This analysis also investigates how efficiency characteristics (age, size, technology, operational practices) influence the efficiency of the shipping fleet, and develops a ship stock turnover model to independently track technical and operational efficiency practices in ships.

The findings indicate that industry-leading ships are about twice as efficient as industry laggards across major ship types. To put this in perspective, for example, the top 5% of container ships have a carbon dioxide (CO2) emission intensity (i.e., emission rate per unit of cargo carried) that is 38% lower than industry-average container ships. Even broader efficiency variation is seen between shipping industry leaders and laggards across the other major ship types. Part of this variation is a matter of how quickly new ship technology is entering the fleet, and how new, generally larger ships are increasingly and substantially more efficient, and have more sophisticated engine controls that allow them to more fully and more frequently benefit from speed reduction.

This analysis indicates that, by fully embracing the available technical and in-use practices of the low-carbon industry leaders of today, there is the potential to reduce CO2 in absolute terms even while business-as-usual freight movement doubles. Moving to industry-leading ship efficiency practices could amount to reductions from business-as-usual efficiency practices of 300 million metric tons of CO2 per year and 2 million barrels of oil per day by 2030.

This study has important implications for the shipping industry, shippers, and perhaps ultimately consumers. Analytical approaches such as the one utilized here suggest that data and methods are at hand that shipping companies can use to more precisely compare their own practices with those of their peers. Shippers could increasingly demand a more precise accounting of ships’ age, technical efficiency, and in-use shipping efficiency. Based on the data in this assessment, there is the potential to develop a tool to be used by shippers to quantify, evaluate, and compare their supply chain carbon footprints in a manner that does not rely on more aggregated fleet-average simplifications.