The optimal speed in container shipping: Theory and empirical evidence

Abstract By focusing on several critical speeds, this paper proposes a simple and applicable method to seek the optimal speed for carriers. The results show that carriers will reduce ship speed if the saved fuel cost outweighs the incurred capital and operating costs. The measure of critical fuel prices at different critical speeds is powerful to examine the optimal speed. Meanwhile, deploying extra ships and calling extra ports could be an optimal strategy for carriers in implementing slow steaming. The empirical result suggests that the optimal speeds for large ships will be higher than the ones for small ships.