Shippers Taking It Slow in Bad Times  

The WSJ has an article on efforts to cut fuel consumption by large shipping companies as part of cost cutting initiatives - Shippers Taking It Slow in Bad Times.

ABOARD THE EUGEN MAERSK, IN THE NORTH SEA -- On an early afternoon last month, the Eugen Maersk has left Rotterdam, the Netherlands, on the tail end of a journey from Shanghai. But the giant freighter is cruising at 10 knots, well shy of her 26-knot top speed.

At about half speed, fuel consumption drops to 100-150 tons of fuel a day from 350 tons, saving as much as $5,000 an hour. "The strategy now is to slow steam as much as possible," said Christian Hagart, the Eugen's chief officer.

That strategy is a key element in plans by AP Moeller-Maersk AS to cut $1 billion in costs this year, scaling back on everything from fuel to paper napkins. Analysts say the cuts should keep the whole company out of the red in 2009, since Maersk's container unit is expected to lose between $1 billion and $2 billion.

Maersk's moves come as shipping companies are struggling to survive the worst collapse of global trade since World War II. Analysts predict that at least one of the world's 20 biggest shipping companies will go bust this year, caught by the global economy's sudden downturn as the industry was ramping up capacity. Global trade is expected to fall 9% in value this year, according to the World Trade Organization.

Other shipping companies are taking similar cost-cutting measures to Maersk's. CMA-CGM SA of Marseille, France, the world's third-biggest shipping company by sales, is slowing ships, canceling certain routes and ordering that new ships be made more fuel efficient.

Like many recession-conscious families, the crew of the world's largest container ship is looking for ways to cut costs. Take a tour aboard the Eugen Maersk. John Miller reports.

At Maersk, the world's biggest shipping company, the situation is particularly stark. Though the Copenhagen-based company isn't at risk of going belly up, its container volume fell 12.8% last month from a year earlier.