Maritime Economics & Logistics

, Volume 19, Issue 4, pp 601–618 | Cite as

The effects of financial incentives on vessel speed reduction: Evidence from the Port of Long Beach Green Flag Incentive Program

  • Celeste Ahl
  • Elaine Frey
  • Seiji Steimetz
Original Article


We analyze the efficacy of using dockage-fee discounts as an incentive for oceangoing vessel operators to comply with the Vessel Speed Reduction programs of seaports, such as those implemented at the ports in Long Beach, Los Angeles, San Diego, New York and New Jersey. On the basis of unique data from the Port of Long Beach’s program, we find that discounts are indeed effective, and that those effects vary considerably by operator type, suggesting a role for differentiated pricing strategies to better motivate compliance. We also develop a novel method for exploiting those data to estimate the value of time for vessel operators, with estimates ranging from US$268 to $759 per hour. Our findings are obtained from a discrete-choice model for panel data that estimates how the probability of compliance is influenced by potential dockage-fee savings and speed-reduction delays, and by the characteristics of operators and their vessels. That model also reveals the tradeoffs those operators make between time and money, from which we derive our value of time estimates.


maritime transportation port policy ship emissions slow steaming value of time 



The authors would like to thank Alison Linder, Genevieve Giuliano, Victoria Valentine Deguzman and participants of the METRANS Transportation Center Research Seminar at the University Southern California for helpful comments and suggestions. They are especially indebted to Rafael Delgado, Valerie Martin and the Port of Long Beach for providing data and insights about the port’s Green Flag Incentive Program and thank California State University, Long Beach for supporting this research through a Research, Scholarly and Creative Activities award. Finally, they are extremely grateful to the reviewers and the editor for their high-quality comments and suggestions that have substantially improved this article.


  1. California Environmental Protection Agency Air Resources Board. (2009) Vessel speed reduction for ocean-going vessels. Presented at the Air Resources Board Public Workshop, Sacramento, CA.Google Scholar
  2. Corbett, J.J., Wang, H. and Winebrake, J.J. (2009) The effectiveness and costs of speed reductions on emissions from international shipping. Transportation Research Part D: Transport and Environment 14(8): 593–598.CrossRefGoogle Scholar
  3. Corbett, J.J., Winebrake, J.J., Green, E.H., Kasibhatla, P., Eyring, V. and Lauer, A. (2007) Mortality from ship emissions: A global assessment. Environmental Science & Technology 41(24): 8512–8518.CrossRefGoogle Scholar
  4. Greene, W.H. (2011) Econometric Analysis, 7th edn. Boston, MA: Prentice Hall.Google Scholar
  5. Khan, M.Y., Agrawal, H., Ranganathan, S., Welch, W.A., Miller, J.W. and Cocker, D.R. (2012) Greenhouse gas and criteria emission benefits through reduction of vessel speed at sea. Environmental Science & Technology 46(22): 12600–12607.CrossRefGoogle Scholar
  6. Linder, A.J. (2014) Explaining participation in voluntary vessel emission reduction programs at the ports of Los Angeles and Long Beach. Presented at the Transportation Research Board 93rd Annual Meeting, Washington DC.Google Scholar
  7. MIG, Inc., and ICF International. (2009) Healthy Communities and Healthy Economies: A Toolkit for Goods Movement. Report to the California State Department of Transportation, Los Angeles County Metropolitan Transportation Authority, Riverside County Transportation Commission, and San Bernardino Associated Governments.Google Scholar
  8. Miller, W., Khan, Y., Agrawal, H., Ranganathan, S., Welch, W. and Cocker, D. (2012) In-Use Emissions Test Program at VSR Speeds for Oceangoing Container Ship. Report to the California Environmental Protection Agency Air Resources Board, Contract #08-412, University of California, Riverside.Google Scholar
  9. Snyder, D. (2011) Amend the Green Flag Incentive Program, Under Port of Long Beach Tariff No. 4, Item 262. Memorandum to the Port of Long Beach Trade Relations and Port Operations Committee.Google Scholar
  10. Wankhede, A. (2014) 10 ways to ensure safe slow steaming operation of old marine propulsion engines,, accessed 2 February 2015.
  11. Wooldridge, J.M. (2010) Econometric Analysis of Cross Section and Panel Data, 2nd edn. Cambridge, MA: The MIT Press.Google Scholar
  12. Zis, T., North, R., Angeloudis, P., Ochieng, W. and Bell, M. (2014) Evaluation of cold ironing and speed reduction policies to reduce ship emissions near and at ports. Maritime Economics and Logistics 16(4): 371–398.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd 2016

Authors and Affiliations

  • Celeste Ahl
    • 1
  • Elaine Frey
    • 2
  • Seiji Steimetz
    • 2
  1. 1.Alston & Bird LLPLos AngelesUSA
  2. 2.California State UniversityLong BeachUSA

Personalised recommendations