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Do shipping lines care about reliability?

Jul 17, 2014
It is no secret that container operators are currently fixated on cost savings, but the latest data on ship reliability report from Drewry, supply chain advisors, suggests that carriers are worryingly neglecting the product offering to their customers.

The Drewry report says that containership reliability declined for the fifth consecutive quarter in 1Q13 with the on-time average slipping to just 61%. It highlighted that the falling reliability levels – the worst since 2Q11 - were the consequence of particularly bad weather in Asia and Europe, but that they are also symptomatic of a breakdown in carriers’ network operations.


Drewry’s sample of voyages was lower than normal due to a high number of vessels simply not materialising at the scheduled port or arriving outside of the 4 day early-10 day late ETA threshold to have been included. Drewry suspects that part of the problem is that carriers are shuffling vessels around in anticipation of new alliance and service structures and also that late changes to original schedules are being made in an attempt to balance supply and demand.

Delays in the ocean leg are causing major productivity issues for ports that are unsure when ships will arrive. The inability to plan effectively is causing bottlenecks, lengthening dwell time and reducing storage capacity.

All of these operational inefficiencies add cost to carriers, from longer stays at ports to handling customer complaints, so it could be argued that it is in the lines’ best interests to maintain reliable services. Yet, that message seems to have been lost – it could be that carriers were not willing to speed up vessels to get back on schedule, for cost reasons. Shippers can live longer planned transit times, but not if there are delays in addition to longer planned transit times .


Perhaps the biggest sign that carriers have forsaken reliability as a means to differentiate themselves (and charge a small rate premium) is the worsening performance of Maersk Line, who have been a long-time champion of ship reliability and previously set an on-time target of 95%.


Perennially at the top of Drewry’s reliability rankings, Maersk suffered a steep quarter-on-quarter decline of 10 percentage points in 1Q14 to 70%, still above the industry average but well down on their usual mid-80% score seen in the last two years.


As shown in the chart, the Danish firm’s reliability results were hurt by poorer reliability from its service partners’ ships (ships operated by other lines and on which Maersk takes space). Maersk’s own operated ships had a reliability average of 82%, second best behind Hamburg Süd-operated ships (91%). Drewery said that this clearly does not bode well considering how Maersk will increasingly be at the mercy of its P3 partners and without the market leader to set the example others might slacken.


The focus on reducing voyage costs is helping to keep freight rates low, but the fallout, according to Drewry, does seem to be that service quality is becoming something that carriers are paying less attention to.


More information from


Image Top: Delays in the ocean leg cause bottlenecks and longer dwell times in port; Drewry Ship reliability; Maersk Ship Reliability.

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