The record low levels of carrier schedule reliability experienced last year continued into the first two months of 2019.
According to SeaIntelligence Maritime Analysis, the January-February average on-time performance on the transpacific trade sunk to 38.6% on the US West Coast (USWC), and just 31.5% on the US East Coast (USEC).
“For the USEC, this means that schedule reliability continues to set new records in terms of how low reliability can go,” said SeaIntelligence CEO Lars Jensen.
“If reliability is compared to the same month of the year in order to eliminate seasonality, it means that it is the 6th month in a row the Asia-USEC trade has set a new low record in terms of schedule integrity.”
The poor performance was not limited to any one group of carriers, with all three major alliances posting similar reliability results. This, some commentators claim, would suggest the problem is originating on the landside, and at the ports, rather than necessarily from the carriers’ own operations. However, this doesn’t account for niche carriers Matson and Westwood both having markedly better performance to the USWC at 88% and 79% respectively, noted Jensen.
On the other hand, there is data to back up the claim of port congestion and delays in Asia having a significant impact on carrier schedules.
At the recent TOC Asia conference in Singapore, Jeremy Nixon, CEO of Ocean Network Express (ONE) noted how bad weather – caused by a “remarkable increase” in typhoons – had forced the port of Shanghai to close for 28 days between April-August 2018.
“This is major disruption. Previously, when there were low terminal utilisation levels, you could catch up relatively quickly in terms of operations. But because now the terminals are working at a much higher occupancy, particularly in mainland China, the ability to recover is slow, and that has an additional impact,” said Nixon.
As a result, he said the carrier would adjust its schedules to reduce the number of major port calls in China on a single rotation. For example, instead of a vessel calling both Shanghai and Ningbo, which lie in relatively close proximity, the two ports will be split, with some loops calling fewer ports and others with additional vessels in rotation for “more buffer and recovery”.
One major transpacific shipper said he’d welcome this strategy from carriers, given it would likely boost schedule reliability between China and USWC. Furthermore, he claimed shippers are “willing to pay more if we get better reliability.”
It is, no doubt, a debate which will rage on for some time to come since there are numerous instances where carriers’ “premium” services have failed to take-off due to lack of demand.
However, SeaIntelligence research in 2018 found 49% of cargo owners did not opt for the cheapest shipping option when securing space through a digital booking platform, giving some credibility to the argument carriers have the opportunity to charge more if they can better utilise their brands and improve customer service.
Lurking behind nearly every key issue in container shipping these days is the IMO 2020 sulphur fuel cap, which will see carriers having to use more environmentally friendly fuel with only 0.5% sulphur content. One option is to retrofit containerships with the emissions control equipment known as scrubbers, and around 300,000 TEU per month in 2019 will be removed from the supply pool as the vessels are dry docked to install the equipment, according to Alphaliner.
Andy Lane, partner with CTI Consultancy, told JOC.com this could “screw schedule reliability up a bit further and make supply chain integrity a little harder to forecast.”