When Danish research analyst SeaIntel released its ocean carrier reliability report for June, it revealed an interesting — and, for shippers, a potentially ominous — trend: Carriers are arriving at port on schedule much more regularly, but the cargo they handle isn’t reaching its destination at store doors or factory floors at anything close to scheduled delivery times.
Carriers have been trying to improve their schedule reliability because they can reduce costs by being more punctual, SeaIntel said in its Global Liner Performance report. Better on-time delivery reduces the cost of demurrage and other handling exceptions.
Carriers met their schedules an average of 81 percent of the time globally in June — the same as in May — but the containers unloaded at ports around the world only arrived at their ultimate destinations 64 percent of the time. That was still a 3 percentage point improvement over May, however.
The gap between the time a container arrives at a port and the time it arrives at its ultimate destination is a new element SeaIntel introduced in its July report through collaboration with INTTRA, the online container booking service launched by ocean carriers but now majority owned by ABS Capital Partners.
SeaIntel’s report uses data from the more than 800,000 individual container status messages INTTRA collects each day to report on vessel schedule reliability and the performance reliability of individual container shipments from the time they leave their point of origin until they arrive at their destination.
“What has been missing so far in the marketplace is that when a carrier and a shipper have a discussion on service quality levels, the only measurement they have had until now is on the vessel reliability, and the challenge with that is that it is not very actionable,” SeaIntel CEO Lars Jensen said.
The gap between vessel reliability and container delivery performance can be seen in SeaIntel’s analysis of the eastbound trans-Pacific trade. Vessels arrived on time 83 percent of the time in June, but the containers were only delivered on time to their destination 77 percent of the time. In the Europe to Australia-New Zealand trade, vessels arrived on schedule 88 percent of the time, but only 36 percent of the containers reached their destination on time, SeaIntel’s analysis shows.
“A vessel can arrive on time, and that’s perhaps a good indicator of performance, but no one has been able to speak about the container delivery time until now,” INTTRA CEO Ken Bloom said. “It gives you actionable information about your container.”
SeaIntel makes the information available to subscribers within two weeks of the end of every month. “We take all the data that INTTRA has and aggregate it on trade-lane level and country-to-country levels to show what we see in terms of developments in container delivery reliability vs. the vessel reliability that we are already tracking from one month to the next,” Jensen said.
SeaIntel uses the INTTRA data to analyze market trends, while INTTRA, which makes the information online where it is available to its OceanMetrics users, provides the information on an individual shipper and carrier level.
In terms of broad market trends, SeaIntel’s July report found 11 carriers had more than 90 percent reliability in their June performance, the same as in May. It also found the carriers at the low end of the top 52 carriers it covered improved their performance from May to June. In May, five carriers met their schedule reliability only 20 percent of the time or less, while in June, this level of performance was recorded for only one carrier, Turkon Line.
Geneva-based Mediterranean Shipping Co. improved its on-time performance from 60 percent to 73 percent in the first half of 2012, the report found. The improvement was most notable in MSC’s Asia-Mediterranean trade where schedule reliability jumped from 19 percent at the beginning of the year to 62 percent in June. That places MSC’s performance in line with the median in the trade.
“Hence, if this is sustainable, we might this year be witnessing MSC’s transformation from a carrier known for its low schedule reliability to a stable performer in line with the other main carriers,” the report said.
At the level of the individual container shipment, INTTRA’s OceanMetrics service gives carriers and shippers the data they need to improve performance or adjust schedules. “We can provide to Shipper X or Forwarder Y his specific on-time delivery for whatever time period at whatever port for each and every one of his carriers, and we’re providing to a carrier how he is doing for each and every customer against that carrier’s competition,” Bloom said.
Delivery reliability, he noted, is more a function of data quality than it is about delivery time. “A carrier can now get information on this trade lane that says, ‘You are consistently three days late, so why don’t you adjust your schedule to provide a delivery time that gives you those three days?’” Bloom said. “We can help them do that because we have all that information.”