Maersk to Compensate Shippers for Late Cargo

Maersk to Compensate Shippers for Late Cargo

Maersk Line is setting a standardized cut-off time for cargo being loaded on vessels on its Asia-Europe services, and the world's largest container line will pay shippers an unspecified compensation if delivery is late.

The company’s promise to pay compensation for any shipments that are not delivered to Europe on time amounts to the first step taken by Maersk Line to substantiate the call last June by CEO Eivind Kolding for radical changes in the way the container industry conducts business.

The Danish comapny said the service, known as “Daily Maersk,” will have a common daily cut-off time for all of its 70 vessels operating between four ports in Asia (Ningbo, Shanghai, Yantian and Tanjung Pelepas) and three ports in Europe (Felixstowe, Rotterdam and Bremerhaven).

Maersk, which usually ranks first among the 20 largest carriers in Drewry’s quarterly “Schedule Reliability Insight” for most of the last four years, said it is introducing the fixed cut-off time in order to provide frequency and reliability.

“A daily service between Asia and North Europe with reliable on-time delivery will change liner shipping forever,” it said in its statement Monday. “Up until now, customers have had to adjust their production schedules and supply chains to accommodate shipping lines’ unreliability, as they have never been able to trust that their cargo would be on time.”

The new daily cutoff time will enable Maersk to provide what it called “a giant ocean conveyor belt for the world’s busiest trade lane.” The daily-cut will allow customers to ship cargo immediately after production without having to pay for storage.

“We set out to design a service that takes the stress out of our customers’ lives, to change shipping from the weakest to the strongest link in the supply chain. After all, shipping is only around 2 percent of our customers’ total cost. And yet our unreliability has until now forced them to shape their production plans and inventory around it,” Kolding said in the statement Monday.

“The lack of on-time delivery costs our customers large sums of money because it makes shipping more of an art than a science. Companies have to make up for an unreliable supply chain; they are forced to build a buffer in their supply chains and lose income when goods are not on time,” Kolding said.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.