A recent analysis from Sea-Intelligence has revealed that schedule reliability is a crucial factor in determining the competitive positioning of shipping lines.
The analysis found that while the shipping industry is often considered a commodity market, there is a significant level of differentiation in the reliability performance of shipping lines. However, this differentiation fluctuates depending on market conditions.
Between 2012 and 2015, there was a lot of differentiation in reliability performance, but the price war of 2016 led to a temporary elimination of this differentiation.
In recent years, as freight rates have risen, the difference in reliability performance between the most and least reliable of the top 10 shipping lines has started to increase again, according to Alan Murphy, CEO, Sea-Intelligence.
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The analysis suggests that market conditions have a significant impact on the level of differentiation in reliability performance between shipping lines.
Favourable market conditions tend to result in a “larger diversity in reliability performance, whereas in times of economic pressure this leads to a much more uniform performance across the carriers”, added Murphy.
Sea-Intelligence finally notes that shippers who want a diverse range of service offerings are advised not to hope for markets with extremely low freight rates, as this could lead to a reversal to 2016-2017, when the difference in reliability performance between the most and least reliable top-10 shipping line was only 5 per cent.
