Shipping Breaks Service Reliability Record
Container service reliability made a big improvement in 2015 and has reached its best ever performance, despite carrier reliability dipping by 1.9% in December, 2015 to 75.3%, according to Drewry’s Carrier Performance Insight report.
The early months of 2015 were negatively affected by the introduction of the new alliance structures that required some time to fully bed-in, and congestion issues at the US West Coast ports of Los Angeles and Long Beach.
Despite a mild deterioration in the final three months of 2015, the year-long reliability average for all trades covered represented a marked improvement on 2014; the on-time reliability for the 12-month period for all trades reached 73%, against an average of 59% in 2014.
Drewry has been monitoring container service reliability for over 10 years and the 2015 on-time average is the highest ever recorded, just surpassing the previous best of 72% set in 2012.
Finding an explanation for the dramatic improvement seen last year is difficult, but our unscientific take is that it is a reflection of the operational improvements brought about by the new, enlarged carrier alliances and that carriers in general are (belatedly) recognising the importance of reliability in terms of marketing and customer retention.
Drewry has found that the gap between the best and worst performing lines has narrowed, with the variation now being around 20%, when it had been much wider in previous years.
In 2015 the carrier with the highest overall on-time performance was Danish carrier Maersk Line, which topped the rankings with a 12-month average of 81%.
In second place was Evergreen with 78.1%, while K Line took the bronze medal with 77.6%. The wooden spoon went to MSC with 58.4%.
A more reliable shipping service can reduce costs in areas such as inventory holding or expedited freight-spend. Often these savings can be greater than those achieved through securing even the most competitive ocean freight rates.
Drewry believes that this new normal will last but that is probably close to the ceiling of what shippers can expect from carriers in the short-to-medium term as most of their attention will go on restoring profitability.
Drewry View: Service reliability appears to be plateauing after making a dramatic upturn in the middle months of 2015. The spread between the carriers suggests there is still room for improvement, but Drewry expects the variance between lines to remain a feature of 2016. Thus, shippers that put a premium on reliable services need to remain selective in their choice of service providers.