How declining vessel schedule integrity impacts shippers/consignees.

How declining vessel schedule integrity impacts shippers/consignees.

Ocean carrier’s vessel schedules have become increasingly less reliable in recent years.  One carrier reported a drop from 78% vessel on time arrival performance on their transatlantic vessels between April and June 2013 to only 35% between January and March 2014. The results to shippers/consignees have meant delays with receiving important supplies for manufacturing and retails sales, extra costs for trucking and demurrage upon arrival and increased frustration with the steamship lines.

The main causes are:

• Steamship lines paying less attention to the accuracy of their schedules.
• Cost cutting by carriers resulting in less customer service assistance checking sailings and arrivals and providing this information to their customers.
• Increased vessel size resulting in longer berthing times at ports.
• Increased congestion at ports as international trade rebounds.
• Insufficient infrastructure resulting in further delays.
• Vessel slowdowns to reduce fuel costs.
• Severe weather.

As you can see from the below statistics for East-West ocean trade the situation in the transatlantic was particularly bad between January and March 2014.

The issue is compounded by rail delays with containers missing vessels due to rail delays:

The inaccuracy and poor performance has the following results when we consult with our customers:

• Customers using lean manufacturing have down/limited production lines.
• Retailers using just in time goods not being available for sale. Worst case scenario empty shelves.
• Customers having to increase inventories to protect themselves.
• Goods not arriving for trade shows.
• Difficulty in scheduling truck power for deliveries as actual arrival dates are not reliable.
• Extra demurrage charges due to lack of truck power to handle deliveries on short notice.
• Increase in air freight spends for emergency shipments to keep manufacturing lines open.

Unfortunately there is no immediate solution to these problems in the current shipping environment. We recommend to customers they do not use budget carriers for time sensitive shipments and try to avoid transshipments where possible. Some customers would benefit from having slight increases in inventory or increased shipping frequencies so more product is moving at a given time. An example would be order one container a month rather than two every two months or change to more frequent LCL consolidation shipments.

Should you have any questions regarding your supply chain please feel free to contact us for further guidance and solutions.