Liner Reliability Sinks, Study Cites Cost Cutting

Container ship reliability has been on a down turn for over a year, and is slated to only get worse according to researchers at Drewry. Liner service reliability has worsened in every quarter of 2013. With the fourth-quarter decline, the on-time average was below 64%; the lowest it has been for two years (61% in 3Q11). Compared to the same quarter in 2012 , the trade average was down 11.4 percent, when they averaged a peak of 75.2% in the fourth quarter. Based on this data, Drewry is advising shippers that they should expect container ship reliability to slip even further this year.

“The focus on reliability seems to have been lost in the current cost-cutting environment. Shippers are now paying more for poorer services,” said Simon Heaney, senior manager of supply chain research at Drewry.

Shippers are very aware of the declining reliability, which in turn could hurt carriers when they seek general rate increases. Mr Heaney continues, “Shippers know that lines are saving money, so they will be unwilling to accept further rate increases. This could provide an opportunity for more reliable carriers to secure better rates.”