Supply chain congestion pushes schedule reliability to record low

Source: Lloyd’s Loading List
Date: 2nd November 2021

Bottlenecks in the containerised supply chain around the world have pushed container line schedule reliability to its lowest level yet, and there are few signs of any rapid improvement.

The latest figures from Sea-Intelligence’s global container line performance database show that just 34.3% of vessels arrived within one day of their scheduled arrival time in September. The average delay across the global fleet was more than a week.

“This means that September effectively saw the removal of 12% of all global vessel capacity from the market due to the delays,” said Sea-Intelligence chief executive. “One way to look at it is to say that this is the same as the global fleet suddenly losing a carrier the size of CMA CGM or Cosco.

“Another way to look at it, would be to say that this is the same as not having any vessels delivered into the fleet since the beginning of 2018 but still expecting that stagnating fleet to carry today’s global volumes.”

While the focus has been on the large number of ships waiting for a berth off the US west coast ports of Long Beach and Los Angeles, where 75 boxships were at anchor or drifting as of Friday, the problems go much wider.

“Most trades show very large increases in delays, indicating that the congestion problems leading to delays are indeed prevalent globally and not isolated to just a few large key trades.”

“It can also be seen that a few individual trades are not impacted, and essentially have the same magnitude of delays as they had before the pandemic.”

Nevertheless, almost all trades have experienced a sharp deterioration in recent months in terms of the magnitude of vessel delays.

“This is a clear indication that the bottleneck problems are indeed widespread and global.”

Schedule reliability was at the lowest point in the third quarter since records began, falling 4.8 percentage points from the previous quarter and down by 30.7 percentage points since the corresponding quarter of 2020.

“This drop was inevitable, as even higher congestion levels due to the third quarter peak cargo season, would have increased the stress on an already heavily stressed supply chain.”

While the problem is endemic to the sector as a whole, there were, however, wide variations in performance between the individual carriers.

Maersk and its Hamburg Süd subsidiary topped the league table, managing to get more than 45.6% and 38.5% of their calls to meet their scheduled arrival time.

At the other end of the scale was Evergreen, where only 13.2% of calls were on time, a level of reliability that was described as “insanely low”.

Nevertheless, all carriers reported falls in reliability, both on an annual and quarterly comparison.

With demand for container slots remaining high, carriers have deployed additional capacity for the fourth quarter. On some trade lanes, this will take capacity higher than it was during the third-quarter peak season.

“This means that carriers are expecting the peak season to continue into the new year.”

“There is also the distinct possibility that shippers will attempt to frontload first-quarter 2022 cargo into the fourth quarter of 2021, in an attempt to beat a presumed Chinese New Year capacity crunch.”

If this did happen, there was a strong possibility that schedule reliability could further deteriorate in the final months of this year.

“This would stress the current supply/demand situation even more, and would potentially lead to increased port congestion, increased waiting times in port, increased delays, and a decrease in schedule reliability.”

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