Shipping industry loses hope of quick rebound

Demand from cargo buyers in the U.S. and Europe is collapsing at an alarming pace. Hopes for a second-half V-shaped rebound are dwindling. Containers already delivered to import terminals are piling up, prompting at least one major carrier to launch a stopgap storage plan.

Lowest schedule reliability ever

Global schedule reliability statistics are compiled by Copenhagen-based Sea-Intelligence, with the latest data through February.

According to Sea-Intelligence CEO Alan Murphy, February reliability fell to 65.1%, “the lowest recorded global score since Sea-Intelligence introduced the score in 2011.”

Furthermore, the average delay for late vessel arrivals rose to five days in February, the highest number seen “outside of the U.S. West Coast labor dispute in early 2015.”

It gets worse

Asked by FreightWaves whether reliability would worsen, Murphy replied, “Yes, I would expect schedule reliability to be very poor in the months ahead and probably drop further.”

The reliability benchmark covers scheduled sailings and does not factor in blank sailings. Nevertheless, the rising number of blank sailings has an effect.

“The disruption from blank sailings impacts the schedule reliability of the sailings that are still in operation, as inducement calls and other tactical measures are hard to do within the existing schedules,” Murphy explained.

Retaining cash flow

“On top of this, everyone is focusing on retaining cash flow, including carriers, and even though bunker [marine fuel] prices are incredibly low, and thus schedule recovery — speeding up — is now much cheaper, I strongly doubt there is any willingness to blow cash on marginally improving schedule reliability when it is already extremely poor and boxes are piling up inland.”

Lars Jensen, CEO of Copenhagen-based SeaIntelligence Consulting (a different company than Sea-Intelligence), also believes reliability is likely to deteriorate. “It will get worse,” he affirmed to FreightWaves.