Drewry Maritime Research’s new quarterly report Carrier Performance Insight revealed that industry-wide vessel schedule reliability improved to 72.3% in the first quarter of 2012, but carriers’ service standards for some commercial processes remain as low 40%.
Drewry now monitors container carrier service quality monthly or quarterly against 7 Key Performance Indicators or metrics:
– Vessel schedule reliability
– Elapsed time between shipping instruction and bill of lading issue
– On-time shipment of cargo
– Port-to-port transit time against schedule
– Cargo availability at destination port
– Average US inland transit times
– Port dwell times
The latest result represents a 2.9 percentage point improvement on the previous record 69.4% on-time average recorded in the last quarter of 2011 and means that there have been reliability gains in four consecutive quarters.
The most reliable carriers in the period were Maersk Line and its sister company Safmarine, followed by Hanjin Shipping.
For the first time, Drewry has incorporated new Key Performance Indicators, using data from e-commerce platform CargoSmart, that measure commercial and operational performance at the box-level.
The low success rate of the KPI for ‘elapsed time between shipping instruction & bill of lading issue’, showing that roughly only 40% of shippers obtain BLs after three days of submitting the original shipping instruction, suggesting that there is still a lot of work required to improve certain commercial processes.
The variance between carriers’ success rates for this KPI was large, with a range of 0% to 93% across the five months between October 2011 and February 2012.
The KPI for ‘on-time shipment of cargo’ measures whether a box leaves the first port of load as scheduled. This first step is crucial and any delay at this point will inevitably lead to further hold-ups down the chain.
CargoSmart’s data showed a consistent success rate of 66-70% in the same five months. That benchmark score indicates that delays are fairly common even before the box has been loaded on board.
‘Port-to-port transit time against schedule’ tracks whether the sea-transit length was as originally promised. It is not a direct measure of reliability as it is still possible to uphold the confirmed transit time, but be late arriving because of delays at the loading port.
Success rates were slightly better than the previous KPI, but still indicate that roughly one box in four spends longer at sea than planned.
‘Cargo availability at destination port’ is the closest in character to Drewry’s own reliability measure as it looks at the difference between the promised and actual arrival date of the container at the port of discharge.
As this KPI is influenced by the success of the first two benchmarks, it is natural that it has a lower success rate. The preliminary average for the first quarter of 2012 was 57%.
Port dwell times and US inland transits are not a measure of carrier performance as they have very little influence over them. The rationale for their inclusion is simply to provide shippers with extra lead-time transparency.
“Any improvement in reliability should be welcomed, but an average score of around 70% is still far too low for a key service industry to be happy with,” said Simon Heaney, research manager at Drewry.
“Carriers that want to secure new business – essential if they want to fill their big new ships – will have to aim higher than the current benchmark and not rest on their laurels.
“Reliability remains an area that carriers can distinguish themselves from the competition. Shippers can play their part in driving future service quality by putting greater emphasis on reliability and other service criteria in their carrier selections,” added Heaney.
The KPIs included in Carrier Performance Insight are:
Drewry Vessel Schedule Reliability KPIs
Measures the deviation between advertised vessel arrivals at a single destination port against the actual arrivals. A vessel is considered to be ‘on time’ if it arrives on the scheduled day of arrival or on the day immediately before the scheduled day of arrival.
The results are then aggregated by carrier (including slot charters), ship operator only, and by trade.
KPIs using CargoSmart data
All container milestones captured by CargoSmart are derived from customers and carriers (approximately 20 lines) through Electronic data interchange (EDI) and relate only to shipments handled via CargoSmart. The aggregated data for each month is then presented to Drewry to verify. In order to create an industry-wide benchmark, Drewry reviews the data by removing any statistical bias and by ensuring that a minimum number of observations are met for each KPI.
The definitions of and success rate thresholds for each KPI are listed below:
Elapsed time between shipping instruction & Bill of Lading issue
Measures difference between submission date of Shipping Instruction (SI) and receiving date of confirmed Bill of lading (B/L). If the difference between SI and B/L is within 3 days, then it is considered as a Success case.
On-time shipment of cargo
Measures difference between Estimated Departure Date (ETD) of 1st Port of Load stated in original booking confirmation, and the corresponding Actual Departure Date (ATD). If the difference between ETD and ATD is within +/- 1 day, then it is considered as a Success case.
Port-to-port transit time against schedule
Measures difference between Estimated Transit Time (ETT) stated in original booking confirmation and the Actual Transit Time (ATT). If the difference between ETT and ATT is within +/- 1 day, then it is considered as a Success case.
Cargo availability at destination port
Measures the difference between Estimated Arrival Date (ETA) of Last Port of Discharge stated in original booking confirmation and the Actual Arrival Date (ATA). If the difference between ETA and ATA is within +/- 1 day, then it is considered as a Success case.
Average US inland transit times
Measures the average duration in days between Actual Departure Date of Intermodal Leg from Last Port of Discharge and the Actual Arrival Date of Last Intermodal Hub.
Port dwell times
Measures the average duration in days between Actual Arrival Date (ATA) of Last Port of Discharge from trunk vessel, and the Actual Departure Date of Intermodal Leg from Last Port of Discharge.
Drewry is currently consulting industry stakeholders about common definitions of key performance indicators in container shipping and about incorporating additional metrics over time.
Source: Drewry Maritime