Sea-Intelligence has explored how variability in transit time reliability can significantly impact supply chain predictability for importers, regardless of average transit durations.
According to Sea-Intelligence, long transit times do not inherently cause problems for importers, as that can be factored into their lead times; what often creates operational issues is when the actual transit times deviate from the scheduled transit times. This could be deviations both when the actual transit time is shorter than scheduled (potentially extra detention and demurrage charges) or longer than scheduled (potential downstream delays).
One way to visualise these deviations is by looking at the Interquartile Range (IQR) of the transit time deviations. The IQR measures the range within which 50% of the transit time deviations fall. A smaller IQR means that the bulk of the transit time deviations for a trade lane are closely clustered together, whereas a larger IQR signifies that transit time deviations, for the middle half, are more spread out.
For an importer, a lower IQR offers the most predictable transit times. Conversely, a larger IQR value shows that, even for the middle half of transit times deviations, there’s a wider range of possible transit times. This makes planning more complex, as there’s less certainty about where a specific transit time will fall, even if it’s not an extreme outlier. In issue 714 of the Sea-Intelligence Sunday Spotlight, we analysed the IQR for transit times deviations on six trades to South America.
As shown in the figure above, Asia-WCSA has the smallest IQR of the six major trade lanes connecting South America, which means that the middle 50% of transit time deviations fall within a very narrow window of just 1.01 days (1.95 to 3.05 days). On the other end, ECSA-NEUR, with an IQR of 2.69 days, shows that 50% of its transit time deviations are spread across a relatively wide range, from 4.33 to 7.02 days. This indicates a high rate of variability, making it the least predictable in terms of how tightly clustered its typical transit times are. Although the median transit time deviation for the trade lane was also the highest, this IQR also shows that even the “typical” transit times have a significant spread.
