Late again, but who is to blame?

MarineLink.com
Monday, August 12, 2013
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 difference between ETD and ATD is within +/- 1 day, then it is considered as Success case Source: CargoSmart, verified by Drewry

With the peak season now in full flow, cargo rollovers are more likely, but ocean carriers are not the only party to blame.

Cargo no-shows and phantom bookings are still a major headache for ocean carriers, particularly during the peak season. Whilst cargo booked from Asia to Europe was being rolled onto following vessels at the beginning of July due to a combination of unusual circumstances (see last week’s analysis of the Asia-North Europe tradelane for more details), some ships still sailed light due to last minute booking cancellations.

It will happen again as, according to one cynical carrier, roll-overs are only caused by the “usual” level of cargo no-shows being less than normal, and late cargo delivery cut-offs have become a highly competitive feature of most carriers’ sales strategy. Phantom bookings just add to the problem, being the work of forwarders that foresee a strong market, and try to reserve more than enough space for it in the hope of capturing new customers that may eventually be caught short.

The point underlines a continuing inefficiency of deep-sea supply chains which, if resolved, would help counteract the negative side of slow steaming. For cargo to be delivered at destination on time, it has to be shipped on time. The problem is not new, but ocean carriers’ attempts to minimize the damage by imposing heavy penalties still appears ineffectual.

Quantifying this is not easy, as bookings failing to arrive on time can be due to a number of understandable reasons, including delays with intermodal transport, regulatory problems, unexpected production difficulties, container equipment shortages, and feeder vessel schedule failures. If a connecting barge, train or feeder vessel gets held up somewhere, a lot of allocated deep-sea vessel space can end up not being used at the last minute, and, as ocean carriers know only too well, 100% schedule integrity is often destroyed through the mistakes of others.

This makes the strict enforcement of late cancellations fees difficult, particularly as sorting out fact from fiction can be laborious. It is also still a ‘buyer’s market, so much depends on everyone applying similar rules, which is far from the case. Some carriers continue to rely on other less obvious ways of minimizing the damage of last minute booking cancellations, including the blacklisting of repeated offenders.

Table 1 shows that a remarkable 29% of cargo booked in 1Q13 failed to be shipped on time, although this includes delays caused by deep-sea vessels not arriving for loading punctually. This was even worse than the 27% of ships that failed to arrive at destination on time.

For the purposes of this exercise, a shipment is deemed to have been a success when the difference between the estimated date of shipment stated in the original booking confirmation at the first load port and the corresponding actual departure date is within a day. This means that the cargo can still be shipped on the requested vessel, only more than a day late for loading.

On Time Shipment of Cargo
The proportion that failed to be shipped on time was 4% more than in the previous quarter, demonstrating that much more remains to be done. There has been a gradual improvement since 4Q 11, however, which coincides with the time that Maersk started beating the drum over the need for greater penalties for late delivery of bookings, and the strict application of the rules (see graph below).

Since then, ocean carriers have been rolling out penalties for late cargo delivery on a regional basis. For example, at the beginning of this year Maersk’s network of late delivery charges reached Australia, where a penalty fee of $100 per dry container for booking cancellations made within seven days of ETA was introduced.  OOCL’s fee of GBP£250 per container for cancellation requests received less than five working days before arrival of vessel reached the UK on 19 March 2013.

According to Maersk, it still received approximately 2,700 ghost bookings in all tradelanes in the first 22 weeks of this year, totaling around 12,000 x 40ft, but this was at least 50% less than five years earlier. However, instead of being mainly an Asian problem, it has become more global.

At the recent Retail Supply Chain conference in London, it was stressed that the big focus for retailers now is to improve “availability” of products on the shelf or in the store, thereby minimizing lost sales. As slow steaming seems set to stay, or even get worse, this means that further efficiencies need to be wrung out of supply chains. Further minimizing no-shows and phantom bookings would consequently be a good start.

Drewry believes Carriers are struggling to collect booking cancellation penalties from shippers due to too much focus on freight rate levels instead of value added services.

Source: Drewry

ciw.drewry.co.uk
 

  • Measures the difference between Estimated Departure Date of first port of loading stated in original booking confirmation, and the corresponding Actual Date. If the difference between the two is within a day, then it is considered a success (Source: Drewry’s Carrier Performance Insight)

    Measures the difference between Estimated Departure Date of first port of loading stated in original booking confirmation, and the corresponding Actual Date. If the difference between the two is within a day, then it is considered a success (Source: Drewry’s Carrier Performance Insight)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

DONG Energy Listing to Value Group at up to $16 Bln

DONG Energy's has set a potential $16 billion price tag on its stock market debut, giving investors a chance to buy into the growth in offshore wind power, but

Østensjø Rederi Orders Another Wind Farm Vessel

Rolls-Royce has signed a contract with shipyard Astilleros Gondan in Spain to design and equip a second Service Operation Vessel for ship owner Østensjø Rederi.

Prosafe Appoints Interim Chairman of the Board

Prosafe, owner and operator of semi-submersible accommodation vessels, informs that its Chairman, Harald Espedal, has notified the company that he will step down

Ports

Port of Caen Orders Damen ASD Tug 2810

The Port of Caen/Chamber of Commerce & Industry Caen Normandy (Chambre de Commerce et d’industrie de Caen Normandie) has placed an order for a Damen ASD Tug 2810.

Fos Tanker Queue Grows as Strike Impacts Refinery Ops

Nearly two dozen vessels were queued outside the French oil import terminal in Fos, southern France on Thursday, held up by a strike organised by the hardline CGT

Aquino: China Breaks South China Sea Deal

Philippine President Benigno Aquino on Thursday accused China of breaking a U.S.-brokered deal between the two nations on the Scarborough Shoal, an uninhabited rocky outcrop in the South China Sea.

Container Ships

SOLAS Container Weight Requirements FAQ

With new rules regarding the declaration of the accurate gross mass of a packed containers due to enter force, the International Maritime Organization (IMO) answers

CMA CGM Proceeds with NOL Takeover after China Okay

CMA CGM, the world's third-largest container shipping firm, is to go ahead with its planned acquisition of Singapore's Neptune Orient Lines (NOL) after receiving regulatory clearance from China,

Singapore Exchange in Talks to buy Baltic Exchange

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the

Logistics

Lower Large Dry Bulk Rates drag Baltic Index

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Thursday dragged down by lower demand for larger vessel segments.

EGAS: Egypt to tender for 10 LNG Cargoes

Egypt will tender next week to import 10 cargoes of liquefied natural gas (LNG) for delivery in July and August, an official from the state gas company, EGAS, said on Thursday.

Asia Dry Bulk-Capesize Rates Could Climb

More coal cargoes, rising oil prices could support rates. Freight rates for large capesize dry cargo ships on key Asian routes are likely to rise next week on

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1073 sec (9 req/sec)