Interview with an expert
with Janette Page
What’s happening in the Ocean Cargo industry as carriers battle to restore the Supply & Demand balance?
Recent headlines suggested that Carriers service reliability fell to its worst level in 12 months this February, the average on-time performance slipping by 7 percentage to 62.7% across the 10 global trade lanes.
How does that effect each market?
The Asia-Europe, Transatlantic and Transpacific were the worst affected with reliability being further exacerbated by the effects of the Chinese New Year, where carriers cancelled 30 sailings in February alone on just the Asia to Europe trade.
Is this expected to be a long-term issue?
March is expected to show a slight month on month improvement but for On-Time averages over the coming months, performance is expected to remain below the performance levels of the second half of 2015. Further re-structuring, in the removal of capacity and suspension of services as part of a total re-alignment by the carriers, will only further impact in the coming month’s reliability and service continuity.
How does this influence the choice of Carrier?
A reduction of capacity will lead to disrupted services. Whilst ‘all-time-low’ freight rates continue to dominate the market, particularly on the FEWB trade, we recognise the importance of reliability as a key influencer when making the right carrier choice for our customers.
Is it the best time to benefit from artificially cheap pricing and Carrier losses?
In my opinion, No. We need to help restore a stable basis for the future. Additionally, On-Time arrival performance is paramount when taking into account the ‘overall’ operating cost and management resources utilised.
So cheap isn’t cheerful?!
We hear so often from within the market that savings made by profiteering from the ‘cheapest’ Carrier are usually eroded by the impact of poor service and performance. The cost of longer transit times, potential disruption and dissatisfaction need to be considered and monetised. We will always put our customer’s best interests first and maintain a high quality service.
Janette Page is Ocean Product Manager for Region3 with NNR Global Logistics. You can contact Janette via email@example.com