Insights by Auba (Nov 7th): Carrier Reliability (and why it fails)
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Carrier Reliability Still Struggles
In a year plagued with major disruptions , the world’s largest ocean carriers are struggling to deliver shipments on time. A pattern that goes back to early 2023 and suggests the best transportation companies in the world have struggled to meet their expectations ever since thew COVID-19 pandemic came to an end.
Despite the world's largest ocean carriers controlling nearly 86.5% of global container volume, their on-time performance has plummeted. Data from Sea Intelligence highlights that average carrier reliability stands at just 54.4% for the first half of 2024—and average delays are now over five days.
That same dataset suggests Hapag-Lloyd is now the most reliable carrier in the world with a 55.4% reliability score. This is a drastic jump. Last year, Hapag-Lloyd was the 10th best carrier of a total of 15 companies considered. Meanwhile, ZIM ranks the wost of all considered, with a score of at 44.4%. Notably, many major carriers, including industry leaders like Maersk and MSC, saw double-digit declines in reliability this year, a significant drop compared to prior performances. Maersk and Hamburg Süd—now a Maersk subsidiary—, were surpassed by Hapag-Lloyd, after years of holding the top position.
Read more below:
The Week in Short
?? The global container shipping market saw an average of only 0.7% of its fleet commercially idle from January to October, despite a 30% fleet capacity expansion since 2020, indicating resilient demand amid supply chain disruptions. Analysts suggest that increased fleet employment has been driven by volume growth, rerouted services via alternative paths, and delays from events such as extreme weather (more on Sea Trade Maritime ).
?? Container Trade Statistics (CTS) data for September reveals a 5.9% global drop in container volumes compared to August, with significant declines on the Far East-Europe route (down 13.5%) and the transpacific eastbound trade (down 9.1%), reflecting an early peak season in July and August (more on Load Star ).?
?? October saw an 11% year-over-year increase in global air cargo demand, with average spot rates per kilogram rising by 19% to $2.68, according to Xeneta. Despite disruptions from weather events and port strikes, the air cargo sector showed stability and resilience (more on Supply Chain Dive ).
?? Boeing factory workers in Seattle ended a seven-week strike by voting to accept a contract that includes a 38% wage increase over four years, a $12,000 ratification bonus, and productivity bonuses, though it does not restore a frozen pension plan. The strike cost Boeing an estimated $50 million per day (more on AP ).
?? A UN report reveals that Houthi forces are generating up to $180 million monthly from ship operators paying for safe passage in the Red Sea, diverting billions in potential revenue away from the Suez Canal. Meanwhile, Houthi leaders have threatened action against ships with ties to Israel, even if these vessels undergo re-flagging or changes in ownership (more on Sea Trade Maritime ).
???? Egypt’s economy has reportedly taken a $6 billion hit due to reduced Suez Canal traffic amid ongoing Houthi attacks on Red Sea, according to Egypt’s foreign minister. The Houthis have declared they will continue to target vessels financially tied to Israel, broadening their attacks to vessels of various nationalities, Suez Canal traffic has dropped by 60% since these attacks began (more on Load Star ).?
That is all for this week, but make sure to follow Auba to stay up to date on all things supply chain and logistics