Liner Schedule Reliability Plummets as Red Sea Diversions Grow

Singapore freight forwarders – Star Concord
30-Jan-2024

 

The security problems in the Red Sea which forced container lines to start diversions in mid-December are taking a toll on schedule reliability. Schedule reliability had its largest decline in nearly three years in December, breaking the positive trend in 2023 and marking the second consecutive month of decline.

The attacks by the Houthi began in mid-November 2023 but at first, involved only a few containerships. However, on December 14 and 15, they targeted container vessels operated by Maersk, Hapag-Lloyd, and MSC Mediterranean Shipping Company, triggering the container carriers’ broad decision to reroute most vessels around Africa. By mid-January 2024, Container xChange, an online platform for container logistics, was calculating that 500 out of the 700 containerships scheduled to transit the Suez Canal and the Red Sea had diverted.

“Amidst the Red Sea crisis, global schedule reliability decreased by 5.0 percentage points month-over-month to 56.8 percent in December 2023 – the largest M/M drop since February 2021,” highlights Alan Murphy, CEO of Sea-Intelligence, a research and advisory company based in Denmark. “With this, December 2023 schedule reliability was the second-lowest of 2023.”

For most of 2023, the carriers have been achieving steady improvement bringing schedule reliability back toward pre-pandemic norms. Historically averaging better than 70 percent and sometimes reaching 80 percent on schedule performance, the liner industry fell to a low during the pandemic and surge in volumes where only a third of schedules were considered to be reliable with carriers citing port congestion and backlogs moving boxes to and from their destinations. Between February and November 2023, more than 60 percent schedule reliability was broadly achieved according to Sea-Intelligence’s analysis across 34 different trade lanes and 60-plus carriers.

The report highlights that on a year-over-year level, schedule reliability in December 2023 was only 0.4 percentage points higher than in December 2022. Carriers had only gone above the 50 percent level in October 2023 after 22 months and the absolute low in January 2022 with just 30.4 percent schedule reliability. 

“Due to the round-of-Africa sailings, the average delay for late vessel arrivals deteriorated,” points out Murphy. They calculate that the delay increased by a third of a day versus November 2023. Late arriving vessels are now on average 5.35 days behind schedule. The industry had been able to bring down the average delays to around 4.5 days in 2023 which was more in line with historic levels after peaking at delays of eight days at the beginning of 2022.

The performance among the individual carriers follows a similar pattern with a strong fall-off in December. After reaching an average of 60 percent schedule reliability in November, the top dozen carriers fell back to 53 percent in December with all 13 major carriers showing a month-over-month decline.

Evergreen was the most reliable top-13 carrier in December 2023 with schedule reliability of 63.6 percent, followed by CMA CGM. as the only two carriers above the 60 percent mark, according to Sea-Intelligence. Large carriers including MSC, HMM, and Zim each lost better than 10 percent schedule reliability along with Asia-based carriers including Wan Hai, PIL, and Yang Ming. Maersk and Hapag-Lloyd reported in the new Gemini Cooperation they would be aiming for 90 percent schedule reliability but in December 2023 both carriers began diversions. Maersk achieved just 59 percent across its fleet while Hapag was near the bottom of the top carriers with just 50 percent schedule reliability.

Major carriers expanded their diversions away from the Red Sea in the second half of December and into 2024. Maersk briefly explored resuming some service but again pulled away after one of its vessels was attacked on December 31. Executives have said they expect months of disruptions taking a cautious approach to returning to normal routes.
 

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