As schedule reliability is one of the many competitive elements in the shipping industry, the relative performance of shipping companies could partly represent their competitive positioning, according to Sea-Intelligence.
Alan Murphy, CEO of Sea-Intelligence, believes that in a market that is sometimes accused of being purely a commodity, the relative performance of the shipping lines does indeed show quite a level of differentiation.
“This is not only true when comparing the shipping lines against each other, but also when looking at the long-term trends for the individual lines themselves,” pointed out Murphy.
It is noteworthy that there was a lot of differentiation in the early part of the past decade (between 2012 and 2015), but when the industry became seriously loss-making (most notably the pricing war that culminate in 2016), this led to a temporary decrease of this differentiation.
Since freight rates began to skyrocket in recent years, the gap between the most and least trustworthy of the ten major shipping companies has begun to widen once more.
“In essence, it would appear that in favourable market conditions, we tend to see a larger diversity in reliability performance, whereas in times of economic pressure, this leads to a much more uniform performance across the carriers,” said Murphy.
“Shippers seeking diversity in service offerings should avoid markets with extremely low freight rates, as we would most likely see a reversal to 2016-2017 when the difference between the most and least reliable top-10 shipping lines was closer to 5%,” he concluded.
