Chronically late deliveries have suppliers losing faith in ocean carriers

Whether through the air, by road or over the water, merchandise for eventual purchase flows through a variety of channels, but one of those channels is proving to be increasingly unreliable for those scheduled to receive shipments, according to the results of a new report.

In the month of October, schedule reliability among ocean freight carriers stayed below 40% for the sixth consecutive month. According to the Global Liner Performance report, a monthly analysis carried out by Sea-Intelligence that tracks 60 carriers and nearly three dozen trade lines, the schedule reliability index in October reached 34.4%. While that's a notch up from September, rising 0.4%, it's down 18 percentage points from the 52% seen a year ago.

Alan Murphy, chief executive officer for the analytics and advisory services firm, said there are some modest signs of optimism.

"The average delay for late vessel arrivals [has] improved marginally, dropping to 7.34 days, albeit still the highest figure for this month, which has been a theme throughout 2021," Murphy said in a press release.

Not too long ago, goods arriving on time by way of the sea was a veritable lock, with the measure reaching a high of 83.5% in June 2019, based on Sea-Intelligence data compiled by Supply Chain Dive. But the reliability of items reaching their destinations as originally forecast has tumbled fairly consistently since then, particularly in the second half of 2020.

This reality has contributed to the boatload of issues shippers are facing, said Sri Laxmana, vice president of global ocean product for the Minnesota-based logistics firm C.H. Robinson.

"Poor schedule reliability, coupled with high consumer demand, has handed shippers and forwarders a myriad of challenges," Laxmana told Supply Chain Dive.

Trucking is the dominant method of freight movement in the U.S.

Trucks hauled over 80% of freight in 2020
Where possible, those on the receiving end of these deliveries aim to diversify the means by which items arrive. While the sea may be and remains a major thoroughfare, especially for big box retailers, trucking has long been the dominant method. It maintained that status in 2020. Trucking also brought in 80% of the revenue transportation companies were paid to move freight last year, according to the American Trucking Associations. In terms of weight, this equated to 10.23 billion tons, dropping from 11.84 billion in 2019. On a share basis, trucks typically account for around 72% of the tonnage that's carried.

Shippers also relied more heavily on air transport in 2020, with air cargo demand rising 3% on a year-over-year basis, according to Clive Data Services. Greater demand pressed air cargo rates higher as well, jumping 37% from 2020 and 155% versus October 2019.

The slowness and diminished reliability of shipments by way of the sea traces back to the congestion at the ports. From not enough truck drivers to an insufficient amount of containers drivers need to transport goods, bottlenecks at major shipping ports have created supply chain challenges that are rippling across the economy. The question is when the logjam will relent.