Picture by Arjan van den Berg for Unsplash
Carrier reliability is likely the most important metric to international logistics. When you are trying to get products from one end of the world to another, your biggest concern as a company is whether or not they will arrive on time. Based on that estimate, you can plan ahead the rest of your supply chain, and ensure your end customers will receive products in time.
Given the importance of trust in logistics, this week we wanted to look at the topic in close detail. More specifically, we wanted to understand how reliable our global supply chains were and how much could we trust them in times of great stress? The answer: not as much as you’d expect.
To start, it is worth noting why maritime logistics are so important (hence our focus on maritime carriers going forward). Our entire commerce strategy is built on the back of container ships, which carry roughly 90% of the world’s cargo every year. Why? In great part because containerships are the most cost-efficient way to transport goods, and the only means we have available to carry tens of thousands of containers in a single vessel.
Yet, even though the bulk of global trade has been carried by sea for the last century, we continuously struggle to deliver products on time. In fact, when looking closely at existing datasets on the matter, we found that roughly 10.04 million containers in the world are expected to arrive with some form of a delay if we use estimates from 2023—that is equivalent to 33.2% of the total containers available on the planet. If we were to use 2024 estimates—which, thus far, are not available with the needed breakdowns for such calculations—, the number is likely to be much higher.
Estimated Share of Global TEUs with Delays
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(Data from Alphaliner and Sea-Intelligence)
To find the figure above, we compiled publicly available data from Sea-Intelligence which, over the years, has provided the most accurate estimates on the reliability of the world’s largest carriers. Their estimate looks precisely at the question we wanted to answer: of all shipments in the world, which share will arrive on time?
The first finding from their data is that, quite surprisingly, global reliability of carriers is rather low. As of April, 2024, the average carrier would deliver a container on time in just 52.1% of occasions. That means that, on average, half of all shipments in the world are expected to arrive with some form of a delay.
As the figure below shows, this hasn’t always been the case. In pre-pandemic times, carrier reliability was consistently above 75%—meaning that 75% of all shipments arrived on time. Yet starting in 2020, reliability took a drastic fall to as low as 30.40%. By 2022, on time deliveries began to climb once more but, before reaching their pre-pandemic levels, they soon began to collapse closer to 50%.
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(Data from Sea-Intelligence)
In great part, this is due to a number of large disruptions taking a hold of global supply chains from Houthi rebels attacking incoming vessels in the Red Sea, to the Panama Canal living through a historic drought. Not to mention the potential strikes of US East Coast dock workers and the looming possibility of increased tariffs if Donald Trump becomes president. Put together, all of these events have managed to reverse the downward trend in the average delays for most shipments in the world.
At the height of the COVID-19 pandemic, shipping delays had reached highs of up to 7.95 days, before falling back to just 4.3 days in April of last year—still very meaningful that the average delay time in the world is well above 4 days, and, at times, creeps close to a full business week. At the start of 2024, however, delays grew back again to 6.18 days on average. Since then, recent numbers from April do suggest global delays are once again at 4.74 days on average—which is still higher than pre-pandemic levels.
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(Data from Sea-Intelligence)
Looking at this data, it would be reasonable to wonder if there is large variance amongst the top shipping companies. That is, if there are some shipping companies that are spoiling global averages while others significantly outperform the rest. In other words: do some shipping companies receive higher carrier reliability than others?
Broadly speaking, the answer is yes. Once again, using Sea-Intelligence data, we are able to compare the top 14 carriers in the world including some household names such as Maersk (and its subsidiary, Hamburg Süd), MSC, and COSCO. Put together, these 14 companies account for roughly 86.7% of all containers currently at sea.
For 2023—the last year for which a composite reliability score is available—there is an ample spread of reliability—18.7 percentage points to be precise—that separate the least reliable carrier (Yang ming; 50.7% reliability) from the most reliable (Hamburg Süd, 69.4% Reliability). Considering that the average reliability for global shipping in 2023 was 62.06%, this means that just four carriers were above the global trend for delays: Hamburg Süd, Maersk, MSC, and CMA CGM. Since, moreover, Maersk acquired Hamburg Süd, this means that, effectively, just three carriers managed to beat global trends. Yet even when looking just at the most reliable carriers, we notice that all fail to deliver shipments on time at least 30% of the time.
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(Data from Sea-Intelligence)
To calculate the expected number of containers with delays earlier in this essay, we actually used the data from the figure above. Firstly, we looked at the reliability of top shippers for 2023, and multiplied that by the number of containers currently in the fleets of each major shipper as accounted by Alphaliner. This gave us the number of containers that would be expected to arrive on time if 2023 patterns were to be repeated and, at the same time, the share of containers expected to be delayed: 10.04 million, as outlined before. However, since 2024 already experienced a number of large trade disruptions, the real number is likely to be much higher.
What’s even more interesting about Carrier Reliability is how variant it tends to be year to year. Although, in recent years, Maersk has taken the lead, it is a relatively recent phenomenon. As the bump chart below suggests, the top carrier in terms of reliability can vary greatly from year to year. While in 2017 and 2018, Wan Hain and ZIM both held spots amongst the top 5 carriers, they are now both further down in terms of reliability.
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(Data from Sea-Intelligence)
All this shows just how variant the world of trade can be for companies seeking to plan further ahead. Even in the best of times, the most reputable shipping companies will arrive late 30% of the time—and when they do, on average, those delays will last some four days.
At Desteia, we are on a mission to build the needed tools to help you, as a business, better understand this data and plan accordingly. Carriers are not perfect. They have to deal with hundreds of eventualities as they ship products all across the globe. What matters is to know the magnitude of these flaws and to start acting accordingly.