2014 was marked with an increase in sailing schedule changes that impact shippers and logistics service providers. We expect increasing sailing schedule changes to continue through 2015, driven by three key dynamics.
First, as more mega-vessels are deployed, they cause a surge in loading and discharging activity and increased pressure on container yard operations. Second, labor slowdowns and stoppages and trucking constraints will continue to impact sailing schedules. Third, bunker fuel prices dropped nearly 30 percent below their peak in 2014. Slow-steaming has been a way to conserve fuel to save costs. If fuel costs continue to drop, carriers may consider partially speeding up vessels to maintain schedule reliability.
We expect frequent sailing schedule changes to continue to cause challenges for shippers and logistics service providers. For shippers, having accurate schedules is critical for shipment planning, booking, monitoring and performance measurement. However, carriers often tightly monitor schedules only for VIP customers. At the same time, few NVOCCs and 3PLs are tracking their shipper customers’ frequently changing schedules to help them improve planning and operations. From the alliance perspective, the 2M, Ocean Three, CKYHE and G6 alliances dominate the east-west trade lanes. We expect alliances to form on the north-south trade lanes to make smoother connections that will cause further schedule changes and challenges.
While sailing schedule changes are unavoidable, we expect technologies to evolve that can reduce the impact on the shipment parties responsible for the cargo. Sailing schedule accuracy will improve by leveraging multiple data sources such as EDI, Internet, Automatic Identification System, and vessel operation information such as weather, tides, berth times, and port congestion. We also see shippers and logistics service providers integrating new sailing schedule intelligence into their processes to gain greater insight and improve shipment management.
Steve Siu, CEO, CargoSmart