The continuous unreliability of the maritime freight industry is pushing freight in a new direction upwards. As shippers experience losses due to transit delays, billions of dollars are getting spent when that money could be staying in shippers’ pockets. A new study from the Copenhagen-based Sea-Intelligence highlights the losses are caused directly by the lack of schedule reliability.
To carry out the study, Sea-Intelligence coupled the total regional traffic flows from Container Trade Statistics with the underlying detailed reliability measurements at a trade lane level (CTS).
The analysis is based strictly on the time delays caused by late deep-sea boats. Additional delays are not included, such as those brought on by skipped feeder connections, or protracted port waits for cargo release or pickup. The investigation solely looked at deep-sea cargo rather than intra-regional cargo. After honing in, using the underlying data, researchers estimated the number of teudays lost due to late arrivals.
The study showed the pre-pandemic baseline average of 8m teudays per month and emphasized the worsening industry. As the industry grew more aggravated in January of this year, the study saw the pricing peak to its worst with a high of 70m teudays. The latest statistic available goes back to March, showing less of a deficit; however, it still notes the out-of-character measure of 57m teudays lost per month.
After concluding, Sea-Intelligence argued that the loss of 31 teudays in January is equivalent to having one teu inventory of goods sitting idle for the whole month. Pre-pandemic due to shipment delays, the average permanent inventory was 260,000 teu worldwide. However, the study shows that a result of the supply chain delays was a spike in pricing, leaving the present level at 1.8m teu.
The current, record-breaking delays are taking part in a domino effect. As some vessels haven’t arrived on time due to a surge of contributing factors, ships are forced to hold inventory longer than usual.
Overall, holding inventory for more extended than anticipated can lead to financial losses. The model created by Sea-Intelligence based on the current delays of cargo at sea shows a loss of $5bn to $10bn.
