HONG KONG CONSULTANT: OCEAN CARRIERS OVER-STATE SCHEDULE RELIABILITY

HONG KONG CONSULTANT: OCEAN CARRIERS OVER-STATE SCHEDULE RELIABILITY    There is a gap between advertised transit times and actual transit times, and ocean carriers over-state the level of reliability of their services, a consultant in Hong Kong said.
   “Clearly some of the shipping lines are grossly misleading their customers,” said Kim Balling, head of Econships Ltd. and a former senior executive of OOCL. Schedule unreliability is costing world trade “billions of dollars every year,” he added.
   For example, Balling said that 66.3 percent of sailings from Europe to Singapore arrived on the scheduled day in 2000, as compared to 64.5 percent in 1995.
   At any given time, about $50 billion dollars of inventory is on the ocean, according to Balling, and voyage delays add to inventory-carrying and cash-flow costs.
   The consultant cited statistics showing that ocean carriers’ ontime reliability ranges from 50 percent to 91 percent on the Asia/Europe trade.
   “Carriers that have invested in quality should capitalize on this,” he said. He urged ocean carriers to either apply premium rates for justified quality, or discounts for service failure.
   Balling added that carriers also need to move away from the “self-imposed ‘commodity’ mindset.”
   A survey by American Shipper of transpacific service reliability during the summer of 2000 found that the percentage of ontime vessel arrivals ranged from 13 percent for the worst services to 100 percent for the most reliable.