Container shippers are paying significantly more for freight while receiving increasingly unreliable services, according to the latest market data from Xeneta. As spot rates continue to soar on routes serving US ports, global schedule reliability has taken a marked turn for the worse.
Worldwide schedule reliability has fallen to 29.4%, highlighting the growing gap between the cost of shipping and the quality of service delivered. The Gemini Cooperation remains the best-performing network, with reliability at 51.8%, although this figure remains far below its stated target of more than 90%.
At the other end of the scale, the Premier Alliance recorded the lowest reliability level at just 15.8%. The Ocean Alliance stood at 27.7%, while MSC recorded a schedule reliability rate of 26%.
Meanwhile, freight rates between the Far East and the United States continue to climb sharply. Peter Sand, senior analyst at Xeneta, said average spot rates from the Far East to the US East Coast have continued their upward trajectory following the outbreak of conflict in the Middle East in February.
“Average spot rates from the Far East to the US East Coast continue their ascent following the outbreak of conflict in the Middle East in February, climbing a further 25% since early July,” Sand said.
Rates to the US East Coast increased by 1.6% week-on-week, reaching an extraordinary $10,910 per feu. Cargo moving towards the US West Coast also experienced a further increase, with rates rising 2.5% and pushing average spot prices to $7,496 per feu.
Since the outbreak of the Iran war on 28 February, spot freight rates have risen by a staggering 289% to the US West Coast and 305% to the US East Coast from the Far East. Freight rates from North Europe have also climbed by 95% over the same period.
Sand expects further upward pressure on the market in the coming weeks as the early October Golden Week approaches.
That outlook is only partly supported by Drewry Shipping Consultants, which pointed to six blank sailings announced on US trade routes for the week beginning 6 September—twice the number recorded the previous week.
Despite the reduction in available capacity, Drewry adopted a cautious position on the outlook.
“With resilient demand and continued capacity management by carriers, Drewry expects freight rates to remain stable next week,” the consultancy said.
While freight rates remain under pressure, schedule reliability has deteriorated considerably. Global average reliability has declined by 3.3% since July.
The Gemini Cooperation, despite remaining the strongest performer, has seen reliability fall by 9.8% during that period. The Ocean Alliance and Premier Alliance have recorded declines of 4.5% and 3.3%, respectively, while MSC’s reliability has fallen by 1.1%.
On the Far East-to-Europe trades, freight rates are also increasing, although the market remains significantly less dynamic than the transpacific and transatlantic sectors.
Since 28 February, rates have risen by 111% to North Europe and 61% to the Mediterranean. Average spot rates now stand at $4,532 per feu for North Europe and $5,073 per feu for Mediterranean destinations.
According to Sand, the peak typhoon season in Asia has had a particularly severe impact on the punctuality of services heading towards Europe. On-time performance on these routes fell dramatically from 47% in mid-June to just 3% by the end of July.
Far Eastern freight services to North America also suffered a significant deterioration, with reliability falling from 38% to 19% over the same period.
Sand said the situation illustrates a recurring contradiction during periods of major disruption in the shipping market.
“But even at its 30-month high, global schedule reliability impressed no one,” Sand said. “It is a strange contradiction witnessed during every major market shock – the more a shipper must pay, the poorer the service.”
