Schedule Unreliability in Liner Shipping: Origins and Consequences for the Hinterland Supply Chain

Despite claims by shipping lines that most of their containerships operate on fixed-day weekly schedules, a large survey recently revealed that over 40% of the vessels deployed on worldwide liner services arrive one or more days behind schedule. Broadly speaking, the survey found relatively low average schedule reliability levels overall across the industry, but with strong variations between the schedules of different liner carriers and between different trade routes. Low schedule reliability can be caused by a number of factors, many of them beyond shipping lines’ control, and can have serious consequences for various actors in the supply chain. This paper focuses on the impact of decreasing schedule integrity on one of these actors, namely shippers/consignees. More specifically, we present a case study to illustrate the impact of schedule unreliability on the level of safety stock that should be kept by a manufacturer who sources spare parts from overseas. It is shown that an improvement in schedule reliability can lead to significant cost savings for the company under consideration. Maritime Economics & Logistics (2007) 9, 193–213. doi:10.1057/palgrave.mel.9100182