An increase in typhoons and other weather events is a factor in poor schedule reliability for ONE in 2018.
Giving the keynote address at this years TOC Asia conference in Singapore this week,Ocean Network Express CEO Jeremy Dixon said while 2019 is looking like a “reasonable year” on the demand side, the container shipping industry is facing three key uncertainties: global economic growth, the impact of the IMO 2020 Sulphur Cap, and an increase in cyclones and other weather events that disrupt service schedules and port operations.
Of the three the impact of weather is less talked about, but Dixon gave evidence that weather was a major factor contributing to poor service reliability levels in 2018. In 2017 there were eight typhoon events in China and five in Japan. In 2018 those numbers jumped to 10 for China and seven for Japan. “These go straight through the shipping lanes at a slow pace,” said Dixon.
The port that bore the brunt of the weather last year was Shanghai, which was closed for eight days in April 2018, and a total of 28 days over the period April to August 2018. But heavy weather is not just an issue at Shanghai, Dixon noted, with North America also suffering heavy weather and flooding across parts of the rail network last year and other events causing problems in the Bay of Biscay.
Weather is not the only factor affecting service reliability, and Alan Murphy COO and Partner, SeaIntel Maritime Analysis pointed out that 2018 was the worst year for service reliability in some time, with two thirds of Trans Pacific services arriving more than a day late, not all of which can be explained by bad weather. Service metrics for the three alliances, he added, “are really poor, and THE Alliance is the worst of the three.” ONE is in THE Alliance along with Hapag-Lloyd and Yang Ming.
Dixon didn’t deny ONE had problems, but argued that the weather and issues at key locations such as Vancouver, Canada played a big part in the low service reliability last year. ONE is, he added, working hard to address the problems and is taking measures including: building in more buffer time into schedules, deploying more ships on some strings, and reducing the number of ports in China on a single loop. In particular ONE has split some services between Shanghai and Ningbo, instead of having a service call at both ports. This reduces the risk of a wether event delaying two port calls, Dixon added.