Newsletter Issue16 AW Copy

Issue 16 February 2014 Innovating Shipment Success Through Intelligent Visibility

WELCOME to the February issue of CargoSmart’s Innovating, a monthly, complimentary e-newsletter for the ocean shipping industry. Innovating is designed to ABOUT INNOVATING provide insights about cargo delays around the globe CargoSmart is creating a whole that you may find useful to improve your daily operations and strategic planning. new visibility model for ocean January 31, 2014 marked the beginning of the Chinese New Year. This month, we shippers and logistics service feature three articles analyzing port, vessel, and schedule performance in China. providers to monitor their shipments. The rules of the Last year, we reviewed the performance of four ports in China to see if the game are changing in the Chinese New Year had an effect. We found that there was an increase in delays in global shipping and logistics the weeks leading up to the holiday. This month, we took another look at the industry. CargoSmart’s effect the holiday had on delays. We discovered the same pattern leading up to innovative methods o er the holiday this year, with a slight increase in delays. insights for the industry to Our second article on China compares the performance of the ports in the north manage their shipments that and south of China in December and January. The four ports we analyzed varied have exceptions. CargoSmart’s in size, location, vessel arrival delays, and berth times. We found that berth times monthly, complimentary correlated with port size, while arrival delays varied among the ports. Innovating newsletter delivers refreshing insights for you to Our third article on China provides transit time performance along the make intelligent decisions for Europe-China trade lanes. We measured the transit time deviations, percentage of on-time vessels, and top performing port-pairs for nearly 700 vessels. your supply chain.

Among the vessel and port incidents that caused delays around the world in January, we analyzed the effect that the nationwide strikes had on vessels in Brazil. Berth time increased during the strike on January 24, indicating that the CONTENTS strike may have had an effect on port performance. • Welcome 1 We invite you to share your delay experiences with us on our visibility blog at • Chinese New Year Effect 2 visibility.cargosmart.com/blog or by email at [email protected]. • North and South China Ports 3

Graham Collins • EU-China Schedule Reliability 5 Executive Editor • World Incidents 6 • Contact 7

CHINESE NEW YEAR 2014, YEAR OF THE HORSE: IMPACT ON THE GLOBAL SUPPLY CHAIN

Last year, we analyzed the impact of the Chinese New Year on were delayed more than 12 hours, while 30% of the vessel four China port facilities. We found that delays increased slightly arrivals were delayed over 24 hours. A summary of the results in the weeks leading up to the holiday. This year we analyzed the are shown in Figure 1. inﬂuence the holiday had on vessel delays to see if there was a similar eﬀect. Total Unique Vessel Arrivals 4,935

Delayed Vessels (Delay > 12 Hours) 2,418 (49%) 30% of Vessels Delayed Over One Day Delayed Vessels (Delay > 24 Hours) 1,458 (30%) Similar to last year, we reviewed the performance of four Figure 1: Abstract result of unique vessel arrivals covering four China popular ports in China — Ningbo, Shanghai, Shekou, and ports and 21 carriers from December 15, 2013 to January 24, 2014 Yantian — before the Chinese New Year. From December 15, 2013 to January 24, 2014, we monitored 4,935 vessel arrivals at Figure 2 shows the details for Ningbo, Shanghai, Shekou, and these four ports. By analyzing the data and comparing the Yantian ports. The results show that the busiest port, Shanghai, actual time of arrivals with the estimated time of arrivals of the had the most severe delays with an average arrival delay of up coastal schedules provided by the carriers, we found that to 35 hours. Reasons for the delays included port congestion, before the Chinese New Year, nearly 50% of the vessel arrivals terminal productivity, and berth availability.

Ningbo Shanghai Shekou Yantian

Unique Vessel Arrivals 1,185 2,006 1,196 548 Average Delay (Hours) 27.55 35.01 20.23 18.94 Percentage of Vessel Delays (> 1 Day) 28.86% 42.57% 21.49% 23.91% Figure 2: Four China ports’ performance covering 21 carriers from December 15, 2013 to January 24, 2014

The weekly port performance chart in Figure 3 shows that More Vessels Delayed Over One Day in 2014 starting from the middle of December, the vessel delay time than 2013 increased. Also, the total number of vessel arrivals at these Similar to 2013, we found a slight increase in vessel arrival ports increased as the holiday approached. delays in the weeks leading up to the Chinese New Year in 2014. When we compared the percentage of vessel arrival delays over a day late, we found that most of the ports had a Weekly Performance of Ningbo, Shanghai, Shekou, and Yantian Ports higher rate in 2014 than 2013 except for Shekou. Among the 1000 35 four ports, Shanghai had the highest increase from 30% in 2013 900 30 A s v

l 800 er a

a to 43% in 2014. The comparison is shown in Figure 4. v 700 25 g rr i e A

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20 e ss l 500 e ss l V

15 400 D e l Ningbo Shanghai Shekou Yantian 300 10 ay ( 200 H o

5 u 100 r s 2013 25% 30% 25% 20% ) 0 0 12/15/2013 - 12/22/2013 - 12/29/2013 - 1/5/2014 - 1/12/2014 - 1/19/2014 - 2014 29% 43% 22% 24% 12/21/2013 12/28/2013 1/4/2014 1/11/2014 1/18/2014 1/25/2014 Figure 4: Comparison of percentage of vessel delays over one day Figure 3: Weekly performance of Ningbo, Shekou, Shanghai, between 2013 and 2014 before the Chinese New Year and Yantian ports from December 15, 2013 to January 24, 2014

PORT PERFORMANCE IN NORTH AND SOUTH CHINA

According to port statistics of container throughput, container ports in northern China are experiencing a higher rate of growth than those in southern China. If this trend continues, there may be more pressure to maintain port performance with a heavier workload at the northern China ports. In this issue, we analyzed the performance of ports located in northern and southern China.

CargoSmart’s Global Vessel Voyage Monitoring Center (GVVMC) reviewed the performance of the ports of Tianjin and Dalian in North China and the ports of Xiamen and Da Chan Bay in South China. The GVVMC analyzed average vessel arrival delays and berth times to measure performance from December 1, 2013 through January 28, 2014.

North China: Port of Tianjin The Port of Tianjin is the largest port in northern China and is the main maritime gateway to Beijing. It is divided into two parts, Tianjin Port and Tianjin Xingang (also known as Tianjin New Port). The port is the world's tenth largest port in container throughput.

The GVVMC detected 436 vessel arrivals and compared the actual arrival times with the estimated arrival times of carriers’ schedules. The Port of Tianjin had an average arrival delay of 11.5 hours as Port of Tianjin shown in Figure 1, which was the highest among all ports. The average berth time was 19.2 hours as shown in Figure 2. During the study, the GVVMC observed that since the Port of Tianjin is the largest port among the four ports, its handling of larger vessels may be the reason for the longer berth times.

Port of Tianjin Vessel Count Average Arrival Delay (Hours)

December 2013 240 12.4

January 2014 196 10.6

Grand Total 436 11.5 Figure 1: Average arrival delay of vessels at the Port of Tianjin from December 2013 to January 2014

Tianjin Dalian Xiamen Da Chan Bay

Average Berth Time (Hours) 19.2 13.8 11.8 8.3 Figure 2: Average berth time of vessels at four China ports from December 2013 to January 2014

North China: Port of Dalian

Similar to the Port of Tianjin, the Port of Dalian is located in northern China and is the most northern ice-free port in China. It is a major trade gateway to the Paciﬁc and an important container transshipment hub. It has established trading and shipping links with more than 120 ports in over 40 countries and regions of the world. Port of Dalian

From the data shown in Figure 3, the Port of Dalian had an average arrival delay of 10.6 hours, which was ranked second among the four ports. The average berth time in the sample period was 13.8 hours, which was almost six hours shorter than the Port of Tianjin.

Port of Dalian Vessel Count Average Arrival Delay (Hours)

December 2013 134 10.8

January 2014 72 10.4

Grand Total 206 10.6 Figure 3: Average arrival delay of vessels at Port of Dalian from December 2013 to January 2014

South China: Port of Xiamen

The Port of Xiamen is a well-developed ﬁrst-class port in southern China. It has nine container terminals and oﬀers 74 berths.

As a major port in southern China, the Port of Xiamen performed slightly better than the Port of Tianjin in northern China. As shown in Figure 4, the average vessel arrival delay was 11.1 hours and the average berth time was 11.8 hours. From the Port of Xiamen results generated, it is estimated that for such a big port, the performance is relatively better than the ports in northern China.

Port of Xiamen Vessel Count Average Arrival Delay (Hours)

December 2013 249 12.5

January 2014 173 9.1

Grand Total 422 11.1 Figure 4: Average arrival delay of vessels at Port of Xiamen from December 2013 to January 2014

South China: Da Chan Bay

Da Chan Bay Terminal One is one of the newest ports in Shenzhen. It is situated in the West Shenzhen Port area in South China and started commercial operations in mid-2008. Da Chan Bay Terminal One now has seven berths and is equipped with dual-hoist tandem-lift quay cranes (QCs) to achieve world-class productivity levels and handle larger vessels.

Da Chan Bay As a new port that recently surpassed handling 1 million TEUs a year, Da Chan Bay had the lowest average vessel arrival delay and average berth time among the four ports. As Shown in Figure 5, the average arrival delay was 4.1 hours in December 2013 and 2.9 hours in January 2014, and the overall average arrival delay during the sample period was 3.6 hours. The average berth time was 8.3 hours, which demonstrates the eﬃciency of this new port.

Da Chan Bay Vessel Count Average Arrival Delay (Hours)

December 2013 69 4.1

January 2014 56 2.9

Grand Total 125 3.6 Figure 5: Average arrival delay of vessels at Da Chan Bay from December 2013 to January 2014

Ports Manage Growth After analyzing the average vessel delays and berth times of the four ports, port size seemed to be a better indicator of port performance than the ports’ growth rates. Since there is a growing demand in China’s domestic economy for imported goods as well as raw materials, bigger ports in China such as Tianjin are expected to have more throughput in the future to meet the demand and connect the cargo to the inland cities. The GVVMC will continue to monitor the performance of the ports in North and South China.

The GVVMC shares statistics on ports’ performance so that you can better plan your shipments and carefully select the appropriate schedules and routings to minimize delays. The statistics reﬂect the general situation in the past. The future performance of the vessels and ports will depend on the actual conditions that are aﬀected by weather, vessel delays, and other factors.

SCHEDULE RELIABILITY STUDY: EU-CHINA TRADE

The European Union (EU) and China are two of the biggest traders in the world. EU-China trade has increased dramatically in recent years. China is now the EU's second largest trading partner and the EU is China's largest trading partner.

This month, we tracked 694 vessel arrivals from 12 carriers from December 20, 2013 to January 25, 2014 at selected Europe ports and compared the advertised estimated transit times of diﬀerent services between selected China ports against the actual transit times. If the diﬀerence between the estimated and actual transit times was within plus or minus one day, then it was considered on-time.

For EU-China trade, exporting goods from China to Europe is the dominant trading direction in the market. Therefore, in this analysis, we focused on eight popular loading ports in China including Chiwan, Dalian, Ningbo, Qingdao, Shanghai, Shekou, Xiamen, and Yantian, and four popular discharging ports in Europe including Antwerp, Bremerhaven, Hamburg, and Rotterdam.

Antwerp Bremerhaven Hamburg Rotterdam

Average Transit Time Deviation (Days) 1.5 0.9 1.7 1.1 Percentage of On-Time Vessels (Overall) 30% 44% 42% 45% Highest On-Time Percentage by Port Pair 56.3% 50.0% 60% 57.9% (Ningbo-Antwerp) (Chiwan-Bremerhaven) (Chiwan-Hamburg) (Shekou-Rotterdam) Vessel Arrivals 64 32 296 302 Figure 1: On-time performance of vessels going from China to Europe covering 12 carriers from December 20, 2013 to January 25, 2014

As shown in Figure 1, the average transit time deviation of vessels going to the four Europe ports ranged from 0.9 to 1.7 days. Overall, fewer than 50% of the vessels arrived at these four ports on-time and Antwerp had only 30% of the vessels arriving on-time in terms of transit time. In view of speciﬁc port pairs, vessels for Ningbo-Antwerp, Chiwan-Bremerhaven, Chiwan-Hamburg, and Shekou-Rotterdam had the highest on-time percentage in terms of transit time.

INCIDENTS AROUND THE WORLD

Vessel casualties, port strikes, facility shutdowns, and extreme weather can all aﬀect vessel schedules and potentially delay shipments. In this column, we cover incidents around the world that caught our attention during the previous month and their impact on shipment delays.

January 4 CMA CGM ROSSINI lost 14 containers in English Channel

January 7 MAERSK STEPNICA, container stacks collapsed in storm on Atlantic

January 16 WES JANINE collided with tanker STENBERG

January 18 LEDA TRADER, containers on ﬁre

January 19 EMS TRADER, damaged in collision Vessels January 26 SANTA ROSA, ﬁre in container

January 29 FEI HE collided with tanker LIME GALAXY

January 30 NYK THEMIS collided with a barge AZ FUZHOU

January 3 San Antonio port strike, Chile

January 3 New York-New Jersey port closed due to winter storm, US

Ports January 14 Puerto San Antonio, Mejillones, Iquique, Antofagasta, and Huasco ports strike, Chile

January 22 New York-New Jersey port closed due to winter storm, US

January 24 Nationwide port strike, Brazil

January 28 US Southeast ports, including Houston, New Orleans, Mobile, and Charleston closed due to winter storm

Port Strikes: Brazil Brazil Ports Average Berth Time (Hours) On January 24, a nationwide port strike was held in Brazil (10 35 ports), against privatization of port security. Although the 30 country’s largest port, Santos, did not join in, this act did aﬀect 25 the import and export operations. The chart below shows the 20 average berth times in January, including the strike period. 15 10

5 Data Sample Date Range: January 1 – 28 0 an an an an an an an an an an an an an an an an an an an an an an an an an an an an J J J J J J J J J J J J J J J J J J J J J J J J J J J J ------Carriers Included: 15 - 0 3 6 7 3 4 7 0 1 2 3 4 5 6 8 9 7 2 21 - 22 - 2 15 - 1 1 18 - 19 - 1 14 - 2 25 - 26 - 2 28 - 1 11 - 12 -

Brazil Ports Number of Ports: 10 Vessel Arrivals: 472 Average Berth Time: 20.9 hours

ARE YOU THE LAST TO KNOW DATA METHODOLOGY WHEN YOUR SHIPMENT IS CargoSmart established the Global DELAYED IN TRANSIT ? Vessel Voyage Monitoring Center (GVVMC) to detect and analyze exceptions as they are happening so GET A HELPING HAND WITH EARLY VISIBILITY that shippers, forwarders, and WHEN YOUR SHIPMENTS ARE DELAYED NVOCCs can be informed earlier.

CargoSmart is pleased to offer VisibilitySmart, a new Opened in Hong Kong in October service for shippers and logistics service providers. 2012, the GVVMC monitors and analyzes 21 ocean carriers’ vessel VisibilitySmart identifies when cargo has an movements covering 5,000 vessels unexpected delay. While Innovating provides updates and 800 ports around the world. on vessels and trends at an aggregated level, Using advanced analytical software VisibilitySmart delivers early alerts and summary tools, the center analyzes standard reports at the container level when your cargo faces vessel patterns, compares them with delivery exceptions. actual vessel movements, and detects deviations that have the potential to Pilot trials have proven the excellent potential for cause shipment-plan exceptions. collaboration between shippers, logistics service providers, and ocean carriers. The GVVMC obtains data from the Automatic Identification System (AIS), Request a free demo today at visibility.cargosmart.com. ocean carrier websites, marine terminals, and shipment data. The center ensures high data quality by observing and reconciling multiple data sources.

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