Regularity of service has for long been one of the fundamental features of container shipping. Today, however, companies are tending to move away from this historic model in favour of a hybrid range of services.
A striking feature of recent years has been the fact that regular line shipping companies are now capable of adapting their capacity to market variations in a very agile manner. Their reactivity has the effect of lowering quality of service in terms of departure frequency and transit times but enables freight rates to be maintained at relatively high levels, as was seen at the height of the coronavirus crisis despite the fall in demand.
This trend raises major questions about the fundamentals of regular shipping lines. Traditionally, the capacity to provide services at regular intervals was a key characteristic of the top shipping companies. This approach began in air transport as Guillaumet and Saint Exupéry carried out exploits on a daily basis in their efforts to deliver the post at the set time on the set day whatever the meteorological, political or geographical conditions. In shipping, during the inter-war period, the liner companies like CGT, Cunard, US Lines and Italia di Navigazione prided themselves on their ability to maintain their advertised speeds and made it a point of honour to respect their schedule commitments to their first, second and third class passengers.
Reduced quality of service
The arrival of yield management marked the end of this chivalrous approach in favour of one which was markedly more pragmatic. Today, regular line companies can delay the departure of a ship two thirds full for a week and this on a unilateral basis.
The deterioration in the quality of service offered by regular line shipping services is a mathematical reality. Over 20 years, the average transit time of the Shanghai-Le Havre service has increased from 27 to 40 days despite the technological progress achieved over the same period. Operators are aware of the situation and are starting to react. CMA CGM is looking to distinguish itself on the market via a new premium service called "Sea Priority Go", thus giving certain cargos official VIP status with guaranteed loading on the first ship to leave and offering the best transit time and high-speed port handling. In another example, Hapag Lloyd is also putting the emphasis on quality with its 95% "Loaded as Booked" slogan.
Containers left on the quayside ("rolled over") are a catastrophe for clients and shipping companies alike. For the clients, apart from the initial frustration, containers left on the quay involve fastidious administrative work, given that IT systems are not always able to easily manage last minute switches from ship to another. Professionals know, moreover, that the biggest risk for a container left on the quay is that it will stay on the quay again after the next ship has called! We have even seen "sweeper" services set up from time to time to load containers left behind on quaysides.
Hybrid services
The container shipping model has changed considerably, therefore. Lines are no longer so "regular" as that since they are constantly adapted to suit demand even if they have not yet gone over to "tramping", which is to say voyage chartering. Nevertheless, one can talk today about a hybrid model based on a kind of "semi-tramping". On the one hand, for the top end of the market, equivalent to the first class on the liners of yesteryear, there is a premium service offering the guarantee of optimal use of available resources, and, on the other, are the second and third classes, served by "sweeper" vessels which pick up the containers which have been left behind by the ship on which they were originally due to part.
Some will say that the massification of cargo volumes and the domination of IT systems make this kind of freight management inevitable, particularly since the shipping companies take advantage of the situation to charge a higher price for a lower quality service. Let it not be forgotten, however, that container shipping is ultimately not very costly. It is certain nevertheless that, between China and Europe, the old liner spirit can be found more on the new Silk Road rail services than in the shipping sector.
