Daily Maersk: Introducing absolute reliability
Daily Maersk, Maersk Line’s new service on the Asia–North Europe trade lane, will dramatically change the way shipping is done. It offers a daily cut-off at the same time every day, seven days a week, and always with the exact same transportation time. Containerised cargo will now be delivered with unprecedented frequency and reliability.
A daily service between Asia and North Europe with reliable on-time delivery will change liner shipping forever. Up until now, customers have had to adjust their production schedules and supply chains to accommodate shipping lines’ unreliability, as they have never been able to trust that their cargo would be on time.
Not anymore. The engine behind Daily Maersk is 70 vessels operating a daily service between four ports in Asia (Ningbo, Shanghai, Yantian and Tanjung Pelepas) and three ports in Europe (Felixstowe, Rotterdam and Bremerhaven) in what amounts to a giant ocean conveyor belt for the world’s busiest trade lane.
Regardless of which of the four Asian ports the cargo is loaded at, the transportation time – from cut-off to cargo availability – is fixed. Daily cut-offs mean that cargo can be shipped immediately after production without the need for storage.
Maersk Line promises that cargo at the other end will be available for pick-up on the agreed date. To underline that Maersk Line means business and how firmly the company believes in Daily Maersk, the promise is backed up with monetary compensation, should customers’ containers not arrive on time. This promise is a first in the shipping industry.
Changing shipping from the weakest to the strongest link in the supply chain
“We set out to design a service that takes the stress out of our customers’ lives, to change shipping from the weakest to the strongest link in the supply chain. After all, shipping is only around two percent of our customers’ total cost. And yet our unreliability has until now forced them to shape their production plans and inventory around it,” says Maersk Line CEO, Eivind Kolding.
Today, shipping creates anxiety, not boredom. As a general rule, shipping lines serving the Asia–North Europe trade are unreliable, in effect providing customers with an uncontrollable conveyor belt. 44% of all containers are late. 11% are more than two days late – and even as much as 8% are more than eight days late.
“The lack of on-time delivery costs our customers large sums of money because it makes shipping more of an art than a science. Companies have to make up for an unreliable supply chain; they are forced to build a buffer in their supply chains and lose income when goods are not on time,” Kolding explains.
Before Daily Maersk, Maersk Line was already best-in-class with 75% of its vessels on the Asia–North Europe trade arriving on time. But this was still not reliable enough for customers to plan their supply chains in an optimal manner. Head of logistics at the electronics giant Pegatron, Andy Tron, explains:
“Reliability should be a key performance indicator for all carriers. Today, 10% of all our shipments are more than two days late, so we are of course doubtful any carrier can provide guaranteed reliability. But if it is possible and if it is combined with more frequent departures to meet our production schedule, it would allow us to lower our inventories and significantly lower our costs.”
With Daily Maersk:
· Cut-off every day
· Transportation time, counting from cut-off to cargo availability
· Every container arriving on time
· If cargo availability is delayed by 1-3 days, Maersk Line will pay USD 100 per container. If delayed by four days or more, Maersk Line will pay back USD 300 per container
Without Daily Maersk:
· Cut-off once every week
· Transit time, counting from vessels’ departure to arrival at destination
· Approximately every second container arriving on time
· No compensation if shipment arrives late
The first cut-off in the Daily Maersk set-up will be on 24 October 2011.
· Cut-off: The latest time cargo may be delivered to a terminal for loading to a scheduled vessel.
· Gate-in: The time when the container passes through the gate in the terminal.
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