Ocean shipping accounts for more than 80% of global trade volume. However, in recent years, a combination of factors including the global pandemic, extreme weather events, geopolitical tensions, labor disputes, and trade barriers has significantly disrupted maritime transportation. According to data from freight analysis firm Sea-Intelligence, ocean shipping schedule reliability stands at just 50-55% for 2024. This has made supply chain resilience and reliability top priorities for freight operators. But exactly how much does this unreliability cost shipping companies, and what can be done to mitigate its impact?
In maritime shipping, reliability means maintaining consistent fixed schedules while meeting customers' comprehensive service requirements. This includes providing high-quality equipment, on-time departures and arrivals, accurate documentation, transport security, and consistent communication and transparency throughout the shipping process. These key factors ensure smooth operations, reduce costs, and improve customer satisfaction. However, failures in any of these areas can significantly impact freight operators' businesses.
A survey of 570 global logistics decision-makers in the Logistics Trends Map revealed that 76% consider financial resilience in logistics highly relevant to their companies, making it one of the industry's top current trends. Yet delays at a single port can trigger a domino effect throughout the entire supply chain, substantially increasing costs for both freight operators and end carriers. The financial, operational, and reputational impacts of unreliable ocean shipping can all undermine a freight operator's financial resilience.
Key Impacts of Shipping Unreliability
Financial Impacts:
- Increased operational and inventory costs: Unreliable shipping schedules require higher safety stock levels and longer lead times, driving up inventory holding costs. Sea-Intelligence data shows the average delay time in March 2025 was 5.02 days, meaning importers may need to carry at least 1-2 weeks of extra inventory due to the ocean network's low reliability. For companies targeting 45 days of inventory, an additional week represents significant added cost.
- Lost sales: Shipping delays can disrupt manufacturing processes, leading to missed sales opportunities for time-sensitive products.
- Penalties and additional costs: Companies may face penalties for late deliveries and need to pay premium rates for expedited shipping or alternative transport modes.
- Higher working capital requirements: Poor reliability forces companies to maintain elevated inventory levels to mitigate delay risks, increasing working capital needs.
Operational Impacts:
- Production line disruptions: Shipping delays can cause interruptions in production processes, reducing productivity and operational efficiency.
- Increased contingency costs and complexity: Unreliable shipping may require expensive contingency solutions like expedited shipping to avoid delays.
- Increased supply chain pressure: Problems in any supply chain segment create pressure and inefficiencies throughout the system.
- Storage and handling challenges: Seasonal or time-sensitive goods may require additional storage and handling during delays, increasing operational costs and potential spoilage.
Reputation and Customer Service Impacts:
- Lost sales and market share: Customers may switch to competitors offering more reliable service.
- Deteriorating profit margins: Additional logistics costs from unreliability may compress profits or be passed to consumers, making products less competitive.
- Reduced customer satisfaction and loyalty: On-time delivery is crucial for maintaining customer satisfaction and loyalty.
- Damaged brand reputation: Failure to deliver as promised can harm brand reputation and erode customer trust.
In AlixPartners' recent Disruption Index survey, nearly half of business executives indicated they expect supply chain disruptions to be more challenging this year than last. Fortunately, freight operators can consider several strategies to reduce disruption risks and improve preparedness:
- Evaluate logistics partners based on performance data
- Collaborate with integrated logistics providers to manage multiple supply chain segments
- Clearly define service reliability expectations
- Plan ahead to eliminate risks from controllable or known factors
- Diversify shipping volumes across different modes (air, rail, road, etc.)
- Invest in technology solutions
- Develop contingency plans
- Monitor industry news to anticipate potential disruption events
While supply chain disruptions are inevitable, companies leveraging resilience-focused logistics solutions can gain visibility into risks, improve efficiency, and enhance flexibility to build stronger, more responsive supply chains that keep goods moving smoothly.
