Innovating. Shipment Success Through Intelligent Visibility. Issue 45 July 2016

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1 Issue 45 July 216 Shipment Success Through Intelligent Visibility WELCOME to the July issue of CargoSmart s Innovating, a monthly, complimentary e-newsletter for the ocean shipping industry. Innovating is designed to provide insights about cargo delays around the globe that you may find useful to improve your daily operations and strategic planning. On June 23, 216, the majority of British citizens voted in favor of the referendum for the United Kingdom to leave the European Union. On July 13, Prime Minister David Cameron stepped down and Theresa May became the new prime minister to lead the sovereign state through the transition. According to Alphaliner s analysis in June, Brexit is expected to have little direct impact on container shipping. However, the economy, trade agreements, and other transportation modes may be affected. With our eyes on the UK this month, the GVVMC took the opportunity to examine the performance of four major UK container ports - Port of, Port of, Port, and Port of. London had the shortest average vessel arrival delays and had the longest vessel departure delays. Overall, we found that the two smaller UK ports had the shortest average vessel arrival delays and berth times. We also analyzed the trans-pacific trade this month. In June, the new locks opened at the Panama Canal to accommodate New Panamax container ships with a capacity up to 13, TEUs. At the same time, carriers have been enhancing services before peak season. We found the trans-pacific routes to have stronger schedule reliability than the Asia-Europe and trans-atlantic routes. Within the trans-pacific trade, we compared schedule reliability for schedules to the US East and West Coasts by month from January to June. We also compared schedule reliability by carrier for four popular Asia to the US East Coast routes that go through the Panama and Suez canals. Lastly, for our Incidents Around the World column featuring vessel and port disruptions, we looked at the impact of a new gate system on June 18 at the Port of Charleston. While gate activity experienced long delays during the first week of its implementation, we did not see an impact on vessel berth times. We invite you to monitor current events affecting your shipments and to share your delay experiences with us on our visibility blog at visibility.cargosmart.com/blog or by at innovating@cargosmart.com. ABOUT INNOVATING CargoSmart is creating a whole new visibility model for ocean shippers and logistics service providers to monitor their shipments. The rules of the game are changing in the global shipping and logistics industry. CargoSmart s innovative methods offer insights for the industry to manage their shipments. CargoSmart s monthly, complimentary Innovating newsletter delivers refreshing insights for you to make intelligent decisions for your supply chain. CONTENTS UK Port Performance Before Brexit 2 Schedule Reliability: Trans-Pacific Trade 4 World Incidents: Charleston Delays 7 Contact 8 Kim Le Executive Editor 216 CargoSmart Limited. All rights reserved. 1

2 UK IN THE SPOTLIGHT: PORT PERFORMANCE BEFORE BREXIT On June 23, 216, the majority of British citizens voted in favor of the referendum for the United Kingdom to leave the European Union. On July 13, Prime Minister David Cameron stepped down and Theresa May became the new prime minister to lead the sovereign state through the transition. According to Alphaliner s analysis in June, Brexit is expected to have little direct impact on container shipping. However, the economy, trade agreements, and other transportation modes may be affected. With our eyes on the UK this month, the GVVMC took the opportunity to examine the performance of four major UK container ports - Port of, Port of, London Gateway Port, and Port of. While the Port of London Authority includes several container terminals, the GVVMC focused its analysis on the Port terminal that specializes in larger vessels that require a larger draft and long distance voyages. The GVVMC collected data from the past three months for the four ports and analyzed vessel arrival delays, vessel departure delays, berth times, and the size of vessels arriving and berthing at the ports. The data scope covered April 1, 216 through June 3, 216. Port of the best among the four ports, with only 2.1 to 2.4 hours across the studied period. The results are shown in Figure 1. Hours Average Vessel Arrival Delays Figure 1: Average vessel arrival delays at the ports of,, London, and from April to June 216 Had Longest Average Vessel Departure Delays Next, we reviewed the average vessel departure delays at the four UK ports, as shown in Figure 2. Similar to its vessel arrival delays, had the longest average departure delays and it continuously improved from 12.6 hours in April, to 8.2 hours in May, and further reduced to 8. hours in June. s average departure delays increased from 4.4 hours in April, to 6.6 hours in May, and then slipped to 5.8 hours in June. first dropped from 4.9 hours in April, to 3.7 hours in May, and then increased to 4.6 hours in June. London maintained 3.4 and 3.8 hours in April and May, and then increased by 7% to 6.1 hours in June Port of Port Average Vessel Departure Delays 12 Port of London Had Shortest Vessel Arrival Delays First, the GVVMC reviewed average vessel arrival delays at the four UK ports. In June, each of the ports had an average vessel arrival delay under 7.5 hours., London, and experienced fairly consistent performance in April and May, while had longer delays in April and May. steadily improved from 13.3 hours in April, to 1.9 hours in May, and to 3.2 hours in June. London performed Hours Figure 2: Average vessel departure delays at the ports of,, London, and from April to June CargoSmart Limited. All rights reserved. 2

3 Average Berth Times Increased from April to June Measuring the time vessels take to load and unload containers is one measure of a port s efficiency. Figure 3 displays the average vessel berth times at the four ports. We found a slight increasing trend over the three months at three out of the four ports from April to June. first had an improvement from 27.7 hours in April to 24.5 hours in May, and then increased to 29.6 hours in June. had a gradual increasing trend from 22.8 hours in April, to 23.1 hours in May, and then 24.3 hours in June. London, sharing the same trend, increased from 14.3 hours in April to 14.5 hours, and then jumped to 18.2 hours. gradually reduced its average vessel berth times from 19.6 hours in April, to 17.6 hours in May, and then to 17.3 hours in June. Hours Figure 3: Average vessel berth times at the ports of,, London, and from April to June 216 Had Most Vessel Arrivals As shown in Figure 4, was the busiest port each month, with 13 vessels in April, 99 in May, and 89 in June. had a decreasing trend, while the other three ports had overall had more vessel arrivals in June than in April. had 78 vessel arrivals in April, then slightly dropped to 77 in May, and bounced back to 84 in June. also had a slight drop from 32 in April to 31 in May, and then had 36 in June. London had 32 vessels berthing in April, reduced to 26 vessels in May, and then slightly increased to 27 in June. Vessel Count Average Vessel Berth Times Number of Vessel Arrivals Figure 4: Number of vessel arrivals at the ports of,, London, and from April to June 216 and Served Most Mega Vessels In addition to the vessel count, the GVVMC categorized the size of the vessels berthing at the four ports. served more than 3 vessels with 1, TEUs capacity each month in the studied period 35 in April, 4 in May, and 32 in June., right behind, served more than 25 vessels with 1, TEUs capacity each month in the studied period 29 in April, 26 in May, and reached 3 in June. In comparison, only served small vessels. The majority of them had a capacity of less than 4, TEUs 24 to 27 vessels with less than 4, TEUs and two to three vessels with a 4,-6,999 TEU capacity each month. London served all different size categories of vessels with the majority having a 4,-6,999 TEU and 7,-9,999 TEU capacity five vessels each month for those with less than 4, TEUs, vessels with 4,-6,999 TEUs and 7,-9,999 TEUs capacity, and five to seven vessels with a capacity of 1, TEUs. The results are shown in Figure 5. Vessel Count <4, 4,-6,999 7,-9,999 1, Vessel Size Distribution <4, 4,-6,999 7,-9,999 Figure 5: Vessel size distribution at the ports of,, London, and from April to June 216 Smaller UK Ports Had Shortest Arrival Delays and Berth Times The two smaller UK ports in terms of container throughput, and Port, had the strongest performance among the ports with shorter average vessel arrival delays and berth times. In terms of average vessel departure delays, the results were mixed with and Port having the shortest average departure delays. 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. 1, <4, 4,-6,999 7,-9,999 1, CargoSmart Limited. All rights reserved.

4 TRANS-PACIFIC SCHEDULE RELIABILITY Due to weak trans-pacific trade demand, carriers started to suspend trans-pacific trade services in mid-june, ahead of peak season, according to Alphaliner. At the same time, the new locks of the Panama Canal opened on June 26. The canal can now accommodate New Panamax container ships with a capacity of up to 13, TEUs. After the new locks opened, carriers have started to enhance services by increasing the number of services through the Panama Canal on Asia to US East Coast trade routes. Amid these changes in the trans-pacific trade, we reviewed the trade s recent schedule reliability performance. First, we analyzed the overall schedule reliability of three major trades, including trans-pacific, Asia-Europe, and trans-atlantic, for the first half of 216. We analyzed the carrier performance from over 6, schedules, covering 19 ocean carriers, from January 1 to June 3. Next, we reviewed the trans-pacific schedule reliability of two routes, Asia-US East Coast and Asia-US West Coast. Furthermore, we selected four popular Asia-US East Coast routes in different directions to compare their schedule reliability. Schedule Reliability of Trans-Pacific Trade Was Highest As shown in Figure 1, the average schedule reliability of the three trades was 67%. Performance of the trans-pacific trade was highest with 7% reliability. The Asia-Europe and trans-atlantic trades ranked second and third with 65% and 63% reliability respectively. Schedule Reliability by Trade 1% the trans-atlantic trade was in June with 76% reliability and lowest in January with 48% reliability. Overall, the trans-pacific trade was the most stable during the studied period. The results are shown in Figure 2. 1% 4% 2% 67% 65% 66% 48% January 216 Monthly Schedule Reliability by Trade 53% February % 61% 58% 69% Figure 2: Monthly schedule reliability for trans-pacific, Asia-Europe, and trans-atlantic trades from January 1 to June 3, 216 When looking at the schedule reliability performance of the Asia-US East Coast and Asia-US West Coast routes in the trans-pacific trade, both routes performed best in May with 79% and 78% reliability respectively. The Asia-US East Coast performed worst in January with 63% reliability while the Asia-US West Coast performed worst in February with 63% reliability. Overall, the trans-pacific trade schedule reliability had an increasing trend from January to June, but the Asia-US East Coast route dropped 8% reliability in June compared to May. We will continue to monitor the routes to see whether the Panama Canal expansion will have an impact on the carrier schedule reliability. 79% 7% 69% 59% 67% 76% 72% 74% March 216 April 216 May 216 June 216 Trans-Pacific Asia-Europe Trans-Atlantic 7% 65% 63% 67% 9% Monthly Trans-Pacific Schedule Reliability 4% 79% 2% 78% 77% % Trans-Pacific Asia-Europe Trans-Atlantic Average Figure 1: Overall schedule reliability for trans-pacific, Asia-Europe, and trans-atlantic trades from January 1 to June 3, 216 7% 69% 63% 68% 63% 69% 65% 69% 68% 71% Asia-US East Coast Asia-US West Coast Trans-Pacific Next, we analyzed the schedule reliability by trade and month. The trans-pacific trade performed best in May with 79% reliability and worst in February with 65% reliability. The Asia-Europe trade performed best in June with 72% reliability and worst in February with 53% reliability. The highest rate of 5% January 216 February 216 March 216 April 216 May 216 June 216 Figure 3: Monthly trans-pacific schedule reliability for Asia-US East Coast and Asia-US West Coast routes from January 1 to June 3, CargoSmart Limited. All rights reserved.

5 Next, we measured the schedule reliability of four popular trans-pacific routes on different bounds: Eastbound: I) Shanghai to New York-New Jersey II) Ningbo to New York-New Jersey Westbound: III) New York-New Jersey to Ningbo IV) New York-New Jersey to Singapore Shanghai to New York-New Jersey: 2M Alliance Carriers Performed Best On the Shanghai to New York-New Jersey route, Maersk was the most reliable carrier with 94% reliability while average reliability was rated at 68%, followed by MSC and K Line respectively with 92% and 84% reliability. The results are shown in Figure 4. Figure 5: Schedule reliability of the Shanghai to New York-New Jersey Ningbo to New York-New Jersey: Overall Reliability Was 74% As shown in Figure 6, the overall schedule reliability for the Ningbo to New York-New Jersey route was 74%. Maersk had the highest rate of 93% reliability. MSC and K Line ranked second and third with a relatively lower rate of 92% and 84% reliability. 1% Schedule Reliability Shanghai to New York-New Jersey 94% 92% 84% 68% 1% Schedule Reliability Ningbo to New York-New Jersey 93% 92% 84% 74% 4% 4% 2% 2% % Maersk MSC K Line Average Figure 4: Schedule reliability of the Shanghai to New York-New Jersey As shown in Figure 5, we illustrated the average and top three carriers reliability performance from January 1 to June 3, 216. The highest average monthly reliability was marked in May and lowest in January. Maersk had a stable performance from February to June while the reliability of K Line moved up and down during the studied period. MSC maintained a stable performance from March to June with perfect performance. % Maersk MSC K Line Average Figure 6: Schedule reliability of the Ningbo to New York-New Jersey As illustrated in Figure 7, both Maersk and MSC maintained a stable performance from March to June, while K Line had a fluctuating trend during the studied period, as reliability rates varied from month to month CargoSmart Limited. All rights reserved.

6 New York-New Jersey to Singapore: Highest Reliability in June and Lowest in February Figure 1 shows Evergreen Line was the most reliable carrier among the chosen carriers on the New York-New Jersey to Singapore route with a reliability rate of 92%, and followed by Yang Ming and COSCON at 91% and 89% reliability. The overall reliability rate of the studied route was 76%. Figure 7: Schedule reliability of the Ningbo to New York-New Jersey New York-New Jersey to Ningbo: K Line Ranked Highest As illustrated in Figure 8, the market average schedule reliability for the New York-New Jersey to Ningbo was 67%. K Line was highest on the route with 86% reliability. Hamburg Sud and Evergreen Line had a rate of 81% and 78% reliability. 1% 4% 2% 86% Schedule Reliability New York-New Jersey to Ningbo 81% 78% 67% 1% 4% 2% % 92% Evergreen Line Schedule Reliability New York-New Jersey to Singapore 91% 89% Yang Ming COSCON Figure 1: Schedule reliability of the New York-New Jersey to Singapore The three carriers had their best performance in June and worst in February on the New York-New Jersey to Singapore route. Evergreen and COSCON achieved their highest rates with perfect reliability in January, March, and June, while Yang Ming had similar results in January, March, April, and June. The results are shown in Figure % Average % K Line Hamburg Sud Evergreen Line Average Figure 8: Schedule reliability of the New York-New Jersey to Ningbo As shown in Figure 9, K Line kept a perfect performance from January to April and started to decrease in May and June on the New York-New Jersey to Ningbo route, while Hamburg Sud had ideal records in January, February and May, and relatively low reliability in March, April, and June. Evergreen increased its reliability from March and held its rate in May and June. Figure 11: Schedule reliability of the New York-New Jersey to Singapore Figure 9: Schedule reliability of the New York-New Jersey to Ningbo CargoSmart Limited. All rights reserved.

7 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. Vessels Ports June 9 June 15 June 2 June 28 June 29 June 29 June 1 June 13 June 22 June 22 SARAH SCHULTE, crew lost over board, southwest of Cay Island, Vietnam CMA CGM ROSSINI, fire broke out in one container, Colombo, Sri Lanka MSC CHIARA, collision with dredger MACUTI, Port of Beira, Mozambique PEMBA, collided with the Nieuwediep Quay, Denh Helder, Netherlands MSC ITEA, collision with container crane, Bremerhaven, Germany CNP PAITA, caused oil pollution, Cartagena, Chile Piraeus port strike, Greece Port pilots strike, Cyprus Crane caught fire in port of Porto Marghera, Italy Charleston Wando Welch Terminal gate delays, US Terminal Gate Delays: Port of Charleston On Saturday, June 18, the South Carolina Ports Authority introduced a new gate system at its Wando Welch Terminal to facilitate cargo activities at the port facilities. The updates are expected to reduce truck turn times in anticipation of larger vessels visiting the terminal with the opening of the Panama Canal s expansion. The system rollout experienced technical glitches. JOC.com reported that the terminal gates closed temporarily on June 22. Local media reported long truck queues starting on June 2 and that police eventually closed the road leading to the terminal on June 23. Throughout the week, the terminal extended its gate hours to allow more time for trucks to enter the terminal until operations returned to normal. Another South Carolina container terminal, the North Charleston Terminal, is scheduled to implement its new gate system in early August. We reviewed the daily average berth times and vessel arrival count for Wando Welch Terminal during the month of June. The results do not show an impact on average berth times at the terminal. Wando Welch Terminal Vessel Arrivals: 71 Duration: June 1 3, 216 Average Berth Time: 14.2 Hours Longest Berth Time: 37.1 Hours Wando Welch Terminal Average Berth Times and Vessel Count (June 1-3, 216) Jun 2-Jun 3-Jun 4-Jun 5-Jun 6-Jun 7-Jun 8-Jun 9-Jun 1-Jun 11-Jun 12-Jun 13-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun 2-Jun 21-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 27-Jun 28-Jun 29-Jun 3-Jun Berth Time (Hours) *New gate system was introduced on June 18 Vessel Arrival Count 216 CargoSmart Limited. All rights reserved. 7

8 Manage SOLAS VGM Flexibly, Free of Charge CargoSmart offers free solutions for shippers to provide the verified gross mass (VGM) of their cargo to their carriers to comply with the new requirements from the Safety of Life at Sea (SOLAS) Convention. CargoSmart works closely with ocean container carriers and terminals to provide shippers with flexible and integrated solutions to manage the SOLAS VGM submission process effectively and smoothly. Available through online, EDI, and mobile platforms, the VGM solutions allow shippers and designated parties to: Minimize changes to existing shipping execution processes Submit the VGM in shipping instructions or a separate form (VERMAS) Improve collaboration with related parties to submit the VGM on your behalf Have clear visibility to submission status Minimize the risk of late submissions Control costs for complying with the new requirements To learn more about how CargoSmart s solutions can help you comply with the SOLAS container weight requirements, visit: DATA METHODOLOGY CargoSmart established the Global Vessel Voyage Monitoring Center (GVVMC) to detect and analyze exceptions as they are happening so that shippers, forwarders, and NVOCCs can be informed earlier. Opened in Hong Kong in October 212, the GVVMC monitors and analyzes 7, vessels' movements covering 9% of the world's container capacity and over 1,1 global container ports. Using advanced analytical software tools, the center analyzes vessel patterns, to detect deviations that have the potential to cause shipment-plan exceptions and monitor live vessel schedules to measure carriers reliability. The GVVMC obtains data from the Automatic Identification System (AIS), ocean carrier websites, marine terminals, and shipment data. The center ensures high data quality by observing and reconciling multiple data sources. VISIBILITY BLOG - JOIN THE DISCUSSION Follow updates and share your insights about vessel delays on CargoSmart's blog at visibility.cargosmart.com/blog. To receive the monthly Innovating newsletter for the shipping industry by , please subscribe at We value your feedback and want to continue to improve our service and information that we provide to you. To provide feedback or ask questions, please contact us at innovating@cargosmart.com. China Germany Hong Kong United States CargoSmart Limited. All rights reserved.

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