Daily Maersk’s impacts on shipper’s supply chain inventories and implications for the liner shipping industry
Lam, Jasmine Siu Lee
Date of Issue2014
School of Civil and Environmental Engineering
The liner shipping industry has long been characterized by a weekly sailing frequency and schedule unreliability. This research is motivated by the launch of the revolutionary “Daily Maersk” service in late 2011, which introduced daily departures and “absolute reliability” in the Asia–North Europe trade lane. This paper analyzes Daily Maersk’s impacts on a shipper's supply chain inventories and profound implications for the liner shipping industry as a game changer. The quantitative analyses show that the impact of more frequent sailings is most significant on a shipper’s cycle stock, while improving schedule reliability substantially reduces safety stock and pipeline stock. Daily Maersk is most valuable for products that have high value density, high inventory holding cost ratio, low demand variability and high service level requirement. These findings imply that the trend of liner alliance/merger/acquisition is likely to continue or even accelerate as shipping lines consolidate fleet capacity to offer more frequent sailings. Rival carriers may step up their involvement in terminal operations to improve schedule reliability. They also need to rethink about their service level targets and clearly define their preferred customer segments.
DRNTU::Engineering::Civil engineering::Construction management
Maritime policy & management
© 2014 Taylor & Francis. This is the author created version of a work that has been peer reviewed and accepted for publication by Maritime Policy & Management, Taylor & Francis. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [DOI://dx.doi.org/10.1080/03088839.2013.869364].