Maritime 2026 Annual Review & Outlook

In Perspective

By John McCauley

Until the whole industry improves its reliability, the scope for any premium for above-target performance is low.

We are a strange bunch, we logisticians. One of our self-designed millstones is our key definition of success, and it is always unattainable either at an individual or aggregate level.

For container shipping, I refer to on-time arrival( OTA), although for other modes this is usually on-time delivery. We measure on-time arrival as a percentage, with the only feasible outcome to fail; the only question is by how much. Those odds aren’ t acceptable outside of shipping. The analogy frequently used is patient operation success in a hospital. If an operation is successful 999 times out of 1,000, do we want to be the one patient that didn’ t make it?

But as pertains to container shipping, there are factors beyond the control of the carrier, including severe weather at ports and on the water and strikes and other labor disruptions. That means a 100 % ontime arrival within 24 hours of schedule is unachievable on a volume and consistent basis.

However, industrywide levels of 60 % to 65 %, with no historical precedent for greater achievement nor likelihood of ever getting there, mean we are in a doom loop of trying— or rather hoping— to make it better.

This is despite the admirable efforts of the Gemini Cooperation alliance of Maersk and Hapag-Lloyd to achieve superior reliability. rblfmr / Shutterstock. com

Which leads to my observations about the suggestions of a premium for higher reliability levels, and particularly that carriers would want to claw back some of the benefits of lower inventory costs for beneficial cargo owners( BCOs). There are, however, more than a few obstacles. Firstly, all BCOs will keep a mix of carriers( dual or multi-sourcing) for multiple reasons, including schedule, risk of losing space or price, which means that while one carrier may achieve above-market reliability, their benefit to BCOs will be dragged down by the performance of their other choices in the industry.

An example: Carrier A achieves 90 % reliability, Carrier B 60 %. You have to program your planning systems for one, not multiple, delivery durations. Which do you choose? None are ideal; too long and you unnecessarily extend inventory carry, but if those same shipments arrive early, you need warehousing. Secondly, what about all the other problems caused by poor reliability? Stock-outs, air freight, extra staffing, warehousing, etc. Focusing on inventory highlights a cash flow problem; many of the others are either opportunity costs( stock-outs, lost sales) or real costs( additional warehousing, staffing, sales contract non-compliance). I am not saying that container shipping is responsible for all of this, but it is an important contributor to the problem. Thirdly, any premium / bonus for above-target performance must surely have an offset for underperformance. And by this I don’ t mean adjusted performance taking account of externalities. The non-performance must be explanation / excuse agnostic, meaning if the one-time arrival is not met, then this is a fail. In other modes of transport, this is the norm and why targets are never set at 100 %, even for best-in-class operators.

Finally, I am all for improved reliability; most actors in container shipping share that view. How to get there is tricky and requires strategic intent. Many carriers will see it as unachievable and not worth the effort given the likelihood of high uncertainty of any reward other than some degree of customer stickiness.

Until the whole industry improves its reliability, the scope for any form of premium / bonus for above-target performance is low. The only way I can see it working is to have a premium attached to index-linked contracts, and even then, that must be linked to performance against an agreed target level with penalties. Given the favorable buy-side economics in current contracting, this may be one for carriers to put on the backburner.

email: john-mccauley1 @ outlook. com

36 Journal of Commerce | January 5, 2026 www. joc. com