News / Gemini partners defend on-time target and promise cost competitiveness

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With the container shipping industry seemingly unable to improve its schedule reliability scores beyond the mid-50% range since the autumn, questions continue to be raised about the forthcoming Gemini cooperation’s on-time targets.

The Gemini carriers – Maersk and Hapag-Lloyd – have set out a 90% on-time target, which they said would be achieved by doubling down on the use of transhipment across their new global network.

Speaking on this week’s The Loadstar Podcast, Hapag-Lloyd’s senior director of strategy Matthias Dietrich, explained that omission of direct calls at some major ports, such as Antwerp, Southampton, Le Havre, Tianjin and Hong Kong would have no effect on the Gemini carriers’ plan to deliver the highest levels of schedule reliability in the industry.

“In the end, what matters to customers on the physical transport is three things – getting the space they need, the reliability and the transit time.

“And a direct service is no benefit in itself, especially if you follow then an overly complex schedule prone to disruptions, that’s not necessarily better.

“If we inadvertently prove we can provide the quality with a non-direct service, I think that the customers will embrace the concept,” Mr Dietrich said.

He reiterated the key Gemini feature that from next year Maersk and Hapag-Lloyd will have far greater control over the operation of the network than either carrier currently enjoys under their existing alliance arrangements, and which will mitigate the greater use of transhipment and the transfer of boxes onto to shuttle and feeder vessels.

“Our research has shown there is a large segment in the shipper community that values quality and is willing to pay for it – at least to some extent.

“On the other hand, I think it’s not true that a more reliable network is more expensive – we know that we will be cost competitive with the new hub-and-spoke system and the new network.

“We will also have control over the feeders and the shuttles – it’s not like we are only running the trunk lines and then giving everything else to some external feeders.

“It will be an integrated network that will be run together with Maersk in an integrated way, and with the control over the hub ports, we think that we really can provide the quality.”

However, there have been questions asked about its reliability target – when initially announced the Gemini partners claimed they would offer shippers an on-time schedule reliability of 90%; while Hapag-Lloyd’s recently published 2030 strategy claimed to target an 80% on-time delivery rate.

Mr Dietrich explained that the latter figure reflected Hapag-Lloyd’s hinterland transport ambitions.

“The 90% reliability target from the Gemini cooperation is schedule reliability target – the vessel being on-time – whereas our 80% target is an on-time delivery target on the box level.

“If it’s a door-to-door transport, it’s basically the arrival at the door, or if it’s a port carrying then it’s the arrival at the port, given possible transshipments in between.

“It’s kind of logical, and proven by reality, that you can’t achieve the same level [of reliability] on the box level that you have in your vessel schedule,” he said.