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Daily Maersk's impacts on shipper's supply chain inventories and implications for the liner shipping industry

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  • Abraham Zhang
  • Jasmine Siu Lee Lam

Abstract

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 article 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 (SL) 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 SL targets and clearly define their preferred customer segments.

Suggested Citation

  • Abraham Zhang & Jasmine Siu Lee Lam, 2015. "Daily Maersk's impacts on shipper's supply chain inventories and implications for the liner shipping industry," Maritime Policy & Management, Taylor & Francis Journals, vol. 42(3), pages 246-262, April.
    • Handle: RePEc:taf:marpmg:v:42:y:2015:i:3:p:246-262
    DOI: 10.1080/03088839.2013.869364
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    Cited by:

    1. Zhang, Abraham & Zheng, Zhichao & Teo, Chung-Piaw, 2022. "Schedule reliability in liner shipping timetable design: A convex programming approach," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 499-525.
    2. Lam, Jasmine Siu Lee & Zhang, Xiunian, 2019. "Innovative solutions for enhancing customer value in liner shipping," Transport Policy, Elsevier, vol. 82(C), pages 88-95.
    3. Rau, Philipp & Spinler, Stefan, 2017. "Alliance formation in a cooperative container shipping game: Performance of a real options investment approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 155-175.
    4. Rau, Philipp & Spinler, Stefan, 2016. "Investment into container shipping capacity: A real options approach in oligopolistic competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 130-147.
    5. Zhao, Shuaiqi & Yang, Hualong & Zheng, Jianfeng & Li, Dechang, 2024. "A two-step approach for deploying heterogeneous vessels and designing reliable schedule in liner shipping services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 182(C).

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