Shipping with Maersk Spot: What is Lead Time and how it impacts my spot shipping cycle

Lead time can mean different things in different contexts of logistics. There are generally three types of lead times:

• Material lead time: This is more relevant to supplier relationships. It’s the time between placing the order for raw material and finally receiving it.
• Production lead time: This one’s based on internal processes. It’s the time the manufacturer takes to finish producing goods once raw materials arrive.
• Customer lead time: This is the time taken after the order is received and till it arrives at the customer’s doorstep. It includes all intermediary processes like production, shipping, storage, and delivery.

In spot shipping, we are concerned with customer lead times — primarily, the time it takes for a shipment to reach its final destination right after booking.

Several factors can impact lead time during shipping. Here are some of the key ones:

• Transportation delays: This is a broad category that encompasses various issues that can slow down shipments. Traffic congestion, bad weather, labor strikes at shipping companies, and even things like equipment breakdowns can all lead to freight delays.
• Geographical distance: Greater distances between origin and destination naturally add to lead time. This is especially true for international shipping, where customs clearance procedures can add additional time.
• Order complexity: Bulky or heavy items, perishable goods, or those requiring special handling will take longer to ship compared to standard packages.
• Customs clearance: For international shipments, customs clearance procedures can significantly increase the lead time. The complexity of the paperwork and the efficiency of the customs agency involved can both impact this.
• Unforeseen events: Instances beyond human control, like natural disasters or pandemics, can disrupt transportation networks and cause significant delays.

READ MORE: Top 9 reasons for shipping delays

Should you care about lead time delays as a business?

Yes. Because it directly impacts some of the most critical aspects of your operations.

Unpredictable lead times can throw a wrench into your inventory planning and production schedules. When shipments are constantly behind, the costs associated with expediting shipments, storing excess, and paying penalties such as demurrage and detention (D&D) add up quickly. Delays are a surefire way to tick off your customers, who expect fast and smooth delivery.

So yes, controlling lead times is more than just a delivery experience issue.

If such an event occurs which can delay your spot shipment’s planned journey, you will automatically be notified of these reasons, along with any changes in estimated arrival time (ETA) or final delivery time.

READ MORE: How do you set up custom notifications on Maersk?

In another instance, if Maersk fails to load your cargo on the booked vessel or if there’s a delay of more than three (3) days from Maersk’s end, we’ll compensate you for the same. But, if you have waived off the loading guarantee (which means your container can get rolled), compensation isn’t applicable in case of any delays.

Maersk Spot offers me a loading guarantee. Why would I select ‘Rollable’?

All your Spot bookings come with a loading guarantee. But, if your freight is not urgent or time-sensitive, you can mark it as ‘rollable’ — i.e., we may move your container to a later sailing date than the one given in the booking confirmation.

Of course, when you select ‘rollable’ and if your cargo gets rolled, we pay you a ‘Rollable Compensation Fee’ in exchange.

READ MORE: Rollable cargo, cancellations, and booking amendments

Impact of lead time on spot shipping: The ups

If a business has a short lead time, it might be more likely to consider spot shipping, especially if traditional contracted rates are high. This is because spot rates can be more flexible and potentially lower depending on market conditions. However, the gamble is that rates could also be higher than expected, potentially causing delays or exceeding budget.

Impact of spot shipping on lead time: The downs

Fluctuations in spot rates can introduce uncertainty into lead time calculations. If a business relies heavily on spot shipping, unexpected rate spikes could lead to delays in acquiring transportation, impacting the overall lead time.

Much weight falls onto better planning and airtight documentation to minimize your lead time, especially for spot shipping. Here are some strategies you can employ:

• Be flexible with transportation modes: While ocean freight might be the most cost-effective option, consider intermodal transportation options, like ocean and inland together, if they reduce the lead time and provide potentially faster delivery.
• Plan ahead when possible: Even in spot shipping, some planning can help. If you anticipate faster shipping or shorter lead time for specific shipments, pre-arrange quotes with carriers to save time. Also, focus on forming long-term partnerships with a single carrier who understands your needs and promptly provides the required services.
• Prioritize communication: Clear and timely communication with carriers and other stakeholders is essential. Ensure everyone involved understands the urgency and communicates any potential delays promptly.
• Utilize digital tools: Many logistics service providers (LSPs) offer real-time tracking and online shipment management platforms. These tools can help you identify potential bottlenecks and adjust the route or schedule to optimize them.

READ MORE: Enhancing your Maersk experience: A guide to useful tools and features

Remember, minimizing lead time comes at a cost. Carefully evaluate the urgency of your needs and weigh the trade-offs between speed and budgets when making decisions about your freight.

1. Why is it called lead time?

It’s called lead time because it represents the time required to “lead up” to the final delivery of the shipment to the customer or consignee.

2. Should I consider spot rates when calculating lead time?

Definitely. When estimating lead time, it’s wise to factor in a buffer for potential delays caused by securing a spot carrier, especially if the shipment is time sensitive.

3. What factors can extend the lead time when using spot shipping?

In addition to the time it takes to book a spot shipment, customs clearance delays or unexpected weather events can disrupt even the most meticulously planned spot shipment.

4. How far ahead do I need to book my shipment for Maersk Spot?

Booking as far ahead as possible is always best, but it will at least need to be far ahead enough to meet the stated deadlines in order to successfully sail.

5. How much buffer time should I add to my lead time when using spot shipping?

This depends on the urgency of your shipment and the volatility of the spot market. A good rule of thumb is to add 10-20% extra time to your lead time to account for potential delays.

6. How do I know the transit time between ports when spot shipping?

You can visit the schedules page for your required routing.

7. I need to make changes to my Maersk Spot booking. How will it affect my lead time?

Depending on the changes you need to make, amending your booking can delay (or advance) your overall shipment departure and arrival times, if the original timeline can no longer be met.

8. What happens to my freight’s lead time if I don’t have complete documents?

In such cases, we won’t be able to load your spot freight on the vessel until the documentation is accurate and complete. This will, by extension, increase your shipment’s lead time.

9. I need to submit shipping instructions (SIs) for my Maersk Spot shipment. Will that increase my lead time?

Whoever is responsible for sending the shipping instructions, you’ll have visibility to the deadline for doing so. Make sure to meet this deadline in order to ensure successful sailing as intended. Wanna know how to add shipping instructions to your Maersk Spot booking? Click here.

10. If there’s a default on my part as a shipper, how will it affect my cargo’s lead time?

If your spot freight is not loaded due to a problem/issue on your part — like incorrect paperwork, non-compliance with container weight limits, or late delivery to port — you need to correct the defaults first. In most cases, we will try to accommodate your container on the next vessel with available space. By extension, the lead time will increase accordingly. We might recalculate the charges for your spot shipment.