Table of Contents
What is Predictive ETA?
How Accurate are ETA Predictions?
3 Key Benefits of Using Predictive ETAs
5 Things to Consider When Selecting a Predictive ETAs Vendor
Delays, increased demurrage and detention fines and customer experience concerns all stem from a lack of visibility throughout the supply chain.
Yet, predictive estimated time of arrival (ETA) can save the day because it can help you through such scenarios, thanks to its real-time visibility quality.
But the question remains; how accurate and reliable is the tracking data collected?
This article will answer that question and explore the meaning of predictive ETA in supply chain and logistics operations, its advantages and accuracy, and what you should consider when choosing a vendor.
What is Predictive ETA?
First things first, estimated time of arrival (ETA) is the time when a ship or vessel plans to arrive at a certain location.
On the flip side, predictive ETA is a dynamic method of calculating the time that a vessel is expected to arrive at its destination.
It uses multiple data to proactively account for unpredictable limitations (weather conditions, port congestion, etc.).
Before diving into the topic, let’s clarify three important terms:
Planned Expected Time of Arrival (ETA): The ETA you utilised to estimate the time of arrival at the port of discharge in your supply chain planning.
Actual Time of Arrival (ATA): The actual time at which the vessel arrives at the port of discharge.
Predictive ETA forecasted at: This is the phase at which the predictive ETA was forecasted. The greater the distance from the ATA, the lower the degree of certainty in an accurate predictive ETA.
Now that these terms have been defined, let's look at ETA predictions’ accuracy and the three primary benefits of implementing predicted ETAs.
How Accurate are ETA Predictions?
There are three dominant solutions when determining ETA in the shipping industry.
They range in complexity from basic maths to sophisticated data science.
1. Remaining distance or average speed:
This formula-based strategy is simple to adopt but overlooks changing variables like weather or at-sea traffic, which can completely derail a shipment.
As a result, because of the method's low accuracy, businesses buffer their timelines and labour planning to reduce risk and shippers are more likely to face demurrage and other fines due to unpredictable delays.
2. Algorithms aimed toward consumers:
Consumer-facing ETA solutions, such as Google Maps ETA, use cutting-edge data science and often deliver more accurate ETAs than the previous approach, thanks to acquiring real-time datasets from dynamic sources.
In addition, such consumer-facing ETA solutions are based on fundamental assumptions about consumer transportation patterns.
For example, the average customer wants an ETA that anticipates vessels will travel the shortest possible route from Point A to Point B, with no pauses in between.
Shippers, on the other hand, have quite different concerns and, as a result, need an ETA that considers adverse weather conditions, port congestion and other similar constraints.
3. Algorithms designed for commercial shipping:
Commercial shipping algorithms take into account hundreds of industry-specific data points to provide the most accurate predictions possible and have thus established the benchmark for estimating ETA.
Such data feeds include facility business hours and breaks, allowing shippers to be confident in arranging personnel and inventory more efficiently for their supply chain and logistics operations.
Shippers that use bespoke machine-learning algorithms to determine ETA can save millions of dollars by eliminating late rescheduling penalties, optimising inventory and labour planning and increasing customer satisfaction.
MarineTraffic, provider of ship tracking and maritime intelligence, employs various elements to deliver accurate predictive ETA information, as it uses both global coverage and position frequency.
The Live Map by MarineTraffic enables shippers to navigate any vessel of interest quickly and efficiently.
It is automatically and regularly updated (you can also manually refresh it) with the most recent information on the location of each vessel.
In addition, you can zoom out to gain a global overview or zoom in to have a closer look at a specific area.
When new automatic identification system (AIS) data becomes available, the location of each vessel transmitting AIS signals is recorded on MarineTraffic's AIS recorders.
This data is collected, decoded and shown in near-real time on the MarineTraffic website.
After discussing the accuracy of ETA prediction and what technologies vendors use to calculate it, let’s look at the benefits it comes with.
3 Key Benefits of Using Predictive ETAs
ETAs are more precise than ever before, opening up new opportunities for your company to boost productivity and avoid expenses.
Let’s check how predictive ETAs can help your supply chain visibility as follows.
Benefit #1: Avoid detention costs
Using a predictive ETA feature enables you to make proactive modifications to downstream your supply chain activity.
For instance, ships can use predictive ETA to notify their arrival time and make dock appointments and other required arrangements for pickup.
This helps reduce wait time and streamlines the unloading process.
In this manner, shippers can return containers to the shipping company more quickly and avoid detention fees.
Benefit #2: Improve the delivery experience and elude demurrage costs
When a ship is late and not returned to the shipowner on the agreed date, the shipper must pay demurrage costs for utilising the equipment for an extended period.
Another reason for paying such a cost is that the shipowner isn’t able to use the full potential of its fleet, which translates into financial losses.
Overall, this situation delays shipments and potentially disrupts supply chain management.
Benefit #3: Enhance the planning process
Operations planning must be done with high precision since it is a demanding procedure, especially at big ports that handle many vessels, containers and bulk cargo every day.
Knowing an exact ETA enables port management to plan for the arrival of ships and prevent significant congestion.
Hence, predictive ETA can significantly help with planning, positively affecting all the necessary resources available, such as manpower and equipment, and helping with examining the availability of storage facilities.
In case of delays in vessel arrival, port officials can get notifications and perhaps reroute other ships so that they don’t have to wait for days before berthing.
5 Things to Consider When Selecting a Predictive ETAs Vendor
There are several factors you should consider when selecting a predictive ETA vendor to minimise supply chain disruptions and improve predictive information and functionality.
Ask yourself these questions before making any decision:
1. How do you define an actionable ocean shipment delay for your business?
Most probably, if you knew that your ocean shipment would arrive with a one-hour delay, you wouldn’t change anything in your downstream supply chain planning.
For most supply chain and logistics professionals, however, a delay of over one day would be actionable.
Find out where that line is for your business and ask the vendor how accurate their ETAs are against your definition.
Let’s assume that you would act if the shipment were to arrive with over one day’s delay when compared to the planned ETA.
To make it visual, the point here is to identify the minimum amount of A below that would trigger an action for your business.
2. How many days in advance would a delay prediction be actionable for your business?
What if you were informed of the delay prediction just one day before the vessel arrived at the port? Would that information still be actionable?
From what point onwards would a delay prediction be irrelevant as there wouldn’t be enough time for changing anything in your downstream supply chain?
For the purpose of this example, let’s assume that you would find this information valuable if provided up to 48 hours before the vessel’s actual time of arrival (ATA).
To help you visualise this, the point here is to identify the minimum amount of B below that would provide enough time in advance for a change in your downstream planning.
3. Now flip the question. From what point and earlier would a delay prediction not add significant extra value?
Would your options change if you knew about the delay 20 days in advance or 10 days in advance (assuming the cargo is in transit)?
Try to keep it real and select the time window that really makes sense for your business. For the purpose of this example, let’s assume this would be 10 days in advance.
The point here is to identify the maximum amount of B that would add significant extra value in the sense of giving you more or cheaper options.
4. Which service lines or trade routes are relevant for your business?
The provider's coverage and route complexity in each trade route affects the forecasted ETA accuracy. Let’s assume for this example that most of your shipments are in the ASIA-EUROPE and ASIA-US regions.
5. What types of cargo are relevant for your business?
Many vendors cover just container tracking, which might require using more than one vendor to cover your visibility needs if you or other parts of your business use other types of cargo.
Let’s assume for this example that you are interested in both containers and dry bulk.
So, in our example, when you reach out to vendors, you should be looking to assess who is better at forecasting ETAs with deviation from ATA up to 24 hours max. when forecasted 2-10 days before ATA.
And more specifically, in the ASIA-EUROPE and ASIA-US regions for containers and dry bulk carriers. It is important to clarify here that any forecasted ETA vs ATA accuracy deviation of fewer than 24 hours would not add more value to the solution, as it would not trigger any different action.
To put it all together, you identify A and B as explained above and then use that understanding to assess which vendor’s C (see below) is not more than A, as anything over A would be as invalid as the Planned ETA.
Now Over to You
To summarise, predictive ETA can help provide consistent real-time updates for organisations.
This saves time, boosts transparency, and makes shipping more reliable via fleet management, coastal monitoring by authorities and other vessel tracking operations.
Also, predictive visibility enables customers to plan ahead and avoid costly charges like demurrage and detention fees.
This is a vital component in the marine value chain for fulfilling customer expectations.
If you have any questions in mind or you look forward to implementing a reliable monitoring method, feel free to book a demo with MarineTraffic. Let’s talk soon!
