Sea Intelligence Reports Carriers Increasing Blank Sailing This October

  • September 12, 2022
  • News

The major liners are relying on blank sailing from their respective schedules to control capacity after an extended period of arranging every available ship to meet the increase in demand. As per the report of Sea Intelligence, the shipping lines are expected to surge a number of canceled sailings above historic norms in the pretext of the upcoming golden week holiday tied to China’s Autumn Festival. Such blank sailings have been a preferred way of carrying to match supply with demand and artificially managing freight rates by cutting capacity short.

During the years 2020 and 2021, the shipping lines had a tough time maintaining capacity in line with the demand. The vessels were operating at capacity. Backlogs were increasing at the points of origin even if the carriers included additional vessels to the routes. Similarly, at the destination ports, particularly in the US and Northern Europe, crowding increased as the ports were stocked with volumes even when some vehicles were behind schedule and port wait time increased to a record high. Some vessels were stuck outside the port, and carriers could not meet their weekly departure as scheduled leading to blank sailings. Recently, a report published by Sea Intelligence in August 2022, there has been a steady drop in the number of days waiting at ports, and the liners have been able to maintain their schedules.

Alan Murphy, CEO of Sea-Intelligence has observed that in the last few months, demand growth has slowed down and vessels are not fully utilized as per their capacity, and this is where the shippers tend to rely on tactical blank sailings to cut the increase in the freight rates. Now the week of Oct 1 to Oct 7 is an opportunity to reduce capacity to map against the falling volumes and show the reduction in the spot freight rates. They see a higher number in Asia-North Europe during the Golden week, but a reduction after that. As per the data calculations, there is an expected decrease at a little under 20% of TEU capacity which is in line with 2019 (pre-covid) but is higher than the 2014-18 average.

These reductions in capacity come at what is typically a peak shipping period on most trade lanes as retailers build inventory for year-end sales. It remains to witness how long the shippers will take ahead these blank sailings or if they are expecting to sustain lower capacity in response to the drop experienced on most major shipping trade lanes.