ServiceTracker™

Blanked sailings not enough to keep rates afloat

   Container shipping carriers have been extra aggressive this year in blanking sailings on key trade lanes around China’s National Day Holiday at the beginning of this month.
   They are showing no signs of letting up, with various blanked sailings announced throughout the remainder of 2019.
   However, spot container rates continue to sink, especially as average vessel size on key trades continues to rise, signaling that carriers need to keep megaship orders at bay and consider outright suspending more loops, in conjunction with blanking sailings.
   The composite reading of the Freightos Baltic Index (FBX) stood at $1,349 per FEU as of Oct. 11, marking the lowest level since the first week of June 2018. 
   Spot container rates from China/East Asia to WCNA stood at $1,298 per FEU as of Oct. 11, while rates from China/East Asia to ECNA totaled $2,697 per FEU, down 44% and 22% year-over-year, respectively, according to the FBX.
   From China/East Asia to North Europe, spot container rates stood at $1,224 per FEU as of Oct. 11, while rates from China/East Asia to the Mediterranean totaled $1,504 per FEU, down 18% and 9% year-over-year, respectively, the FBX showed.
   The two charts below, built using data from BlueWater Reporting’s Blanked Sailings tool, show the number of blanked voyages on key trade lanes in October 2019 versus October 2018. Blanked sailings this year are up substantially on the China to North America trade, and are up slightly on the China to North Europe trade, and there is potential that more blanked sailings for this October could be detected in the coming weeks. Since some of these services operate on the China-North Europe and China-Mediterranean trades, they are included in both figures.

2019_10_17Cc

Looking at the remainder of the year:
     • The OCEAN Alliance will blank 14 sailings on the Asia-North Europe/Mediterranean trade between the last week of October through December, according to data in a press release issued by OOCL earlier this week; 
     • The OCEAN Alliance will blank nine sailings on the Asia-North America trade between mid-October and early November, according to data in a press release issued by OOCL on Sept. 25;
     • HMM’s Asia-North America PS2, which Maersk and MSC purchase slots on, will blank a sailing in mid-November, according to BlueWater data, in conjunction with an MSC announcement this week; 
     • THE Alliance will “seasonally suspend” its Asia-North America EC3 loop in the coming weeks and is expected to return to service in March 2020, according to a press release issued by Hapag-Lloyd last week;
     • THE Alliance’s  Asia-North America PS5 and PS7 loops will gradually downsize their vessels in November, with this change expected to last until March 2020;
     • And THE Alliance’s Asia-North Europe FE2 and FE4 loops are scheduled to each blank a voyage in November, while its Asia-Mediterranean MD3 is also expected to blank a voyage in November.