Mike Wackett writes in The Loadstar about the withdrawl of headhaul by Asia-Europe and transpacific carriers to a maximum capacity of 3 m teu. The aforementioned data is based on the survey conducted by Sea-Intelligence.
Sea-Intelligence’s key findings of the survey
- The total capacity removed from the tradelanes is 2.4 times higher than the norm in the post-Chinese New Year slack period.
- As of 11 April, 384 sailings have been blanked across various deepsea trades.
- Another 83 cancelled by carriers in the past week alone.
- The industry faces a decline in demand of some 6.4m teu globally,
- This is due to the consumer lockdowns and restrictions now impacting half of the world’s population.
“If the world returns to normal after the second quarter, and the carriers do not cancel any further sailings – which appears quite unlikely, this would still lead to a demand decline for 2020 of 4%,” said Sea-Intelligence chief executive Alan Murphy.
Indeed, one Asia-North Europe carrier told The Loadstar there would have to be “many more blankings” to adjust demand to supply, adding: “The booking cancellations are massive. If we leave it as it is now, the remaining ships will be half full at best.”
A more clear picture by the Loadstar
- Most of the carriers are planning to announce more blank sailings.
- Several carriers are now considering routing some ships via the Cape of Good Hope for both head and backhaul.
- They carry more capacity, due to the extended transit times, and saving Suez Canal tolls – up to $750,000 for a 24,000 teu ULCV – and taking advantage of cheap bunker prices.
- Many shippers are in no hurry to receive loaded containers in Europe.
- This is due to Covid-19 movement restrictions and a shortage of storage capacity.
In addition, instructions are to be given to carriers to off-hire as much tonnage as possible and not to charter-in ships without obtaining top management approval.
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Source: The Loadstar