Container carriers are expected to provide more deep sea capacity out of Asia over the Chinese New Year holiday, beginning 12 February, than in any other year, reports the Loadstar.
Head haul sailings cancelled
Announced blank sailings for what is normally shipping’s slack season are far fewer this year than previously, according to data from liner database eeSea’s Blank Sailings Tracker.
It shows that, across the transpacific, Asia-Europe and transatlantic trades, just 1.7% and 0.6% of head haul sailings have so far been cancelled in February and March respectively, compared with the 19.9% and 9.4% sailings cancelled in the same months last year.
And very few sailings have so far been cancelled for the second quarter, whereas last year, cancellations amounted to 14.7% of expected sailings.
Tight ocean capacity
According eeSea’s Trade Capacity Index, this has translated into a year-on-year increase in teu capacity of 7.6% this month over January 2020, and the data also shows February and March are up by 34% and 17% respectively, partly due to fewer cancellations.
Simon Sundboell, chief executive of eeSea, said: “It’s understandable that cargo owners and their related interests are frustrated by the tight ocean capacity situation these days.“
“The impact on their businesses is huge. But there seems to be an impression that carriers are deliberately holding back capacity to push up freight rates. We don’t see that. In fact, effective trade capacity is up.“
“Just reading the news, we can see that carriers are snapping up any available charter tonnage. There is no idle capacity left, carriers are delaying scrapping, and the first new tonnage orders have even been placed,” Mr Sundboell added.
Blank sailings on transpacific and Asia-Europe routes
New data published by Sea-Intelligence Consulting this week chimed with that analysis, showing that, as of the beginning of this year and with just six weeks to go until Chinese New Year, carriers have only announced five blank sailings on the transpacific and seven on Asia-Europe during the holiday.
Sea-Intelligence said last year 73 sailings had been blanked due to Chinese New Year (although a further 15 were blanked as the pandemic began in earnest) and 67 in 2019.
“At present, 2021 Chinese New Year blank sailings are far below previous years and, if the relative capacity reductions of previous years should be reached, carriers would need to blank 37-41 sailings on Asia-US west coast and 12-15 sailing on Asia-North America east coast,” Sea-Intelligence CEO Alan Murphy said.
“On Asia-North Europe, an additional 14-17 sailings would have to be blanked to reach previous relative levels, while on Asia-Mediterranean, an additional 4-6 sailings would have to be blanked.“
“It is not possible to predict the optimal level of blank sailings, but it is clear that the carriers are currently scheduled to blank far fewer than in previous years.”
Rising regulatory risk
Another reason carriers are highly unlikely to slash CNY services to the usual extent involves regulation.
Freight rates are historically high and have already caught regulators’ attention. The Federal Maritime Commission is monitoring carriers’ blank-sailing actions and increased carrier reporting requirements in late November.
The European Shippers’ Council and European Freight Forwarders Association sent a joint letter to the European Commission on Monday alleging that carriers are violating contracts and “unilaterally setting rates far in excess of those agreed in contracts.”
In its initial public offering (IPO) registration, the carrier ZIM disclosed that two of its subsidiaries “became involved in two separate industry-related investigations regarding competition law issues.”
It also disclosed that “a claim was filed against the company, together with other carriers operating in that jurisdiction, regarding commercial issues. The involved carriers jointly responded to the claim.” ZIM did not disclose the jurisdiction or the nature of the claim.
It is still theoretically possible that carriers could blank their usual number of CNY sailings. But to do so, they would need to announce a very large number of sailing cancellations in the next few weeks — at the very time rates are historically high.
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Source: The Loadstar
