Transpacific Route Hit Hard by Cancellations

• The shipping industry continues to face a wave of challenges, with a significant number of cancelled sailings and rising freight rates putting pressure on shippers.
• According to Drewry’s latest Cancelled Sailings Tracker, a 9% cancellation rate is expected across major East-West routes in the coming weeks.

The data shows that 61 out of 668 scheduled sailings on Transpacific, Transatlantic, and Asia-North Europe & Med routes have been cancelled between June 24th and July 28th. The Transpacific Eastbound lane is feeling the biggest pinch, with over half of the cancellations impacting this route.

Carriers adjust to changing landscape

Shipping alliances are adapting by strategically cancelling sailings. OCEAN Alliance leads the pack with the most cancellations, followed by 2M and THE Alliance. Despite these adjustments, shippers can still expect roughly 91% of sailings to occur on schedule over the next five weeks.

Perfect storm of disruptions

Several factors are driving the current situation. Vessel delays and rising shipping costs are prompting shippers to move cargo early to avoid further disruptions and price hikes. Concerns about potential labor strikes at US East and Gulf Coast ports in October are also influencing these decisions. Additionally, recent port strikes in Europe and ongoing conflict in the Red Sea are creating further obstacles.

Ocean freight rates on the rise

The Red Sea conflict is having a ripple effect on global shipping costs. Ocean freight rates from Asia are skyrocketing due to strong demand and ongoing congestion. This is impacting routes across the Western Mediterranean, Far East, and now even Northern Europe.

Peak season surcharge on the horizon

With disruptions and high demand, major carriers are expected to raise Peak Season Surcharges in early July. It remains to be seen if the market will fully absorb these additional costs.

Drewry offers support

In these uncertain times, Drewry offers a comprehensive suite of research and advisory services to international shippers. This includes contract advice, freight rate forecasts, and surcharge insights to help businesses navigate the challenges of the current shipping environment.