Shipping Industry Update: Cancellations And Rate Surges Across Major Routes

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Impact of Cancelled Sailings

Across the major East-West headhaul trades: Transpacific, Transatlantic and Asia-North Europe & Med, 53 cancelled sailings have been announced between week 27 (1 Jul-7 Jul) and week 31 (29 Jul-4 Aug), out of a total of 675 scheduled sailings, representing 8% cancellation rate.

During this period, 53% of the blank sailings will occur on the Transpacific Eastbound, 28% on the Asia-North Europe and Med and 19% on the Transatlantic Westbound trade.

Over the next five weeks, OCEAN Alliance have announced 16.5 cancellations, followed by THE Alliance and 2M with 9.5 and 4 cancellations, respectively. During the same period, 23 blank sailings have been implemented by non-Alliance services.

Service Reliability

As can be seen in the chart above, we see a modest improvement in carriers’ service reliability: on average 92% of the ships are expected to sail as scheduled, over the next five weeks.

On 27 June, Drewry’s WCI Composite Index jumped 4% WoW to $5,318, more than tripling (244%) YoY. Rates on Transpacific and Asia-Europe and Med routes grew 4% WoW, while Transatlantic rates fell 2%.

Houthi attacks in the Red Sea have forced ships to navigate longer routes around the Cape of Good Hope. This substantial detour is compounded by an early peak season demand and severe port congestion, creating a squeeze on supply and pushing ocean spot rates from Asia higher in June.

Operational Challenges

Moreover, operational challenges such as container shortages, especially of 40ft equipment at South Asian ports, and increased traffic congestion are exacerbating the situation, further driving up rates. Consequently, Asia-Europe WB and Transpacific EB spot rates in July are anticipated to stay elevated, mirroring the high levels observed in June.

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Source: Drewry