Asia-Europe container capacity could shrink by 38pc with May's cancelled sailings
BLANK sailings will peak on the Asia-Europe trades in the next three weeks, with carriers withdrawing close to 40 per cent of capacity in an attempt to match their available space with evaporating demand
BLANK sailings will peak on the Asia-Europe trades in the next three weeks, with carriers withdrawing close to 40 per cent of capacity in an attempt to match their available space with evaporating demand.
Cancelled sailings linked to COVID-19 until week 28 beginning July 6 currently stand at 55 on Asia-North Europe and 38 on Asia-Mediterranean, according to Sea-Intelligence Maritime Consulting, which said the next three weeks would see 35 per cent of Asia-Europe capacity pulled from the trade.
But, maritime academic Theo Notteboom said the withdrawn capacity could be as high as 38 per cent, reports IHS Media.
The unprecedented number of cancelled sailings will extend until July, a clear indication of low demand expectations by carriers and a lack of forward bookings. That means Europe's hub ports will take a hit at least through the second quarter.
Mr Notteboom, a professor of maritime studies affiliated with the Shanghai Maritime University, the University of Antwerp, and Ghent University, said if container throughput at Europe's hubs declined 20 per cent this year, that would likely mean that over the next few months, volume at the ports would drop as much as 35 per cent.
He explained that containers shipped from China after measures to limit the spread of the coronavirus eased and factories were reopened in March had all arrived in European ports by mid-April.
'But from now there will be a huge reduction in volume because of the enormous numbers of blanked sailings from Asia,' Mr Notteboom said. 'This week and the last week of April will be the worst in terms of blanked sailings on Asia-Europe, with 38 per cent of capacity removed.'
Mr Notteboom compiles the IAPH-WPSP Port Economic Impact Barometer with professor Thanos Pallis from the University of the Aegean and Universidad de Los Andes; the weekly survey takes the pulse of port operations around the globe.
In its latest report, the barometer showed an interesting development. Despite the huge number of blanked sailings, the decline in the number of deep-sea container vessel calls was being counterbalanced by carriers increasing the frequency of regional feeder services.
'Ports are seeing more calls by regional and short-sea vessels because cargo from congested yards and depots is being moved out of ports and closer to their final markets,' Mr Notteboom said. 'There is also a repositioning of cargo going on in Europe between depots and distribution centers because of the low demand.'
The ports survey found that at some ports in Europe, yard congestion was the result of laden imports of non-essential goods, including new cars, which remained in port longer than usual. This left storage capacity within the ports in critical short supply, but the report noted that respective governments have allowed the weekly release and acceptance of import and export of non-essential goods on an average of three days a week, a move the port barometer noted had brought down storage utilisation at container yards by 60 per cent.