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Blanked box sailings ups backhaul shippers' rates in capacity crunch

THE three leading container shipping alliances have blanked sailings as the prolonged factory shutdown over the Chinese New Year holidays and Wuhan coronavirus outbreak in China have dented cargo volumes

Blanked box sailings ups backhaul shippers' rates in capacity crunch

THE three leading container shipping alliances have blanked sailings as the prolonged factory shutdown over the Chinese New Year holidays and Wuhan coronavirus outbreak in China have dented cargo volumes

20 February 2020 - 06:36

THE three leading container shipping alliances have blanked sailings as the prolonged factory shutdown over the Chinese New Year holidays and Wuhan coronavirus outbreak in China have dented cargo volumes.

Danish maritime analysts at Sea-Intelligence report that the rapid mass-cancellation of sailings is very likely to cause capacity shortages for back-haul shippers in three to six weeks' time, depending on where shippers are based, reported, Athens' Container News.



'Back-haul shippers should therefore now prepare not only contingency plans for potential capacity issues, but also for significant price spikes,' said a Sea-Intelligence report. 'In terms of operations, we should expect larger than normal delays in the sailing schedules, an effect which will be felt for several months as the delayed vessels work their way around their planned loops.'



Capacity issues could spread to other ports and countries, particularly Vietnam, where manufacturing plants have picked up some of the slack, which could lead to 'capacity issues in secondary ports as well as an impact on feeder carrier rotations.'



Coronavirus voided sailings on the transpacific trade have reached 25, with carriers on the Asia-North America west coast trade lane announcing 23 blank sailings.



'In total, roughly 231,100 TEU, 210,800 TEU on Asia-North America west coast and 20,300 TEU on Asia-North America east coast, or six per cent of the total capacity, are slated to be taken out of the Pacific trades in the analysed eight-week period,' according to Sea-Intelligence.



The Asia-Europe trade will see a similar pattern with 22 blank sailings, with 16 on Asia-North Europe and six on Asia-Mediterranean. This translates into a total capacity withdrawal of 364,800 TEU, 276,900 TEU on Asia-North Europe and 88,000 TEU on the Asia-Mediterranean route, or 10 per cent of the total capacity on the trade.



Cuts by the alliances are not, however, equal explains Sea-Intelligence, with THE Alliance only withdrawing capacity from one route, the Asia to US west coast trade, out of the four major trade lanes as a result of the coronavirus.



'Even then, they are slated to blank a lower amount compared to 2M and Ocean Alliance on that trade lane,' said Sea-Intelligence, adding that in all four major trade lanes, '2M has announced blank sailings equalling roughly 269,200 TEU, which translates into 12 per cent of their total capacity.



'Ocean Alliance is slated to blank 272,300 TEU or 10 per cent of its total capacity. THE Alliance will only blank two per cent of its total capacity, which equates to 41,200 TEU, all to be blanked on Asia-North America west coast route.'



On February 7 Sea-Intelligence reported that exports from China has been slashed by up to 350,000 TEU per week, costing the industry US$350 million every week.


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