Drewry: Blanked Sailings Increasing but Less Impact Expected

During the spring and early summer, the ocean carriers blanked a large number of sailings departing Asia creating repercussions for shippers and ports. UK maritime research firm Drewry forecasts a new wave of canceled sailing in the coming weeks although they believe it will have less impact on shippers.

Responding to the COVID-19 pandemic, Drewry Cancelled Sailing report shows that the ocean carriers canceled up to 46 East-West sailings every two weeks in April. By September they report that the number had fallen on average to just four canceled sailings per week.

“The shipping lines have now blanked a total of 24 sailings for the 2-week period commencing September 28,” according to Drewry’s Cancelled Sailings Tracker Report. Given the already tight market conditions on the transpacific and Asia-Europe routes, Drewry is providing an analysis of some of the trends that it believes are affecting the market starting next week.

The analysis highlights that over half of all the canceled sailings are on the transpacific routes with the remainder mostly on Asia to Europe routes. There are only minor cancellations reported on the transatlantic routes.

One element that may be in play during this time is that the first week of October is China’s Golden Week celebration. Typically demand falls during this period as many factories and businesses are closed for the holiday. “The sailing cancellations in the transpacific trade appear to be at a level in line with the seasonality seen in previous years,” says Drewry.

Drewry also notes that Chinese regulators were pressuring ocean carriers to add volume to their routes. The Chinese regulators summoned representatives of the major carriers to China to explain the sudden increase in rates. China expressed its hopes that the carriers would add back more capacity to stabilize and reduce rates.

According to Drewry’s Cancelled Sailings Tracker report, capacity on the routes between Asia and North America has increased by 11 percent between September 2020 and the year earlier. Capacity, however, on routes between Asia and Europe is reported to have declined one percent year-over-year with a higher rate of canceled sailings. “This partially reflects less buoyant demand for Asian imports in Europe than in North America,” says Drewry.

In Drewry’s opinion, access to capacity on the Asia-Europe route in October will be very tight and spot rates are likely to rise, whereas the situation of shippers is likely to ease on the transpacific route. Further, they report several shippers had told Drewry that they have already been asked by their carriers or forwarders to pay price premiums or equipment imbalance surcharges on the Asia-Europe route to secure capacity.

Many of the leading ports around the world have also expressed similar confidence that barring another significant virus-related lockdown they anticipated that the worst of the blanked sailings is over in the shipping industry.