Blank sailings have become more than just a fleeting trend – they’re now a norm in the world of global shipping which continues to face one challenge after the other. In fact, canceled sailings have ingrained themselves as ‘part of normal shipping business life’ on crucial east-west container trade lanes.
But are blanked sailings really as prevalent as they seem?
Did you know that during June and July, a striking 10.8% of all regular sailings on the 25 Central China – Europe loops operated by the major alliances were blanked? Similarly, another source of data suggests a steady rise in transpacific blanked sailings during July and August.
But, there’s more to the tale. With just 573 sailings scheduled across mainlines for the month, after accounting for blank sailings, this number is down from the 600-650 range witnessed between April and July. However, it’s a slight improvement from the January low of 545 sailings.
The juggling act between capacity and demand is a delicate dance for shipping companies. Experts suggest that reducing capacity could ease the strain on spot freight rates. Meanwhile, some also say that alongside the surge in blanked sailings, moderate increases in peak season volumes have been observed. This shift marks a turning point after more than a year of dwindling rates for carriers.
But what about the impacts on supply chains?
Andy Lane, a partner at Singapore’s CTI Consultancy, weighs in, highlighting the silver lining of alliances – the potential for rerouting, which could mitigate delays to just a few days. However, this shift requires robust inventory buffering until accurate forecasting and closer collaboration come into play.
As we reflect on the numbers, it’s worth noting that proforma capacity doesn’t always align with deployed capacity. Delays, blank sailings, and other operational shifts can lead to discrepancies. About 10-15% of proforma capacity often falls through the cracks.
While last year’s strikes and bottlenecks led to a 25% loss in proforma transpacific capacity, amounting to 6.1 million TEUs. At present, a 3.5 million TEU loss in capacity accounts for a 17% decrease, leaving an effective deployed capacity of 17.1 million TEUs – just a 2.4% drop compared to 2022.
In the midst of the data frenzy, what needs to be remembered is that while aggressive capacity cuts might make for a compelling narrative, understanding the underlying numbers is key to making strategic decisions. As the shipping industry charts its course through these turbulent waters, adapting to change is the compass guiding the way.
Logistics Insider August 2023 – Anniversary Issue