Alliances schedule 75 blankings for Q3, as hopes of peak season demand fade
2M partners Maersk and MSC are to extend the suspension of their AE2/Swan Asia-North Europe ...
2M partners Maersk and MSC are to suspend one headhaul Asia-North Europe loop and one Asia-Mediterranean loop for the entire second quarter as the liner industry struggles to manage an avalanche of cancelled bookings.
Following last week’s blanking of the North Europe AE1/Shogun service and the AE20/Dragon loop to Mediterranean ports, on Friday evening Maersk and MSC signalled the start of “emergency capacity management action”.
The 2M will now completely withdraw its AE2/Swan North Europe and AE20/Dragon services until the end of June.
Maersk cited “market demand reductions in Europe caused by the Covid-19 pandemic” and warned that “further blank sailings of other services may be announced, subject to market conditions”.
The Ocean and THE alliances have also been proactively blanking sailings as the outlook deteriorates and, according to maritime consultancy Sea-Intelligence, the number of void sailings in the “past few days” has grown to 45.
“Quite a few from all the alliances are made with notice much shorter than usual,” said Sea-Intelligence chief executive Alan Murphy. “This is a clear indication that the drop off in booking levels is happening very quickly.
“The effect of the virus outbreak in China was the cancellation of more than 100 sailings and we should therefore expect the pandemic spread to have an even more substantial impact.”
And with the lead time to cancelled sailings much shorter than usual, Sea-Intelligence said shippers that wanted to maintain their bookings would need to be “agile in rearranging their supply chain” in the coming weeks as capacity dries up.
Indeed, The Loadstar understands that the alliances are preparing to announce “skeleton east-west services” from 1 April – ironically the same date the carriers were due to roll out new network offerings.
CMA CGM this morning advised customers of 11 new blanked sailings on the backhaul North Europe-Asia route between weeks 17 to 24, and four more blanked sailings on headhaul Asia-North Europe routes in April.
Meanwhile, there is talk in some quarters of two or more of the alliances combining capacity for the duration of the crisis.
Normally this type of cooperation would flout anti-trust legislation, but in these unprecedented times exceptional measures are being taken by regulators to temporarily relax competition laws.
The Loadstar reported last week on three of the largest US-flagged container shipping carriers making an application to the Federal Maritime Commission (FMC) for emergency permission to cooperate on trades between the US and the Caribbean.
Crowley Liner Services, Seaboard Marine and King Ocean want temporary anti-trust immunity on the trades that, they say, would allow them to match capacity with the expected decline in demand as a consequence of the Covid-19 restrictions.
And, transport lawyer HFW’s competition specialist team has flagged up the announcement on 23 March from the European Commission on how to apply competition rules during the crisis.
The European Competition Network (ECN), comprising the EC, the EFTA Surveillance Authority and the national competition authorities of the EU/EEA, said it understood “that this extraordinary situation may trigger the need for companies to cooperate to ensure the supply and fair distribution of scarce products to all consumers”.
“In the current circumstances, the ECN will not actively intervene against necessary and temporary measures put in place to avoid a shortage of supply,” it said.