News / Ocean carriers 'fire blanks' ahead of China’s Golden Week holiday

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Fearing another container spot rate crash, ocean carriers have blanked a number of export sailings from Asia to Europe and Asia to the US, prior to the Chinese national holiday in early October.

A carrier contact told The Loadstar this week he expected to see “many more” void sailings this year in the key soft-demand weeks of the slack season.

 “We are determined not to get sucked into another rates war this year, and as long as the Red Sea diversions continue we think we will be ok,” said the contact.

Drewry’s latest blanked sailings assessment puts the notified cancellation rate in September for scheduled sailings on the transpacific, Asia-Europe and the transatlantic at 10% to date.

“Over the next five weeks, THE Alliance have announced 17 cancellations, followed by the Ocean and 2M alliances with 12 and 10 respectively,” said the consultant.

Drewry said 51% of the blanked sailings notified to date were on the transpacific, 28% on Asia-Europe and 21% on the transatlantic.

In shipper advisories, Maersk said it was “looking to balance the network in light of forecast reductions in demand”, while its 2M alliance partner, MSC, said it would adjust capacity in weeks 39 and 40, “due to an anticipated slowdown in demand”.

While spot rates from Asia to Europe and on the transpacific eastbound route have been declining steadily for several weeks, there is no evidence so far of heavy discounting by the major carriers that would cause freight rates to collapse.

Indeed, Drewry’s WCI Asia-North Europe component is still around 350% higher than 12 months ago, at $7,204 per 40ft, having declined 3% this week.

Nevertheless, The Loadstar sighted a short-term rate offer this week from Ningbo to Felixstowe of $5,000 per 40ft, valid for September, with another UK-based NVOCC advising that he had received an offer of $4,500 per 40ft from China to Southampton.

“We think there might be some further reductions to come as the alliances restructure,” he added.

Meanwhile, transpacific rates are also holding up well, with the WCI’s headhaul spot rate to the US west coast edging down by just 2% on the week, to $6,248 per 40ft, with US east coast rates down by the same percentage, tot $8,591 per 40ft.

Spot rates on the tradelane remain elevated however, up year-on-year by 180% and 150% respectively, for Asia to the US west and east coasts.

Notwithstanding carriers deploying their capacity management tools on the transpacific, the looming threat of a US east coast dock strike in October, as well as the roll-out of new import tariffs, should underpin rates on the trade, despite softer demand and the undercutting of rates by new, small entrants to the market.

Elsewhere, on the transatlantic westbound North Europe to US east coast route spot rates remained stable, at around $2,000 per 40ft, with exporters starting to run out of time to ship their goods ahead of potential industrial action at the east coast ports.