Canceled sailings increased by more than 400% in a week

Over the next few weeks, container shipping lines will know which losses they will suffer this year, with the large-scale capacity cuts meaning freight rates will need to be sustained if firms want to successfully manage their losses during the Covid-19 crisis.

The latest Sea-Intelligence report said an increase in the number of canceled sailings to 212 from 45 from the previous week, with the duration of canceled services extending to the end of June, possibly. causing huge financial losses if prices fall as low as 2009, according to the latest report by Sea-Intelligence.

The Asia-Europe routes have seen the largest capacity draw with nearly a third of the scheduled sailings, with about 29-34% of the sailings canceled, the report said.

"The financial impact on carriers can also be huge, although to a great extent depends on the pricing of freight carriers." In the worst case, carriers could suffer $ 23 billion in losses this year compared to 2019.

“So it is clear that the main purpose of reducing capacity is seen as an attempt to prevent a sharp decline in prices. Cost savings are also important, as they are also in the billions of dollars, but nothing compared to the impact of the rate reduction if any, ”Sea-Intelligence said.

For this reason, the next few weeks could be the time for carriers to decide, with the development of freight rates, especially in the two main routes that are important for carriers Pacific and Asia-Asia. In Europe, it will decide whether carriers will continue to cut capacity further.

In the situation, if the freight rate were not reduced but only decreased by 10% in volume, firms' profits would have decreased at a smaller rate, but it was still very large, 6 billion USD compared to last year.

According to the latest statistics of Freightos FBX, the freight rate has increased by 2% compared to the global average rate over the past week. On the Pacific, shipping to the US West Coast remained at 1,589 USD / FEU, up 2% from a week ago. While the Asia-Europe routes showed prices at US $ 1,402 / FEU, it was down 3% from a week ago.

Phaata (Source Container-News)

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