Number of blanked sailings increased rapidly after China's Golden Week holiday

Photo: Port Technology

Vespucci Maritime's Lars Jensen wrote in the latest Baltic Exchange commentary that the number of sailings blanked after Golden Week is higher than usual, due to the container shipping market reaching a crossroads and demand is way below the record newbuilding deliveries.

Many sailings are expected to be blanked until at least October 22.

Many new ships are sometimes left idle in the yard instead of being put into use immediately.

Recent data from Sea-Intelligence shows that 4% of global capacity remains unavailable due to continued vessel delays – almost double the normal level before the pandemic.

“The key to watch is whether the aggressive blank sailings programme results in a halt to rate declines during September and potentially begins to reverse the trend despite coming out of the peak season,” Jensen wrote.

“It is clear the demand does not support the carriers’ deployment of capacity in their current networks. It is also clear that the continuing delivery of more new vessels will only make this worse. Unless the carriers change behaviour, we could be facing a much more severe downturn in rates in the coming months.”

Jensen added that routes with spot rates at least 30% higher than before the pandemic are now in worse shape than in 2019.

Citing recent financial figures from Hapag-Lloyd, Jensen pointed out that the leading German carrier's operating costs per TEU in the second quarter of 2023 were 29% higher than before the pandemic.

“In broad strokes, the Asia-North Europe trade is affected the worst and is in essence, at the same level as seen in the peak season of 2019 before the pandemic. This is problematic as general cost inflation has risen significantly in recent years and furthermore the carriers have had to implement the IMO2020 rules, which means shifting to the much more expensive low-sulphur fuel.”

Transpacific rates are still slightly higher than before the pandemic but cannot be said to be strong. However, the transatlantic segment fared much worse, with trade on the route growing more than 10% during the Covid-19 years, compared with around 5% in 2019. But since then shipping volumes have has declined sharply.

Source: Phaata.com (According to Martina Li, ContainerNews)

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