Data from the Journal of Commerce (JOC) reveal that carriers plan to blank 38 sailings travelling on the Transpacific to the US West Coast. According to the journal, the blank sailings represent over 236,000 TEU – 20% of the capacity allocated for August. A similar number of sailings were blanked in July, nearing 23% of the month’s capacity.
Analysts attribute this activity to the relatively weaker spending in the US market on major purchases, i.e., products that require significant financial commitment. Based on data from the US Census Bureau, spending on furniture, home appliances and electronics witnessed a drop in July compared to June. JOC adds that June’s inventory-to-sales ratios for retailers, manufacturers and wholesalers have now returned to the pre-pandemic levels.
As a result, some container shipping lines, such as MSC, ZIM and THE Alliance, decided to suspend services on the Pacific. MSC has announced modifications to its port rotation and vessel assignments for both its Asia to the US and the Far East to North Europe services. Similarly, THE Alliance has temporarily suspended its PS5 service, redirecting cargo to its PS3, PS6, and PS7 rotations.
In the meantime, blank sailings on the Asia-North Europe route have not been as high compared to the Transpacific. Information from carriers shows that on the Asia-North Europe trade, 2.7% of available capacity will be blanked in September and 6.2% in October, says JOC.
Shipping experts, however, anticipate the blank sailings on the route to either increase or mirror those of previous months. Speaking to CNBC, Simon Heaney, a senior manager for container research at maritime consultancy Drewry, said, “The container market is in the middle of a demand slump, so blank sailings are once again being used as a [band] aid to try and balance the market.”
With holidays such as Thanksgiving, the Golden Week in China and Diwali fast approaching, carriers remain on the lookout for the market situation. While demand has changed significantly compared to the pandemic years, retailers remain aware that the closure of manufacturing centres during the Golden Week in China could disrupt the global supply chain and capacity fluctuations.
