by Manal Barakat, SeaNewsEditor

Like every year, the container freight market prepares for the Chinese National Day holiday, commonly known as Golden Week, when closures are expected between 1 and 7 October 2024.

Carriers usually reduce capacity and announce blank sailings during this period as production in China slows down. However, This year, another challenge is presented by the ongoing vessel diversions around Africa.

Nevertheless, analysts from Sea Intel expect blank sailings this year will be lower than those of 2023.

Current capacity reductions

Analysts expect the scheduled blank sailings for the four-week Golden Week period in 2024 to be similar to the average reductions seen from 2017 to 2019 but fall short of the significant cuts made in 2023.

The long journeys vessels have been taking around the southern tip of the world require additional capacity.

Supply and demand dynamics

Sea Intel data show that there has not been a strong peak season, with many shippers front-loading cargo in the second quarter of this year. This shift suggests a sharper drop in demand during Golden Week, which would typically require a substantial reduction in supply.

However, the need for drastic capacity cuts may not be as pressing due to longer transit times, which could lead to fewer blank sailings or last-minute adjustments by carriers.

Estimated capacity reductions on key trade lanes

Compared to both last year and pre-pandemic averages, the Asia-North America West Coast, Asia-North America East Coast, and Asia-North Europe trade lanes are seeing a variety of capacity deployments and reductions in 2024, indicating a mix of increases and decreases.

Below is a summary based on Sea Intel's data:

• Asia-North America West Coast: Capacity deployment for this route is set to be the highest in 2024, with a planned reduction of 10.1% over the four-week period. This is significantly lower than the 26.8% reduction in 2023 but aligns with the pre-pandemic average.
• Asia-North America East Coast: Carriers plan to deploy 851,000 TEU, marking a 21% year-on-year increase. The capacity reduction here is 13.2%, less than half of last year’s cuts but consistent with the 2017-2019 average.
• Asia-North Europe: Offered capacity is expected to be 1.05 million TEU, with a reduction of 16.9% across the four weeks. This is lower than the 23.2% reduction in 2023 but higher than the pre-pandemic average.

In conclusion, the analysis shows that Golden Week 2024 will see a nuanced approach to capacity management in the container sea freight market.

While the overall reductions are less severe than last year, they are in line with pre-pandemic trends. The longer transit times and front-loaded shipments have influenced these adjustments, indicating carriers' more flexible and responsive strategy.