Carriers remain cautious as they start blanking sailings again for Golden Week holiday in China
Source
American Shipper
Post Date
09/08/2020
Both the members of THE Alliance and the 2M Vessel Sharing Agreement have formally announced a new series of blanked sailings between Asia and Europe in October as cargo demand is expected to slow down during and after the Golden Week holiday in China (first week of October).
This shows that the carriers will continue their cautious approach to avoid overcapacity and that they have mastered the art of fine tuning their capacity to match it with market demand. Carriers have been blamed recently of artificially reducing capacity to push up rates, but the past weeks have proven that this is not the case. Capacity has been increased since May by reinstating blanked sailings, resuming susped services, launching new services and organizing extra ad hoc sailings on the two big East West trades. Average weekly nominal capacity in the trade between Asia and North America is expected to exceed 500,000 teu this month for the first time as MSC has announced the start of another Far East-West Coast of North America service, branded as ¡®Santana¡¯.
Current Transpacific capacity is 26% higher compared to May and even 6.7% more compared to 1 September 2019. Average weekly nominal capacity between Asia and Europe has risen from a low of 340,000 teu in May to 400,000 teu (+17.6) which is only 4% under last year¡¯s figure. The steady capacity increase has not prevented a further rise in rates for Chinese exports.
Most big carriers are profi despite the COVID-19 pandemic as this is the first major crisis which they did not tackle by chasing more market share and fighting a rate war. The disastrous effects of previous rate wars and the operational mess following the collapse of the Korean carrier Hanjin Shipping in 2016 have not been forgotten. The good results of the carriers are of course not only the result of disciplined capacity management which is new to the liner industry, but also largely influenced by the fact that bunker prices have ped considerably. September is expected to be a very strong month for the carriers with a peak in cargo demand as Chinese exporters will be shipping out more cargo ahead of the Golden Week holiday. Maersk and MSC will react to this by introducing megamax ships such as the 19,437 teu MSC ERICA and the 18,340 teu sisters MARCHEN MAERSK and MARIBO MAERSK in the seasonal Asia-Europe ¡®AE-55 / Griffin¡¯ service, which was to date serviced with 14,000 teu tonnage. The first three sailings of the ¡®AE-55 / Griffin¡¯ service in October will be skipped as part of the 2M blanking scheme for the Golden Week. Maersk and MSC will also cancel the 3 October sailing of the 20,568 teu MURCIA MAERSK for the Far East-North Europe ¡®AE-5 / Albatross¡¯ service. MSC has re-confirmed this week that both the Far East-N Eur ¡®AE-2 / Swan¡¯ and Asia-Med ¡®AE-20 / Dragon¡¯ services remain susped until further notice. THE Alliance will not offer extra Asia-North Europe sailings under the ¡®FE4¡¯ label in October. Apart from these five blanked ¡®FE4¡¯-sailings, one sailing each of the ¡®FE2¡¯ and ¡®FE3¡¯ loops will be omitted. None of the three Asia-Med loops will offer a departure from China in week 41 and export cargo will have to wait for the sailings in week 42. The OCEAN Alliance has not formally announced a blanking scheme yet but latest schedules show already three skipped sailings in AsiaNorth Europe loops whereas a fourth sailing will be cancelled as the Evergreen operated ¡®CES¡¯ service (aka ¡®NEU7¡¯) will only offer two departures in three weeks with
