In a bid to keep rates in check as overcapacity continues unabated, shipping lines will blank-sail 53 scheduled sailings in addition to current levels of cancellations until mid-October, according to a report by Diversified Merchandise Corporation (Dimerco).
This follows shipping platform Drewry’s weekly analysis on September 13, which indicated that 90 blank sailings had been announced out of 692 scheduled, representing a 13% cancellation rate.
It was noted that 67% of these cancellations were on the Transpacific Eastbound (TPEB) route, followed by 21% on the Asia-Europe/Med routes, and 12% on the Transatlantic route. In terms of the alliances, it was reported that Ocean Alliance would cancel 24 sailings, THE Alliance 16, 2M Alliance 16, and non-alliance carriers 34 sailings.
Despite challenges such as the increasing number of blank sailings, the ongoing Red Sea crisis, and the potential for strikes at US East Coast (USEC) and Gulf Coast ports, ocean freight rates on Europe westbound and TPEB routes were said to be continuing to fall. The steepest declines, particularly on the USEC, were reported to range between 15% and 27% up to August.
Regarding US imports, retail sales in the country were noted to have grown again in August, with the National Retail Federation also raising its forecast for import cargo. It was mentioned that consumer spending on household essentials remained strong, despite a slowing labour market. A 0.45% month-on-month increase in total retail sales was reportedly driven by optimism surrounding the Federal Reserve’s interest rate cut.
Alvin Fuh, ocean freight vice president at Dimerco Express Group, said concerns about a possible strike at East and Gulf Coast ports, along with fears of rising tariffs following the upcoming Presidential election, had prompted many cargo owners to accelerate shipments. This had led to a 2.1% increase in port handling volume, reaching 2.37 million TEUs in August.
Fuh added that the early peak season could signal an earlier-than-usual start to the slow season, with handling volumes projected to decline from September to December to 2.31 million, 2.08 million, 1.92 million, and 1.89 million TEUs, respectively. If these forecasts were to hold, total port volume for 2024 could reach 24.98 million TEUs, a 12% increase from 2023.
The report on the lane situation between Asia and the USEC and European base ports indicated that while space availability was improving and demand was being met by current supply, rates were continuing to fall. On the backhaul, it was observed that space from the US to Asia was tight, with rising rates, whereas space from Europe to Asia was more flexible with falling rates.
