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Blanked sailings on the Asia-US West Coast trade four weeks before the Chinese New Year surpass by more than 6x blankings during the same period in 2019
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In-house analysts of Norwegian freight rate benchmarking and market analytics platform Xeneta say more blankings are scheduled for the CNY week itself
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Xeneta chief analyst Peter Sand sees the development as a “bad omen” for carriers of what they should expect in 2023
A pre-Chinese New Year rise in blanked sailings has been observed on the Asia-US West Coast route four weeks before Chinese New Year 2023, more than six times the blankings in the weeks before the holiday in 2019, an ominous sign for carriers this year, says Xeneta, a freight rate benchmarking and market analytics platform.
The blanked sailings were announced before January 6 by the major ocean liners plying the Asia-US West Coast and East Coast routes. They also cu capacity on the Asia-North Europe corridor as they adjusted to a demand drop due to high inflation, tight money, and a COVID-related manufacturing slowdown in China.
Xeneta chief analyst Peter Sand said that activity during the week of the holiday itself is set to decline, with blanked capacity on the Asia-US West Coast route standing at 57,970 TEUs, a steep increase from the 6,800 TEUs blanked in 2019.
“In a normal year, we tend to see very few blanked sailings in the run-up to this major Chinese holiday, as shippers stock up on their inventories. So, this is a worrying development for carriers, and, no doubt, a bad omen of what’s to come for the year ahead,” said Sand in a report.
Ocean carriers entered 2023 with 117 blanked sailings from Asia to the US West Coast, East Coast and North Europe, market watchers had reported early on.
Another Xeneta analyst, Emily Stausboll, said in the company’s weekly container freight update that there could be more blankings in the days ahead as China’s most important holiday, which starts on January 22, draws near.
Carriers have announced the blanking of 220,489 TEUs, up from 29,796 TEUs blanked in the four weeks leading up to CNY in 2019, and it is common to have a few blanked sailings before the holiday begins.
In the following weeks, carriers limit their offerings as Chinese manufacturing and subsequent exports decline as workers take their annual 10-day break.
“The high level of blank sailings before the holiday this year shows just how low demand is, with little to prop carriers’ hopes up for the rest of the year,” Stausboll said.
The blanked capacity in 2023, however, has been almost halved from levels in the weeks around the Chinese New Year in 2022, when carriers were forced to blank a huge share of scheduled capacities due to the delays on the trade. In some cases, delays lasted more than a week in roundtrips, making it impossible for ships to return in time for their next scheduled departure.
Xeneta said the blank sailings announced so far for the four weeks after CNY are 68,000 TEU lower than they were in 2019. But, with plenty of time left for carriers to act, this year’s total will most likely eclipse 2019’s number as pre-CNY blanked sailings rise.
Similarly, in the Far East to North Europe, blank sailings in the four weeks leading up to CNY are 715% greater than in 2019 at 226,000 TEUs currently, while those on the Far East-US East Coast trade have risen 340% to 140,000 TEUs, Xeneta said.
In 2019, there were no blank sailings in the four weeks leading up to CNY from the Far East to the Mediterranean, whereas this year, there are 59,600 TEUs, the data analytics provider said.
“This really does demonstrate the low level of demand gripping the industry at present,” said Sand.
