Navigating Shipping: Blanked Sailings & Rising Costs

As blanked sailings become the norm in the Asia-Europe trade, shipping lines are adapting to new business realities. In June and July, 10.8% of all regular sailings out of the 25 Central China — Europe loops offered by the three big alliances were voided. Initially a response to low cargo demand during the COVID-19 pandemic, blanked sailings have persisted despite an influx of new tonnage and available ships. THE Alliance had the largest percentage of skipped sailings during this period, even as MSC faces difficulties filling its new standalone Asia – Baltic ‘Swan’ service.  

Meanwhile, U.S. importers are navigating sharply rising shipping costs this summer. From China to the U.S. West Coast, the average spot rate for a 40-foot container surged 61% in six weeks through Aug. 15, reaching $2,075, according to Xeneta. Despite recent increases, these rates are still 66% lower than last August, suggesting that U.S. importers are absorbing the costs, at least for now. Shipping companies are also increasing their fleets; 1.2 million containers of capacity were added in the first seven months of 2023, setting a new record.

Highlights:

• 10.8% of Central China-Europe sailings blanked by major alliances.
• Spot rate surge of 61%, to $2,075 per 40-foot container, China to U.S. West Coast.
• Despite increases, current rates are 66% lower than last August.
• New containership deliveries added 1.2 million containers of capacity in 2023.

Amid these trends, carriers are trying to extract more money from long-term contracts via peak-season surcharges, although some shippers, such as Travelpro Products, are pushing back. Industry experts anticipate the excess capacity will lead to a downward trend in spot rates come fall.

Sources: FreightGlass | WSJ