Shipping lines are stepping up efforts to maintain rates in an oversupplied market, announcing 53 additional blank sailings between now and mid-October, according to a report from Diversified Merchandise Corporation (Dimerco). This move follows Drewry's weekly analysis, which on September 13, noted that 90 blank sailings were scheduled out of 692 planned trips, marking a 13% cancellation rate.
Most of these blank sailings, or canceled trips, are concentrated on key trade routes, with 67% of the cancellations on the Transpacific Eastbound (TPEB) lane, 21% affecting the Asia-Europe/Med routes, and 12% impacting Transatlantic routes. Among the major shipping alliances, Ocean Alliance leads with 24 canceled sailings, followed by THE Alliance and 2M Alliance, each canceling 16 sailings. Non-alliance carriers added 34 blank sailings to the mix.
Despite these adjustments, challenges persist for global shipping. These include the increasing number of blank sailings, the ongoing crisis in the Red Sea region, and the potential for strikes at US East Coast (USEC) and Gulf Coast ports. Meanwhile, freight rates, particularly on Europe-bound and TPEB routes, continue to decline. USEC has seen the sharpest rate drops, ranging from 15% to 27% by August.
US Imports and Retail Resilience
Despite global uncertainties, US retail sales have shown resilience, with a 0.45% month-on-month increase in August, according to the National Retail Federation (NRF). Consumer spending on household essentials has remained strong, even in the face of a slowing labor market. In response to this, the NRF has raised its forecast for import cargo, bolstering expectations for growth in the coming months.
Alvin Fuh, Vice President of Ocean Freight at Dimerco Express Group, pointed out that concerns about possible labor strikes at East and Gulf Coast ports, coupled with tariff uncertainties tied to the upcoming US Presidential election, have driven many cargo owners to expedite shipments. This urgency resulted in a 2.1% increase in US port handling volumes in August, reaching 2.37 million TEUs (twenty-foot equivalent units).
Seasonal Outlook and Future Trends
Fuh also warned that this early surge could signal an earlier-than-usual start to the slow shipping season. As a result, port handling volumes are expected to decrease in the coming months, with projections showing a gradual decline from September through December. By year-end, handling volumes could drop to as low as 1.89 million TEUs. If the current forecasts hold, total port volume for 2024 could reach 24.98 million TEUs—representing a 12% increase from 2023.
On the Asia to USEC and European lanes, capacity availability is improving, with current supply able to meet demand. However, rates are still falling. In contrast, the backhaul routes show rising rates on shipments from the US to Asia due to tight capacity, while Europe to Asia routes are experiencing more flexibility and lower rates.
Resources:
Comments