As the extended Chinese New Year and Coronavirus outbreak continue to linger, major shipping alliance have slashed sailings due to shortage of cargoes following the closure of factories in China.
According to Sea-Intelligence report, the rapid mass-cancellation of sailings is very likely to cause capacity shortages for back-haul shippers three-six weeks’ time, depending on where shippers are based.
“Back-haul shippers should therefore prepare not only contingency plans for potential capacity issues, but also for significant price spikes. In terms of operations, we should expect larger than normal delays in the sailing schedules, an effect which will be felt for several months as the delayed vessels work their way around their planned loops,” said Sea-Intelligence report.
The report further stated that capacity issues could spread to other ports and countries, particularly in Viet Nam, where manufacturing plants have picked up some of the slack, which could lead to ‘capacity issues in secondary ports as well as an impact on feeder carrier rotations.’
Coronavirus blank sailings on the transpacific trade have reached 25, with carriers on the Asia-North America West Coast trade lane announcing 23 blank sailings, the report noted.
“In total, roughly 231,100TEUs, 210,800TEUs on Asia-North America West Coast and 20,300TEUs on Asia-North America East Coast, or 6 percent of the total capacity, are slated to be taken out of the Pacific trades in the analysed eight week period, according to data analysis from Sea-Intelligence.
It also said that the Asia-Europe trade will see a similar pattern with 22 blank sailings, with 16 on Asia-North Europe and six on Asia-Mediterranean. “In TEU terms, this translates into a total capacity withdrawal of roughly 364,800TEUs, 276,900TEUs on Asia-North Europe and 88,000TEUs on the Asia-Mediterranean route, or 10 percent of the total capacity on the trade.”
“Even then, they are slated to blank a lower amount compared to 2M and Ocean Alliance on that trade lane,” said Sea-Intelligence.
For instance, 2M Alliance has announced blank sailings equaling roughly 269,200TEUs, which translates into 12 percent of their total capacity. Ocean Alliance is slated to blank 272,300TEUs or 10 percent of its total capacity. The Alliance will only blank 2 percent of its total capacity, which equates to 41,200TEUs, all to be blanked on Asia-North America West Coast route.”
Sea-Intelligence reported that exports from China had been slashed by up to 350,000TEUs per week, costing the industry around US$350 million every week.
