Asia: Blanked Sailings Support Rate Increase

Carriers have continued their programme of blanking sailings on the Asia-Europe trade to offset low demand, with more announcements in the past week.

The strategy of managing capacity to put pressure on demand appears to be the significant factor in why they were able to implement a rate increase this month.

Prior to this stringent focus on cancelling voyages, carriers had tried and failed to raise rock bottom ocean freight rate levels on a number of times previously this year.

Market conditions had recently suggested there was a  bleak outlook for carriers, which is clearly shown in many of their Q2 profit/loss reports. Several global tradelanes had reportedly been operating unsustainably at rates that had been below cost.

Therefore, considering the recent rise in rates, we can expect that strict capacity management will continue, meaning blanked sailings are probably here until demand returns. There are already suggestions that another GRI may be incoming in the next month.

Atlantic Pacific are monitoring developments closely.