September 19, 2018
Expect Ocean Space to Remain Tight as Carriers Cancel Sailings
Blog post authored by: Senior Ocean Procurement Manager – Transpacific, Kyle Beaulieu & Ocean Procurement Associate, Eleanor Powell
As we head into a traditional off-peak season, between Golden Week and Chinese New Year, carriers are announcing blank sailings that will impact services for shippers, especially on the high volume Trans-Pacific Eastbound (TPEB) and Far East Westbound (FEWB) lanes. Blank sailings are a popular measure for reducing supply in short-term (which generally results in stronger rates) and, often, having much-needed maintenance done on a vessel.
A blank sailing is when a carrier cancels a particular sailing for a vessel. Vessels call a specific set of ports in a “string” on a regular basis. For example, a string may have 6 vessels that rotate through calling Shanghai every Monday and then heading on to Ningbo and Los Angeles before returning back to Shanghai. These vessels run regularly in this loop to ensure consistency in transit time and supply on trade lanes.
When carriers announce blank sailings, this means that a vessel on that string will be pulled out of the loop for a week, resulting in a skipped week of service. Carriers can either plan to roll all cargo to the next vessel for that string or load containers onto other strings servicing the same ports during the week of the blank sailing. Either way, in the short-term, global supply has been reduced on that route.
Looking ahead, carriers have announced 19+ blank sailings on TPEB and 15+ on FEWB from October – December 2018. The majority of blank sailings fall around Golden Week factory and business closures in the first two weeks of October, but the impact of these blank sailings will extend beyond this timeframe. These blank sailings could impact supply through the end of the year and shippers should expect there to be capacity restraints.
Here’s how blank sailings may impact shipments from now through the end of the year:
- Blank sailings will lead to tighter space on vessels. There will be higher demand for the remaining operating services, which could result in overbooking of active vessels. Overbookings can lead to rolled containers.
- As carriers adjust sailing schedules and cargo loading plans around blank sailings, shippers can expect there to be congestion at the ports.
- As carriers revise schedules and filter-in/out vessels, space release may be slower than usual as projecting the amount of space available on an upcoming vessel could be delayed (as a 12,000 TEU vessel could be coming online in lieu of a 15,000 TEU vessel).
- Blank sailings could cause there to be more uncertainty and volatility in the market
To mitigate issues and help with planning, shippers should:
- Book three weeks before cargo ready date (CRD) to avoid space congestion with last minute bookings.
- Be flexible on routing. There might be blank sailings impacting your usual routing through LA to Columbus, consider routing via Canada or the USEC for a few weeks.
- Work with your supplier to make sure they’re also prepared for fewer sailings–shifting CRDs could result in more delays than normal as there could be fewer overall options available.
List of Upcoming Announced Blank Sailings
“Week of Blank Sailing” listed in the below charts depends on POL.
Looking for more information on how blank sailings might impact your supply chain? Get in touch with our team.