Based on the latest data provided by Drewry, a cancellation rate of 13% has been observed for the next five weeks (weeks 37-41). Out of the 748 scheduled sailings on major trans-Pacific, trans-Atlantic, Asia-North Europe, and Asia-Mediterranean routes, a total of 94 sailings have been canceled between week 37 (9.15-18) and week 41 (10.10-16). Looking at the breakdown of air sailings during this period, it is predicted that 64% will take place on the trans-Pacific eastbound trade routes, while 23% will occur on the Asia-North Europe and Mediterranean routes. The remaining 13% of sailings will be on the trans-Atlantic westbound routes. This data reveals the current scenario in the shipping industry and highlights the impact of cancellations on various trade routes.
Over the course of the next 5 weeks, specifically during weeks 37 to 41, a significant number of voyages have been cancelled by the three major global shipping alliances. In total, there have been 89 voyages cancelled, with each alliance contributing to these cancellations. Out of the three alliances, the 2M Alliance takes the lead with the highest number of cancellations, having called off 31 voyages. Following closely behind is THE Alliance, with 26.5 voyages cancelled. Lastly, the Ocean Alliance, while experiencing fewer cancellations compared to the other alliances, still had to cancel a substantial amount, reaching a total of 21.5 voyages. These cancellations have undoubtedly impacted the shipping industry and deserve attention in terms of their potential effects on global trade and logistics.
According to Delury, with today's market being so unpredictable, it is important for shippers and BCOs to anticipate any potential issues that may cause unexpected delays and disruptions. Failing to do so could result in serious ramifications for the global supply chain should any incidents occur. Therefore, it is essential to preemptively address any expectations that may lead to complications. In such a dynamic market, any escalation of events can have far-reaching consequences.
The Port of Felixstowe is currently facing the potential threat of a second general strike, while the Port of Liverpool is also brewing with a strike on the horizon. This situation is causing concern among carriers who have limited options for avoiding the Port of Felixstowe due to the high concentration of container yards and labor shortages in Northern Europe. As a result, there continues to be a tight supply of capacity in the shipping industry. This tightness is further exacerbated by numerous factors such as empty sailings, cargo vessel voyage deferrals, and port hopping. The congestion experienced in European ports, particularly in Hamburg and Rotterdam, is reaching critical levels, resulting in significant delays and extended durations for cargo ships returning to Asia.
Shenzhen and Dalian port cities have been hit by the epidemic, resulting in disruptions in certain areas. From September 2-4, warehouses and container yards in Shenzhen have halted inbound and outbound operations, leading to further delays in receiving and shipping. As a result, more disruptions are expected to occur in the coming days.
Furthermore, the port operations in Shanghai and Ningbo have been significantly impacted by Typhoon Xuan Lanuo on September 5 and the approaching Typhoon Meihua, which is expected to affect Jiangsu, Zhejiang, and Shanghai. As a result, there have been disruptions in shipping schedules and a disruption in the overall maritime activities in these areas.
Shippers and BCOs are anticipated to encounter increased operational disruptions as the shipping industry continues to experience a downward trend, which is expected to persist due to the softening of ocean spot rates.
During the Golden Week, shipping companies face challenges due to a significant reduction in classes. This reduction is a result of the natural decrease in demand caused by port congestion. Consequently, the recent European line ship class is operating at full capacity. However, shipping companies clarify that the reduction in classes is primarily influenced by the congestion at ports.
During the last quarter of every year, shipping companies have implemented measures to reduce off-season staff shifts, arranged for ship maintenance during this period, or reduced the dispatch of ships to prevent a significant decline in freight prices. This year, these measures were implemented a month earlier than usual, and with the added issue of port problems, it may result in a slower rate of decline in freight prices. It is a common practice for the industry to take such steps during this time as it allows them to save costs and prepare for the peak season. However, the consequences of such actions must also be considered as it could lead to a reduction in available shipping capacity.
According to several freight forwarders, the U.S. West line has experienced a decline in price levels since August, dropping below 6,000 U.S. dollars. The current spot market rates are mostly between 3300-3500 U.S. dollars. On the other hand, the U.S. East is facing severe port congestion, resulting in much higher price levels. The initial period after the November holiday is expected to remain stable due to a reduction in ships. However, the price may fluctuate depending on the extent of the reduce in shifts and the number of new orders received. If the increase in new orders is limited, it will be difficult for the U.S. West to maintain a price of 3,000 U.S. dollars. Additionally, the union of the U.S. West terminal workers has voted to strike, adding to the unpredictability of the market's development.