Demand for space on vessels from China continues its seasonal decline, apprarently prompting carriers to consider cancelling further voyages without notice.
To match capacity with slowing demand, we have already seen a comprehensive round of blank sailings covering the Golden Week holiday period, with suggestions the move was unnecessarily slow, as the two largest alliances apparently waited for the other to make a move.
Lines defend blank sailings by insisting that they provide options for alternative coverage to minimise impact and blanking sailings for a full period, rather than on an ad hoc basis, is easier to plan around.
Regarding the sometimes contradictory nature of cancellation announcements, Maersk have said that vessel sharing agreements were purely operational in nature, with no commercial coordination among alliance members. This meant each alliance member was responsible for its communication with respective customers and the content of their advisories.
The Loadstar has reported a source, on the side lines of London International Shipping Week this week, that there were “plans afoot” for immediate capacity reductions.
“Some shippers have been complaining that they are only getting four weeks’ notice of blankings, but it is possible that we will have to consider pulling a voyage without any notice if things don’t improve very quickly,” he said.
Much will depend, however, on how the market adjusts to the 2M’s AE2/Swan service suspension at the end of this month, the Ocean Alliance’s five headhaul blankings, THE Alliance’s three void sailings and an additional cancelled AE7/Condor loop by the 2M in week 40.
Meanwhile, a similar pattern emerged this week on the transpacific, where the supply-demand fundamentals have been thrown out of kilter by tariff uncertainties.
Amid their fight to shore up freight rates, lines are beginning to roll out IMO 2020 fuel surcharges to recover the extra costs involved in complying with the new regulations. Ships that will use the low-sulphur fuel for compliance will have to start replenishing their tanks with the new fuel in the final quarter of the year.
Maersk this week advised it would be introducing an EFF (environmental fuel fee) on all trades from December 1, applicable to all spot and short-term contracts of less than three months.
Maersk is due to reveal the EFF amount at the end of next month, and advised that the surcharges would be calculated as the price difference between high and low-sulphur fuel “multiplied by a trade factor”.