After climbing in the beginning of the year, blank sailings may have plateaued, according to data from SeaIntelligence. Canceled sailings are beginning to ebb, although not enough for a definitive turnaround. Still, we’ll take all the positive news we can get.
Roughly 20% of shipments between Asia and the United States were canceled in May and June. Data thus far suggests that cancellations in July (blank sailings) could drop as low as 10%. If ocean carriers are booking more (or at least not seeing the same declines in booking), this could be a positive for the whole transportation industry. More imports means more volumes to haul, and also suggests that retailers anticipate an eventual increase in demand.
Earlier this month, Maersk announced its prediction that container volumes would decline by 25% in the second quarter of this year. The shipping giant canceled 90 sailings during the first quarter, and expected to cancel an additional 140 in Q2.
Canceled trips have helped ocean carriers prop up rates for the time being. Rates from East Asia to the west coast of the United States gained roughly 25% year over year this spring. This is only a band aid solution, however. The cost of a blank sailing can reach nearly 40% of the cost of a trip, without generating any income.
While fewer blank sailings are a good sign, this does not suggest a full recovery. SeaIntelligence founder Lars Jensen does not predict that shipping will recover until at least 2021. ‘Rebound in 2020 will depend on three factors,’ Jensen explained on a webinar. ‘Firstly, the virus needs to be gone; secondly, if the virus is gone consumers will need to start spending as they did before, and given how many people have lost their jobs this is extremely unlikely; and thirdly, we are shortly entering the peak season, which is when retailers stock up for Christmas – but is any retailer seriously predicting strong Christmas sales this year?’