Almost 150 sailings on the trans-Pacific and Asia-Europe routes were cancelled between October 2012 and February 2013, which has significantly affected freight rates and the regularity of service provided to shippers, according to Drewry’s new Container Insight Weekly.
The ocean carrier strategy has boosted average ship utilization and spot market freight rates in the two trade lanes by as much as 7 percentage points.
“Although the strategy achieves the same results as the withdrawal of services at the end of the peak season, namely stopping average vessel utilization from falling to keep freight rates up, the effect on shippers is completely different,” said Matthew Beddow, manager of Drewry’s Container Insight Weekly, in a written statement. “Shippers know where they stand with well managed service withdrawals, whereas sailing cancellations sometimes confront them with unexpected space shortages, rollovers and shut outs, as surrounding vessels quickly fill up.”
“Shippers … are not happy with sailing cancellations for obvious reasons. They want stability, and have been saddled with volatility,” Drewry said. “The damage caused has been less for big customers, as they have only been confronted with schedule gaps, not rate volatility.”
Beddows commented, “Uncertain cargo growth to Europe and the U.S. will encourage ocean carriers to continue with short-term vessel capacity planning, which means more sailing cancellations to come.”