An increase in sailing cancellations is on the horizon, as the P3 Network alliance has yet to indicate its intentions in detail and competitors will want to avoid capacity reduction measures in the interim, according to the latest Container Insight analysis by Drewry Maritime Research.
The members of the P3 Network — Maersk Line, Mediterranean Shipping Co. and CMA CGM — have so far only outlined the number of east-west services they intend to provide from the second quarter of 2014, and they do not expect to confirm port rotations and how services shared with other lines will operate until the fourth quarter of 2013.
Thus, uncertainty over the P3 alliance’s intentions, coupled with indecision over future trade growth, will result in another round of “serious” sailing cancellations in the 2013 winter season, the report said. It also said that competitors will prefer service cancellations, versus service withdrawals, in an effort to preserve market share.
For example, in the trans-Pacific trade lane from Asia to the west coast of North America, 12 sailings are being omitted in September and another 12 cancellations are scheduled for October, although most of the latter stem from China’s national holiday week from Oct. 1 to Oct. 7. The result is that vessel capacity will be reduced by approximately 2.8 percent in September, and by at least the same amount in October, which will help to get average vessel utilization back up to around 90 percent, thereby putting ocean carriers in a better freight rate negotiating position, according to the report.
“The trend means that shippers need to pay more attention to forward planning over the next six months, rather than assume that a contracted carrier will usually have a vessel offering the right port pairs on the right berth at the right time,” Drewry warned.