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Pandemic effects force lines into continuous schedule adjustments

In terms of blanked sailings and capacity management, there are no signs of recovery going forward into the third quarter, according to a Braemar container trade and shipping analyst, as the peak season demand is likely to be subdued.

"A controlled and phased blanked sailing strategy will continue and when demand recovers, a phased and controlled re-introduction of tonnage is likely to happen. Liner companies will aim to maintain rates rather than increase them significantly," the Braemar analyst told Container News.

Liner companies are, therefore, committed to limit slots, as demand remains at very low levels. The members of THE Alliance, Hapag-Lloyd, Yang Ming, ONE and HMM, have updated their service adjustments in August to reflect the impact of the Covid-19 pandemic on the global shipping market.

The details of service updates are listed below:

Asia and North Europe

Maintain current 4 loops - FP1/FP2/FE2/FE3 weekly sailings with FE4 temporary suspension.

Asia and the Mediterranean

Week 32 – MD1 void

Week 34 – MD2 and MD3 void

Week 35 – MD1 void

Transpacific - West Coast

Week 33 – PS3, PN3 and PN4 void

Week 34 – PS5 void

Week 35 – PS3, PN3 and PN4 void

Transpacific - East Coast (via Panama and Suez Canals)

EC3 will remain merged with EC1 except for week 33.

Asia and Middle East

Week 32 – AG2 void

AG1 will remain merged with AG3.

Transatlantic

Week 32 – AL4 void

Week 33 – AL1 void

"We will continue to closely monitor the market situation and respond efficiently by restructuring our service scheme to meet market demand," said The Alliance.

Capacity management, which is the only tool for liner companies to use to ease the supply of slots when demand is struggling to fill ships, is crucial especially the current year, as the container trade demand projected to fall in the region of -10% for full-year 2020, according to the analyst.

"Cutting capacity is a fine art, liner companies have to service their existing customers to very high standards of reliability but at the same time avoid under-utilised ships," he added.

Moreover, due to market demand reductions in Far East Asia, Indian Subcontinent and Pakistan caused by coronavirus crisis, Maersk has also announced void sailings in July and August.

ServiceVesselVoyage (Westbound)First Port / ETDVoyage (Eastbound)First Port / ETD
PKX
CONTI COURAGE
200N
Qingdao / 14 July 2020
200O
Mundra / 4 August 2020
FI2
APL COLUMBUS
205T
Shanghai / 21 July 2020
205U
Jawaharlal Nehru / 11 August 2020

On the other hand, OOCL, the COSCO-owned carrier, has restored some void sailings on its Transpacific sailings announced in June.

Pacific China South 1 (PCS1)
Port rotation: Fuqing - Nansha - Yantian - Xiamen - Los Angeles - Fuqing
Void sailing from Fuqing on 28 July

Pacific North West 1 (PNW1)
Port rotation: Shekou - Hong Kong - Yantian - Kaohsiung - Vancouver - Seattle - Pusan- Kaohsiung - Shekou
Void sailing from Shekou on 25 July

The shipping specialist admitted that the inactive fleet has tapered off at the end of June, and some carriers have chartered additional 8,500TEU capacity for east-west trades, "signalling that the demand situation might not be as bad as we first thought."

In addition, the recent demolition of older bigger units, 7,500TEU and 9,600TEU, by some container shipping carriers, which prepare to cascade new bigger vessels into north-south trades, is expected to improve the supply situation.

However, the pandemic situation is still very uncertain in terms of spread, new resurgence and vaccine and medicine availability, and "we are not expecting a surge in the pent-up container demand until the uncertainty has dissipated," pointed out the container trade analyst.

Editor
Antonis Karamalegkos

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