Attention! Shutdown! Global shipping cuts 15% after Chinese New Year

After the Lunar New Year, there will be a traditional low season for shipping, and it is normal for freight rates to fall. However, due to the lack of ship supply caused by the Red Sea crisis, the decline in freight rates was smaller than in previous years. Nonetheless, ships are still tight, and major shipping lines are still retaining capacity during the off-season to cope with the lack of ships in the market. The global shipping's strategy of reducing sailings continued, with statistics showing that 99 out of 650 scheduled sailings were canceled in the five-week period from Feb. 26 to March 3, a cancellation rate of 15 percent.

Yang Ming Shipping pointed out that the problematic schedule disruptions caused by frequent attacks on merchant ships in the Red Sea may force the supply chain to make adjustments, which will lead to terminal congestion and schedule delays. This will cause continued disruption to changes in supply and demand in the maritime transportation market this year.

According to statistics from international maritime transportation specialist agency Deloitte, voyage cancellations have occurred on all major global routes, including trans-Pacific, trans-Atlantic, and Asia-to-North Europe and Mediterranean routes. Between weeks 5 and 9, 99 sailings out of 650 scheduled sailings were canceled, a cancellation rate of 15%.

During this period, 56 percent of the blank sailings will occur on eastbound trans-Pacific routes, 34 percent on Asia-North Europe and Mediterranean routes, and 10 percent on westbound trans-Atlantic routes.

Over the next five weeks, the Ocean Alliance announced the cancellation of 33 sailings, followed by the THE and 2M alliances with 22 sailings each. Meanwhile, non-alliance services implemented 22 blank sailings.

Statistically, it is expected that 85% of ships will sail as scheduled over the next five weeks. However, the Red Sea crisis remains the biggest challenge to global flight mobilization. The issue of ships' empty schedules can also evolve rapidly in response to market changes.

Prior to the Lunar New Year, shipping lines took a number of adjustments, including shorter voyages and faster sailing speeds, to mitigate the disruption caused by the Red Sea diversions. With demand gradually easing after the Lunar New Year and new vessels coming on stream to add extra capacity, the disruption and rising costs of shipping may have peaked.

However, the shortage of empty containers in Asian export centers poses a new challenge, prompting carriers to potentially add vessels to alleviate the shortage.

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