Blank sailings by Cosco Container Lines, Yang Ming and Hanjin Shipping are expected to cover the period from late July to mid-August - normally viewed as one of the busiest times of the year with Christmas traffic flows coming on stream.
The capacity cutbacks coincide with renewed efforts by some carriers to bump up freight tarfifs again through General Rate Increases (GRI) and Peak Season Surcharges (PSS).
Lars Jensen, CEO and partner at SeaIntel Maritime Analysis, told Lloyds Loaidng List.com that he was unsurprised by the blank sailings move.
"Over a period of several months, we’ve been witnessing a tug-of-war between the carriers’ new-found discipline and desire to become profitable on one side and the downward pull of a poor supply/demand situation on the other. We predicted that eventually carriers would need to address the supply/demand issue if demand to Europe did not improve, either through pulling strings or - more likely - by cancelling individual sailings, as they are now doing."
He said this reflected carriers’ resolve "to remain focused on becoming profitable in 2012 rather than reverting to last year’s fight over volume."
Clarkson Securities’ Container Freight Derivatives analyst, David Barnes said dropping some sailings between Asia and Europe was a sensible direction for carriers to take.
"It’s long been our view that demand is weak and capacity excessive. With the goodwill (on the part of shippers) running low to keep on paying further GRI, an initiative to reduce capacity in the market will support freight rates in remaining high by altering the fundamentals. However, more carriers need to embrace it if there’s to be a long-term or meaningful effect."
Shipping consultants Drewry’s Research Manager, Freight Rate Benchmarking, Martin Dixon, highlighted that the timing of the skipped sailings are intended to enable some success at lifting rates through August’s GRI/PSS.
"This is a sign of very weak headhaul demand and carriers’ resolve to manage capacity accordingly to maintain rate stability. We still expect to see some rate erosion through the course of the year despite continued carrier attempts to lift pricing but the degree of decline may not be as great as market fundamentals would suggest. Carrier behaviour in the market is of increasing significance," he said.