According to the latest analysis from Sea-Intelligence, spot rates have consistently declined over several months.
The analytical firm believes that shipping companies can respond in one of two ways.
One option is to increase blank sailings, reduce supply, and stop the slide in spot pricing.
The other is that, despite the fall, spot prices are still significantly higher than before the Red Sea crisis and pre-pandemic levels, which may encourage shipping companies to book as much cargo as possible at current rates to profit from this.
The latter would dissuade the blanking of sailings but will lead to more rate erosion in the longer term.
READ: Blank sailings reach post-pandemic low
Blanked capacity has fallen sharply in recent weeks on the Asia-North Europe and Asia-North America East Coasts.
A similar trend is seen in Asia-Mediterranean. However, given the high level of volatility on this trading lane, Sea-Intelligence believes it is too early to tell if this is a new trend or merely a continuation of the regular volatility.
On the Asia-North America West Coast (shown in Figure 1), there has been a clear systematic pattern of decreasing blank sailings since 2022, which has persisted into 2024 and is currently approaching zero.
READ: Transpacific blank sailings increase
Alan Murphy, CEO of Sea-Intelligence, said: “Even if we take a four-week running average to smoothen out the volatility in all four trades, the underlying trend is the same i.e., a sharp drop in blank sailings in recent weeks. This suggests that the spot rate decline in itself is not the focal point, as present spot rates are significantly higher than pre-Red Sea crisis, as well as pre-pandemic.
“Keeping this in mind, and by looking at the blank sailings data, it seems that in the present market environment, shipping lines are attempting to capitalise as much as possible from the relatively higher rates, by not curbing capacity. The likely result however, will be a continued downwards pressure on spot rates.”
In August 2023, Sea-Intelligence reported that carriers resorted to blank sailings as the Chinese National Holiday known as Golden Week approaches.
