Ocean Carriers Cut Capacity In Response To Golden Week

22 Oct Ocean Carriers Cut Capacity In Response To Golden Week

Ocean carriers have accelerated their Golden Week blank sailings for October in an attempt stop the sliding spot market as an overall weakness in rates across major trade lanes threatens to drag prices to loss-making levels.

For the four-week period, which commenced at the end of September, global blank sailings have started to fall mostly in line with historical thresholds. With regards to capacity, Asia-North America West Coast will see reductions of 13.6%, Asia-North America East Coast 14.4%, Asia-North Europe 17% and the Asia-Mediterranean trade lane 16.7%.

The increase in cancelled sailings was expected following the significant rate decline experienced on the trans-Pacific in the past week which saw Asia-US West Coast rates fall 20% to $1,400 per FEU, while Asia-US East Coast rates decreased 9%, reaching $2,500 per FEU mid-September.

At Asia-North Europe, rates are reaching levels unseen since before the Red Sea disruption commenced approximately 21 months ago, falling 8% sequentially over the last week to $1,400 per FEU, while Asia-Mediterranean rates lost 6% week over week to $1,800 per FEU as at mid-September.

Falling demand and excess capacity have spot rates falling across all market indexes and it is anticipated that the freight rate environment will continue to weaken.

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