As we reach peak season, Whale is beginning to receive more blank sailings and more is forecasted over the last quarter of 2019, further driving rates for the holiday season.
In July, 2019 the shipping lines introduced a blank sailing program that meant 11 services over the last three weeks of July did not sail, this reduced the total availability shipping capacity from China in July by approximately 30-40%.
This was a deliberate move from the shipping lines to reduce supply so their planned Rate Increases for July and August had success.
On the back of the successful blank sailing program in July the shipping lines have announced the new blank sailing program that will see eight services removed between September and October, details of the services are as follows;
- ETD 25th August NEAX Service
- ETD 6th October NEAX Service
- 28th August NEAX Service
- 30th August A3C Service
- 9th October NEA Service
- 11th October A3C Service
- 29th August NEAX Service
- 1st September A3C Service
- 10th October NEAX Service
- 13th October A3C Service
This a strategic move by the shipping lines as the blank sailings are built around reducing capacity into the lead up to China National Week (1st – 7th October) as well as the week after Golden Week when volumes are at their highest in attempt to create a cascade effect into Christmas.
In other areas of the world, container shipping lines are expected to blank more Asia-Europe sailings in the coming quarter as they seek to stave off further freight rate declines after a weak peak season. European demand has been clouded this year by bearish economic growth and trade uncertainty, not least with Britain's exit from the European Union looming.
However, although economic performance has been dampened in Europe, Drewry is still predicting Asia-North Europe westbound volumes will grow 4.3% in 2019, compared to just 1.2% over 2018, while European container port throughput is expected to increase 2.6% year-on-year.
The key factor on the Asia-Europe lanes this year has been excess capacity, not least because it is the recipient for most of the mega-carriers delivered from Asian shipyards. Vessel withdrawals and teething troubles introducing low-sulfur fuels as a result of new IMO 2020 regulations could suck some of this excess capacity out of the market in Q4.
"Some carriers are suspending their largest services for as long as six weeks at a time in an attempt to balance supply and demand, while others are removing services in order to install scrubbers ahead of IMO 2020," said Mikkelsen.
Rates Continue to Increase
With effect from October 1, 2019, freight rates for traffic from Southeast Asia, South Asia, Indian-Sub continental and Middle-East to Australia will be increased by USD 100/20GP and USD 200/40GP&HQ for both dry and refrigerated cargo in the base ocean freight.
A Rate Restoration program of US$300 / 20’ and US$600 / 40’ was also applied for both dry and refrigerated cargoes in the base ocean freight for cargoes from Korea, China, Taiwan and Hong Kong to ports and points in Australia from 15th of October 2019.
With these rates increase, it is vital to plan and forecast your orders and book spaces early. Rates are expected to rise and spaces become limited as peak holiday seasons approaches.
If you are an importer or exporter, chat to our Customer Success team to find out more on how we can secure space and guarantee rates for your peak retail trading season here.
For more tips on making the most of your peak trading season, see our previous blog post on Supply Chain Tips - How to Prepare for Peak Season Trading.
Whale Logistics are Australia’s Award Winning Freight Forwarder and Logistics company located in Sydney and Melbourne. We deliver digital services such as comprehensive ocean freight , air freight, customs brokerage, commercial import and export to Australia, and digital logistics solutions. For cost competitive and innovative freight solutions, please click the link below to contact a Whale Logistics Freight Specialist today for a quote.