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The Loadstar recently reported on the latest edition of project44’s Ocean Carrier Report, concluding that ocean carriers are resorting to more aggressive blanking strategies to manage a dip in demand and decreasing freight spot rates.

The report notes that the 2M alliance (Maersk and MSC) was “the most aggressive, cutting back its services by as much as 71% in the second week in May”. Project44 considers carriers have chosen to protect profitability against ocean freight spot rates in freefall and demand for containers down year-on-year. It suggested that other tactics including more slow-steaming, would be employed by ocean carriers lines to underpin rates and mitigate the impact of soaring bunker costs.

In addition, the report highlights an increasing trend of carriers to divert vessels to more profitable routes, leaving some network trades without any ship assigned. “Vessel nominal TEU capacity data shows there is more tonnage available, but carriers appear to be putting the brakes on softening spot rates by tightening up supply on certain routes while switching tonnage to the most profitable tradelanes,” said Josh Brazil, VP of supply chain insights at p44.

This strategy has also been emphasised by the recent edition of the GSF-MDS Transmodal Container Shipping Market Quarterly Review, where the direct services between regional markets have been reduced over the past two years. These have been replaced by connecting services requiring transhipment at hub ports, adding delay and cost.

Source: The Loadstar