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This week, shipping analyst Sea-Intelligence reported that container carriers will likely use China’s Golden Week starting on 1^st October as an opportunity to pull more capacity from the market, with the number of blank sailings to reach the highest level in years.

On the Asia-North Europe trade, Sea-Intelligence estimates that the peak capacity reduction following Golden Week will reach up to 20%. This capacity removal will be greater than the 2014-2018 average. On the Asia-Mediterranean, the estimated capacity reduction during Golden Week 2022, would be in line with 2014-2019 standards. This reduced booking offer from carriers comes at a time when the container market is overall seeing lower demand and falling freight rates - a trend that follows a two-year period characterised by a historically strong and profitable market.

This drastically reduced capacity will again affect European forwarders and exporters, already suffering from very low levels of service quality from carriers. While spot rates are rapidly decreasing as reported by the Loadstar this week, they remain well above the pre-pandemic levels, noticing that carriers continue to artificially manage freight rates to high levels by cutting capacity short. DHL Global Forwarding, Markus Panhauser noted that the drastic reduction of capacity would create “another empty container shortage crisis, and it will require some creativity to get the boxes to where they are needed.”

Source: Sea-Intelligence, the Loadstar