OCEAN CARRIERS SUSPEND SERVICES TO MITIGATE RATES FALL
The Loadstar reported this week that the idled containership fleet has breached the 1 million TEU capacity milestone and is set to jump significantly higher as carriers prepare to temporarily suspend services rather than blank sailings.
According to Alphaliner, as of 24 October, the number of inactive containerships either in drydock or seeking employment had reached 284, for a capacity of 1.2 million TEU, representing 4.6% of the global cellular fleet. This number must be put in comparison with the peak of demand in February 2022, resulting in only 1.8% of global fleet capacity considered as inactive. Withdrawn capacity comes on top of regular blank sailings operated by carriers in the last weeks, with some Asia-North Europe loops even being voided in consecutive weeks.
The speed of the decline in exports from China has made the reactive blanking strategies of carriers ineffective at halting the erosion of spot and short-term rates, which are on course to fall below pre-pandemic levels before the end of the year, according to the Loadstar. It has been reported that carriers have temporarily suspended a number of services on major east-west tradelanes - probably until mid-January - ahead of the Chinese New Year holiday, in an attempt to avoid a collapse in contract rates with more radical capacity reduction plans.
Source: The Loadstar