More Blank Sailings on the Horizon

The outlook for container shipping post-Lunar New Year is looking increasingly bleak, as more lines are caving to the mounting pressure and announcing an increasing number of blank sailings.

 

The industry was already feeling the strain prior to Lunar New Year, with container imports into North America and Europe slowing from their peak. This slowdown has been exacerbated by the current situation, with factories in China being closed and demand for transportation of goods stalling.

 

The result of this is that container lines are having to take increasing numbers of blank sailings as they grapple to balance capacity and demand. This is a costly move for the lines, but essential in order to prevent any oversupply that would further drive down rates.This is likely to have an effect on the rest of the industry, with traders and shippers facing higher transport costs and longer transit times.

 

It is likely that the current situation will continue for some time and, as such, container lines may be forced to adopt further contingency measures. This could mean more blank sailings, which will further reduce container imports and add to the current industry woes.

 

In the short term, the container shipping market will remain volatile and unpredictable. In the meantime, shippers must remain alert to the possibility of yet more blank sailings, and plan their container imports accordingly. In doing so, they can minimize disruption to their business and ensure smooth operations, even in the face of an increasingly challenging industry.

 

With disruption and delay on the horizon, you need a trusted partner familiar with navigating these waters. At Future Forwarding, our years of experience and expertise can help you plan around these snarls and keep your cargo moving. Reach out today to see how your future could look with Future Forwarding. 

 

COVID Keeping Delays Consistent in China

The “COVID-zero” strategy throughout China and Hong Kong threatens to drive up logistics costs by 40% and drive down capacity to one-fifth of pre-pandemic levels as cities around Beijing restrict travel in response to new cases. Airports, highways, railways, ports, and other transportation sectors in Shenzhen, which shares a border with Hong Kong, are stepping up pandemic control measures as small outbreaks of the COVID-19 Omicron variant pop up in Tianjin, Xian, and Guangdong, China. 

 

With Cathay Pacific canceling hundreds of flights and the Port of Tianjin and airport suspending all pickup operations, the situation is stretching the supply chain to the breaking point. The omicron variant ended a three-month streak without local transmissions in Hong Kong where a two-week ban on incoming flights from eight countries is in effect until at least January 20th. 

In Shenzhen (an area where previously the most recent case was in May of 2020), two confirmed cases of COVID-19 have a contract tracing footprint of 123 people, some of who are isolated on a cruise ship that is now quarantined in the harbor pending testing. The fear of silent transmission chains has seized the cities leading to travel restrictions pending a negative test within 48 hours and requiring commuters to work from home rather than move between cities.

 

Because authorities in Shenzhen determined that it was highly likely that exposure came from a contaminated cargo shipment extra precautions are being taken at ports and airports to protect handlers from coming into contact with COVID-19. The added security measures will further delay cargo processing in addition to the reduction in workers as companies test and adopt enhanced screening procedures. 

Apart from ports and airports, highways and railways are experiencing delays, especially in the trucking sector as many warehouses turn away drivers from outbreak impacted areas. Last week, trucking operations at the Port of Ningbo were delayed by testing and this week trucking around Jinhua Yongkang is suspended pending testing results. 

 

Because Future Forwarding is dedicated to providing individualized supply-chain solutions to a range of businesses we encourage our clients to reach out for more information and ideas on how we can mitigate the delays we are facing. We know this could mean last-minute changes to carriers or modes of transport which could come with additional costs, but will do our best to mitigate or prevent them wherever possible.

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