What is a Blank sailing..??

Date: Friday, April 5, 2019
Source: Shipping and Freight Resource

  • Trans-Pacific carriers accelerate blank sailings
  • More blank sailings spell volatility for trans-Pacific
  • AE2-blank-sailing-announcement-Europe-Services – Maersk
  • Falling US imports spell more trans-Pacific blankings
  • Soft demand and falling rates push 2M to blank another Asia-USEC sailing
  • Ocean Alliance to Blank Ten Transpacific Sailings as Spot Rates Plummet

These are some of the headlines you might have seen across many media, all with one common factor “blank sailings“..

What is this blank sailing and how does it impact or influence global container shipping..??

Liner Service is a service that operates within the parameters of a sailing schedule, with a fixed port rotation and published dates of calls at advertised ports..

A sailing schedule has a list of ships that operate in that service, its voyage number for each call, the ETA and ETD dates and the ports of calls..

Due to various reasons, a liner service operator might decide to cancel the call of a vessel at a certain port or certain region, or the entire leg..

When that happens, that particular port/region/entire route will have a “blank sailing” which simply means that for that week or fortnight or month (depending on the frequency of the liner service) that area will not have a vessel to discharge or load cargo..

When there are blank sailings, the line usually announces it on their sailing schedule so the customers can plan their shipments accordingly..

This blank sailing is a normal occurrence on various shipping routes but something that many people, especially the customers do not understand in terms of its logic or why it happens..

What are the reasons for blank sailings..??

A liner service is allocated a specified number of days to complete a full rotation covering all the ports of call on the schedule..

Each port on the service is allocated a specific number of days for the discharge and loading operation..

Only if the time frames at each port are met, the service can maintain its schedule integrity (ensure that the vessel calls the scheduled ports on the scheduled dates)..

Sometimes the vessel might not be able to stick to this specific number of days due to weather delays, strikes, non-availability of berth at the port etc..

In such cases, in order to maintain the schedule integrity, some of the ports on the route may be skipped..

Example : Liner service from Singapore – Santos – Durban – Hong Kong..

As per the ship’s schedule it will

  • Sail from Santos on the 31st March to
  • Arrive in Durban on the 10th of April
  • Sail from Durban on the 12th of April to
  • Arrive Hong Kong on the 30th of April

However, due to weather delays in Santos which affected its berthing, the vessel is expected to berth in Santos only on the 4th of April..

This 5 day delay cannot be adjusted because the schedule integrity has to be maintained and the ship may need to reach Hong Kong on the 30th of April as Hong Kong is a main transhipment hub for the shipping line and a lot of containers may be compromised..

Therefore, a decision might be taken to skip Durban port altogether in order to make up for the delay.. This means that the cargo planned to be loaded from Santos for discharge in Durban will now be loaded only on the next vessel – maybe a week later and the same for the cargo already planned to be loaded in Durban for loading to Far East..

So for that week in April, Durban will have a blank sailing as the vessel has skipped its port call..

There are also a few other compelling reasons for blank sailing and those are

  1. Urgent repairs that can be carried out only at a certain port
  2. Ship has to be off-hired for some reason
  3. There is a severe berthing delay at a port due to a strike or port closure

While the above reasons are incidental, there are also “planned” blank sailings in some cases..

One of the reasons that carriers plan blank sailings is to reduce capacity on certain trade lanes and services..

Recently, Trans-Pacific carriers had to cancel several sailings to reduce eastbound TEU capacity due to a steep drop in demand caused by Lunar New Year in Asia..

You might have seen announcements from the carriers as below

MSC would like to inform customer about an additional blank sailing during week 14 to rationalize capacity supply from Asia to the US East Coast due to the slower demand after the Chinese New Year.

JOC reported that carriers operating to the USA West Coast reduced 222,600 TEUs while on the East Coast 127,300 TEUs were removed.. As per SeaIntelligence, carriers on the Asia to the West Coast route announced cancellation of 22 sailings in a 3 week period coinciding with the Lunar New Year..

The blank sailings were required to bring the overcapacity in line with the average volumes of recent years.. Such reduction in overcapacity is in some cases also designed to create an increase in rates which the carriers use as leverage during contract negotiations..

As per JOC, in 2018, carriers were forced to accept extremely low spot rates of around $1,200/40′ to the West Coast and $2,200/40′ to the East Coast..

But the front-loading of cargo started a rate frenzy that saw West Coast spot rates rise from $945/40′ in March to $2,606/40′ in November and East Coast spot rates surge from $1,933/40′ in March to $3,739/40′ in November..

Neither the carriers nor the shippers or forwarders can accept such rate volatility as this is neither sustainable nor healthy for anyone..

In such cases, reducing overcapacity on the route using blank sailings to bring rates in line with everyone’s expectation is seen as a realistic option..

So what is the solution for blank sailing..?? 

Well there is no real concrete solution for blank sailing as it is caused by market dynamics which affects supply and demand of space on the ships and also the resultant rate actions..

In most cases, blank sailing may even be a necessary evil required to allow the market situation to correct itself..

If it is a planned blank sailing, all that the shipping lines can do is to announce these blank sailings as early as possible and advise customers and all that the shippers can do is to plan their shipments in such a way as to avoid blank sailings..

 

Read from the original source.

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