Imagine the arteries of global trade—the ocean shipping lanes—suddenly constricted, with massive vessels forced to drop anchor while once-bustling ports grow quiet. As the COVID-19 pandemic crushed consumer demand, shipping companies resorted to extreme measures: mass cancellations of voyages (known as "blank sailings"). But has this storm truly subsided?
Sea-Intelligence's latest report indicates that blank sailings implemented to address plummeting consumer demand during the pandemic may have reached their projected peak. However, this doesn't mean smooth sailing ahead. Alan Murphy, CEO of Sea-Intelligence, warned that if macroeconomic conditions shift or shipping companies fail to see increased demand from shippers, additional cancellations could extend the peak period.
IMPACT OF BLANK SAILINGS: CAPACITY CRUNCH AND RELIABILITY DECLINE
Data reveals that as of last week, 38% of capacity on the Asia-Northern Europe route has been canceled, with at least seven weeks seeing over 20% capacity reductions. This means nearly 40% of cargo movement on this critical route faces direct disruption, threatening supply chain stability and efficiency.
More concerning is the sharp decline in schedule reliability. Global carriers achieved just 68% on-time performance in Q1 2020—among the lowest quarterly figures since 2011. While March showed slight improvement from late 2019's downward trend, Murphy cautioned that April's increased cancellations could reverse this progress. Declining reliability translates to heightened risk of cargo delays and additional costs for businesses.
SIGNS OF RECOVERY: FALSE DAWN OR GENUINE HOPE?
Current carrier schedules show reduced blank sailings in coming weeks, which Murphy suggests might indicate rising booking volumes. "But there are no guarantees here," he emphasized, "We're simply reporting what's on the books." The reduction could prove temporary amid ongoing uncertainty.
THREE PHASES OF PANDEMIC-ERA BLANK SAILINGS
- Phase 1: Lunar New Year - Seasonal factory closures caused predictable annual sailing reductions.
- Phase 2: Supply-Driven - Chinese factory shutdowns disrupted global supply chains.
- Phase 3: Demand-Driven - Lockdowns and social distancing measures collapsed consumer demand, creating the current crisis.
Murphy noted the unpredictable duration of Phase 3: "If lockdowns persist, depressed demand will force continued cancellations." Consumer demand recovery remains the decisive factor.
CAUTIOUS OPTIMISM: APRIL CARGO VOLUMES MAY REBOUND
Despite challenges, some industry observers anticipate April cargo increases. "We expect rising container volumes as Chinese manufacturing resumes and U.S. businesses restock," said Port of Los Angeles Executive Director Gene Seroka. However, Murphy predicts May's cancellations will surpass March's levels, suggesting overall demand remains insufficient for normal operations.
DOMINO EFFECTS: CAPACITY SHORTAGES AND EMPTY CONTAINER GRIDLOCK
Blank sailings create difficulties for shippers seeking capacity. "Even pre-pandemic, blank sailings ranked among shippers' top three challenges," Murphy noted. "Minimal cancellations cause major disruptions." The crisis exacerbates empty container repositioning problems, with carriers deploying vessels specifically to clear backlogs. Insufficient capacity to return empty containers to origin points may cause export delays, further disrupting global trade.
STRATEGIES FOR SHIPPERS NAVIGATING THE CRISIS
Businesses should consider these approaches to mitigate blank sailing impacts:
- Advanced Planning: Monitor market trends and maintain close communication with carriers.
- Diversified Transportation: Utilize multiple carriers and transport modes (sea/air/rail).
- Inventory Optimization: Balance safety stock with demand fluctuations.
- Supply Chain Collaboration: Enhance coordination with suppliers and customers.
- Technology Adoption: Implement real-time monitoring via AI and big data analytics.
THE FUTURE OF SHIPPING: CRISIS AND TRANSFORMATION
The pandemic accelerates industry transformation, compelling carriers to embrace digitalization and operational improvements. Governments and trade associations must collaborate to support sustainable recovery. Key emerging trends include green shipping initiatives, smart shipping technologies, and regional shipping networks.
While blank sailings may have peaked, the shipping industry remains vulnerable to demand fluctuations. Both shippers and carriers must adapt to this new reality, building resilient operations capable of weathering future disruptions.