Ocean Carriers’ Successful Vessel Supply Adjustments Could Be Disrupted by New Vessel Deliveries.
Recent increases in freight rates on the trans-Pacific route have been attributed to ocean carriers successfully adjusting vessel supply to meet demand through schedule changes and canceled sailings.
However, this balance could be disrupted by the impending delivery of new vessels, posing a potential risk to ocean freight rates, according to experts in the industry.
Blank sailings, where scheduled sailings are canceled, have played a role in the recent gains in freight rates.
The trans-Pacific trade saw an increase in blank sailings activity, with 21.7% of capacity blanked in July, up from 14.7% in June.
While this is a significant improvement from last year’s numbers, container spot rates have risen in the past month.
Despite the current success in managing capacity, concerns are growing due to the anticipated delivery of new vessels to ocean carriers.
The coming months will witness a wave of new supply, and this influx of capacity could lead to a weakening of ocean freight rates throughout the rest of the year and into 2024.
The challenge for carriers will be to navigate this increase in capacity while maintaining rates.
Experts emphasize that carriers might need to implement a more aggressive blanking program to prevent rates from crashing in the face of excessive capacity.
The next few months are expected to witness substantial growth in vessel supply, and carriers will likely need to take strategic actions to maintain rate stability.
Source: JOC