Commentary Trading Places

By Peter Tirschwell

The industry can no longer be understood in terms of supply and demand on paper.

A slide presented by Maersk’ s global head of ocean product at the Journal of Commerce’ s TPM26 conference said it all.

The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes point to effective capacity management by carriers.

“ With very volatile demand, we actually see a utilization which is quite stable,” said Johan Sigsgaard, Maersk executive.“ And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of [ blank sailings ].”

In other words, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity.

Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper; one must consider multiple forms of brakes on capacity.

“ We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive

Shutterstock. com vice president for imports at MTS Logistics in New York, who attended TPM26.“ Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels.

“ With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added.

Carriers took their first steps toward capacity management at scale during the 2008 – 09 financial crisis, when they laid up about 10 % of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10 % drop in global volumes.

Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020, including the COVID-19 pandemic, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market.

All that means is that despite a record order book amounting to about 35 % of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID-19 due to the growing relevance of the capacity side of the equation.

The industry is experiencing an“ illusion of a normal downcycle,” Flexport’ s global head of ocean, Trine Nielsen, said during TPM26.“ We do have the macro volatility layer, as we call it, and I think just the past week and a half,” with war breaking out in the Middle East and the Supreme Court striking down the IEEPA tariffs“ is the perfect proof of how quickly the world changes.”

Nielsen added that“ micro volatility” has also become more apparent.“ One aspect is the capacity management, dealing with blank sailings, dealing with [ cargo ] rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we’ re in,” she said.

email: peter. tirschwell @ spglobal. com

54 Journal of Commerce | April 6, 2026 www. joc. com