Asia – Europe carriers target pre-Lunar New Year demand with blank sailings , rate hikes

By Greg Knowler

Forwarders expect freefalling Asia-North Europe ocean spot rates to hit bottom in October and then climb through the remainder of the year as carriers increase blank sailings and roll out rate hikes to target early Chinese New Year demand .

In a mid-October advisory to customers , a Europe-based global forwarder said there is less volume currently on the Asia – Europe trade because some factories and shippers were holding cargo back in anticipation of rates falling further . But that will change , the forwarder warned .

“ November demand is expected to be strong because the blank sailings will limit capacity and the Chinese New Year peak will be earlier because of the longer transit times [ around southern Africa ],” the advisory noted . Lunar New Year will be earlier in 2025 , falling on Jan . 29 compared with Feb . 10 this year .

The head of ocean freight at a Germany-based forwarder who asked not to be identified agreed that rate levels were likely to rise through November , with demand picking up from early in the month amid carriers withdrawing capacity .

Carriers have so far been unable to stem the rate slide in the traditionally slow post-Golden Week period that followed an early Asia – Europe peak season , but they are pulling hard on capacity management levers in a bid to balance supply and demand .

“ As a consequence of the decline in demand , Maersk is looking to balance the network accordingly ,” the carrier said in an Oct . 14 customer advisory .

Data from visibility provider eeSea shows carriers were expected to blank 271,382 TEUs on Asia – Europe routes in October , representing 20 % of available capacity on the trade . That ’ s up from 16.5 % in September and 15.3 % in August . November blanks were not yet available .

Total Asia-North Europe capacity — comprising both available and blanked capacity — was 1.35 million TEUs in October , compared with just over 1 million TEUs during the same month last year , according to eeSea .

Carriers this year have kept idle capacity at low levels while adding significant numbers of new vessels . So far this year , capacity delivered in the “ ultra-large ” vessel segment of 14,501 TEUs and above is at is at 658,048 TEUs , according to Sea-web , a sister company of the Journal of Commerce within S & P Global .

On a global level , shipping association BIMCO has forecast cargo volume growth at 3 % to 4 % in both 2024 and 2025 , which will be easily outstripped by fleet growth due to top 9.5 % in 2024 and 4.9 % in 2025 .

“ In 2024 , 478 container ships with a capacity of 3.1 million TEUs are scheduled for delivery , beating the 2023 record by 41 %,” Niels Rasmussen , BIMCO ’ s chief shipping analyst , told the Journal of Commerce in an interview .

Planned rate increases

The Asia – North Europe capacity cuts have yet to exert any upward pressure on rates during the traditionally slow post-Golden Week period in early October that followed an early peak season on Asia-Europe .

Spot rates from Asia to North Europe have lost more than $ 5,500 per FEU since early July , when pricing hit a 2024 high of $ 8,500 per FEU , according to Platts , also part of S & P Global . The average rate in the week of Oct . 11 was $ 2,980 per FEU .

Several carriers have announced higher freight-all-kinds

20 Journal of Commerce | November 4 , 2024 www . joc . com