As freight rates fell and new ships continued to enter service, major shipping companies significantly increased their flight cancellations (BlankSailings) in April to stabilize prices and ensure long-term contracts with shippers.
68 flights are expected to be cancelled globally this month, most of them affecting trans-Pacific routes, according to data from shipping consultancy Drewry. MEDITERRANEAN SHIPPING (MSC) ANNOUNCED THE CANCELLATION OF SIX FLIGHTS FROM ASIA TO THE UNITED STATES, MAINLY AFFECTING SERVICES FROM NORTHERN CHINA AND VIETNAM TO THE WEST COAST OF THE UNITED STATES.
Other major carriers, including Ocean Network (ONE) and CoscoShipping, have also adjusted their flight schedules, canceling flights on some routes in mid-April. For example, ONE's Premier Alliance will not schedule cruises on EC1 (U.S. East Coast) and EC2 (Mexico and Southeast U.S.) routes. Similarly, Midships' ManhattanBridge, Bohai and HibiscusExpress services also had no scheduled flights for the second week of April.
Trans-Pacific Immediate Shipping Rates (SpotRates) have dropped to their lowest point in 15 months as a wave of flight cancellations emerged. Shipping from North Asia to the U.S. West Coast has dropped to $1,600 per 40-foot standard container (FEU) and $2,600 to the U.S. East Coast, according to S&P Global's Platts.
Joseph Firarcieli, Sales Manager at OEC Group Freight Forwarding, said that carriers adopted a strategy of cancelling flights to reduce the supply of market labor, creating a supply imbalance, to drive more favorable long-term contract prices. These contracts are usually concluded before May 1.
Despite the decrease in flights in the short term, the momentum in the trans-Pacific market continues to increase. Container traffic on the US West Coast from March to April will grow 19% from 115.9 million TEU (20-foot standard container) to 137.9 million TEU, according to data from EEsea. This figure is expected to rise further to 142.6 million TEU by May.
As new ships continue to deliver, some analysts predict that carriers may need to cancel flights further to avoid further declines in freight rates. For now, shippers have not been significantly affected, but Firincieli warned that if the tide of flight cancellations continues into June or July, the market could face a shortage of positions, especially as businesses import goods ahead of time in response to potential tariff changes.
In the context of the continuing volatility of the shipping market, carriers, freight carriers and shippers must remain flexible. If flight cancellations persist for months, businesses should prepare early, ensure transportation capacity, and consider alternative strategies to maintain supply chain efficiency in a changing global marketplace.
Data Source:https://www.joc.com/article/april-blank-sailings-ramp-up-amid-push-to-finalize-long-term-contracts-5974802
