Liner operators led by Maersk and Mediterranean Shipping Co (MSC) have blanked more than 40 sailings in just a few days due to a drop in demand caused by the coronavirus.
The cancellations are being led by the 2M partners who will temporarily suspend two services between Asia and Europe that account for more than one-fifth of capacity on the trade.
That has pushed up the number of blanked sailings unveiled by liner operators from two to 45 in the week to 29 March, according to Sea-Intelligence estimates.
The 2M partners this weekend announced plans to suspend their AE2/Swan service, which operates between Asia and northern Europe using 23,756-teu vessels.
They will also suspend their AE2/Dragon service that uses ships of 13,000 teu to 16,650 teu between Asia and the Mediterranean.
The first cancellations affect the scheduled sailings on 8 April of the 23,656-teu MSC Sixin (built 2019) and 16,652-teu Venice (built 2016).
Short notice
Maersk and MSC said the cancellations were intended to match capacity with reduced demand caused by Covid-19.
They left open the possibility that additional blanked sailings might be announced in the coming week.
That will depend on demand picking up at a time when the lockdown in several European nations is thought to be curtailing demand.
The AE2/Swan service was to become the biggest of the six Far East-North Europe loops of the 2M vessel-sharing agreement, according to Alphaliner estimates.
2M’s capacity withdrawal equals a 21% capacity reduction in the Asia-Europe trade, according to Sea-Intelligence.
“Quite a few of the blank sailings from all the alliances are made with a notice time much shorter than usual. This fact is a clear indication that the drop-off in booking levels is happening very quickly,” said Sea-Intelligence.
“It should, therefore, be expected that this week will see a further rapid escalation in the amount of blank sailings both by other carriers as well as in other trade lanes.”
“Furthermore, the effect of the virus outbreak in China was the cancellation of more than 100 sailings and we should, therefore, expect the pandemic spread to have an even more substantial impact," it said.
Last week, Hapag-Lloyd chief executive Rolf Habben Jansen would have no qualms in pulling capacity in the coming weeks if that is necessary.
Hapag-Lloyd operates as a member of THE Alliance, with partners Yang Ming Marine of Taiwan and Japan's Ocean Network Express.
They will be joined on 1 April by South Korean carrier HMM as the fourth member of THE Alliance.
The German line already unveiled plans to blank multiple transpacific sailings in April and May, as has Hong Kong-based Orient Overseas Container Line (OOCL), which blanked three additional transpacific sailings in March.
OOCL also plans to postpone the launch of a new East Mediterranean-America service by three weeks until 25 April.
Bleak prognosis
The blank sailings are being unveiled in the face of increasingly bleak forecasts for the container trade.
That is reflected in a rising idle fleet, which amounted to around 11% of total capacity in early March, including vessels undergoing scrubber retrofit, according to estimates by shipbroker Clarksons.
“The impact of the global spread of Covid-19 is now the primary determinant of trends in the containership sector, overriding the cautious optimism felt early this year,” said Clarksons.
“With forecasts for world GDP growth this year being revised substantially lower and a major recession now widely expected, global box trade in 2020 is provisionally projected to contract by 5% in teu-miles.”
“As a result, the boxship sector looks set to experience a very challenging 2020.”
