Shipping consultancy Drewry has warned that boxship rates could take around 20 weeks to recover from a post-Chinese New Year (CNY) slump.
The holiday sees factories shut down as families reunite during a week-long rest from work.
Drewry said that to counter the anticipated demand lull, carriers will usually blank a number of sailings in a bid to better match supply with demand.
So far the company has logged 15 blank sailings announced for February for the Asia-West Coast North America trade, while there are eight such non-voyages for the Asia-North Europe route.
This tactic has proved "relatively successful," Drewry said, with its World Container Index (WCI) benchmark rates for ex-Shanghai to Rotterdam and Los Angeles averaging a post-CNY decrease of about 1.5% since 2012.
The real problem, however, is the length of time it takes rates to recover.
"Market fundamentals, of course, play a significant role in the speed of the recovery, but recent history does suggest that there is some element of a psychological impediment surrounding CNY," Drewry said.
"The old adage that rates fall much easier than they rise seems to be applicable as carriers have routinely struggled to kickstart the market post-CNY."
The consultancy suspects that timing has played some unquantifiable role in the past.
"Carriers and alliances often reshuffle their service networks around the start of the second quarter as they adjust to new tonnage," it said.
"Having to absorb additional capacity and rationalise services during the post-CNY down-time for rates could be prolonging the time it takes for freight rates to recover."
New capacity to delay recover?
This spring sees one new Asia-Europe service from the Ocean Alliance coming, along with other vessel upsizing elsewhere.
"This would imply another lengthy wait to see spot rates return to last week’s level," the company said.
"In our view, there will be the customary slide, but we think that it will more closely resemble last year’s more benign recovery period when carriers had to wait around 20 weeks for Asia-Europe and Transpacific to get back to pre-CNY levels."
Westbound Asia-North Europe demand growth is expected to be far stronger in 2019 than it was last year and Drewry thinks carriers will be more pro-active in managing capacity via newbuild deferrals, idling and greater use of scrapping and slow steaming.
"Despite the risks, the speed of rate recovery from Chinese New Year should be quicker than seen in previous years if carriers maintain a focus on capacity management and pricing discipline," it added.
