April blanks from China grow as US import decline continues

As US import demand continues to wane, ocean carriers plan to cancel almost 50 voyages that were scheduled to depart from Chinese ports now through the end April, amounting to as much as 443,000 TEU in trans-Pacific capacity that will be blanked, according to data from container shipping analysts.

Those blanked sailings signal that US ports will continue to see weaker year-over-year volumes at least to the beginning of summer. US imports from China in February fell 37 percent year on year to 640,846 TEU, according to data from PIERS, a sister product of the Journal of Commerce within S&P Global.

For ocean carriers, the decision to cancel sailings suggests they expect no rebound in trans-Pacific freight rates that are now at two-year lows. The Shanghai Shipping Exchange shows the rate from Shanghai to the US West Coast at $1,163 per FEU, while the rate to the East Coast sits at $2,194/FEU.

Those 47 blanked sailings from Chinese ports represent some 443,100 TEU in capacity, according to Monroe’s data, which compiles schedule information from 70 trans-Pacific and Suez services to North America.

The blanked capacity does not directly translate into an actual drop in container volumes as the services may still call ports in other Asian countries. Likewise, a ship may skip one Chinese port but call another. But the blanking data does point to ongoing weakness in China’s shipments to the US.

Shanghai accounted for 27 of the blanked sailings during the period, with some 241,750 TEU of capacity bypassing China’s busiest port by volume.

Some 12 sailings from Yantian, China’s major southern port, will be blanked through the third week of April, accounting for some 126,100 TEU in nominal capacity, Monroe’s data shows.

While not exactly matching Monroe’s data, Sea-Intelligence Maritime Analysis also sees an uptick in blank sailings for the coming weeks. In a report published Friday, Sea-Intelligence estimated that ocean carriers plan to blank 354,100 TEU of trans-Pacific capacity during April, amounting to 13.7 percent of deployed capacity in that trade lane.

That is up from their week-earlier estimate of 200,400 TEU of blanked capacity in April, amounting to just under 8 percent of deployed capacity.

Fleet gains offsetting blank sailings 

Those blanked sailings appear barely able to keep ahead of increases to fleet size expected this year.

Meanwhile, US West Coast marine terminals appear to be steeling themselves for more volume declines by cutting work shifts for longshore labor. The Port of Los Angeles reported that container throughput during the last week of March is down 40 percent from a year earlier.

Shippers, too, are also reporting that inventories of retail goods remain stubbornly high, with the hopes for a second-half volume recovery now diminishing.

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