SHIPPING: Carriers to increase blank sailings on Asia-USWC around Lunar New Year

Adam Yanelli

14-Jan-2025

HOUSTON (ICIS)–Ocean carriers will increase blank sailings around the Lunar New Year holiday to support elevated container rates, but now that the labor issues at US Gulf and East Coast ports have been resolved, some analysts think rate growth will slow, or shippers could even see lower rates.

Emily Stausbøll, senior shipping analyst at ocean and freight rate analytics firm Xeneta, said spot rates may now begin to fall but warned that shippers still face other supply chain threats in 2025.

“Looking ahead, it is likely spot rate growth will now soften on trades into the US from Asia, suggesting a brighter outlook for shippers negotiating new long-term contracts,” Stausbøll said.

“Shippers must remain cautious, however, because it will not take much for freight rates to begin spiraling once again, particularly given the ongoing conflict in the Red Sea and the return of [President-elect Donald] Trump to the White House, which could escalate the US-China trade war,” Stausbøll said.

Alan Murphy, CEO of Sea-Intelligence, defines the four-week Lunar New Year period as the week of the holiday plus the following three weeks.

Murphy said carriers have so far scheduled blanked capacity of 9.0%, which is in sharp contrast with the 22.8% blanked in 2024, and the average reduction of 18.3% from 2016-2019.

For context, the blanked percentage in 2021 (where pandemic demand was surging) was higher at 10.7%.

“Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Murphy said. “This would result in a situation reminiscent of 2023 and 2024, where significant capacity cuts were made very close to Lunar New Year.”

CHANGING ALLIANCES
Several major carriers are restructuring alliances in 2025, which is also adding some uncertainty to shipping.

Shipping alliances are agreements between carriers to collaborate globally on specific trade routes.

This will be the most significant shift in alliances since 2017, according to analysts at freight forwarder Flexport.

The changes will see Mediterranean Shipping Co (MSC) breaking from the 2M alliance with Maersk and will service customers alone with its expanded fleet now the largest in the market.

MSC said it will incorporate more direct call services.

Maersk and Hapag-Lloyd will form the Gemini Alliance, with a reduced number of port calls that they say will improve reliability.

The Ocean alliance consists of OOCL, Evergreen, COSCO, and CMA CGM.

The Premier alliance will be made up of Ocean Network Express (ONE), South Korean shipping line HMM, and Taiwan’s Yang Ming.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said it remains to be seen if there will be any improved service metric from the shifts.

“The rollout and adjustment period will probably stretch into March,” Levine said. “This is going to coincide with easing seasonal demand, so it could be a factor that pushes rates down if we do see some competitiveness between the new alliances that they compete for customers.”

Levine also said the adjustment period could lead to increased schedule disruptions as vessels are being moved into place for these new services.

CEASEFIRE, SUEZ CANAL
On a side note, container ships have been avoiding the Suez Canal for more than a year because of attacks by Houthi rebels on commercial vessels.

A ceasefire in the Gaza conflict could potentially end attacks in the Red Sea, reopening the Suez Canal.

This would have the greatest impact on normalizing the Asia-to-Europe container shipping route but would also affect Asia-US rates as shipping capacity would surge once carriers no longer must divert away from the Suez Canal.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets.

They also transport liquid chemicals in isotanks.

Focus article by Adam Yanelli

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