07 Dec As Lower Rates Persist, High Service Levels Will Desist
Whilst businesses may reap the benefits of lower rates, they may also experience a decrease in service levels and vessel schedule reliability as shipping lines adopt measures such as blank sailings and cancelled services in a bid to manage excess capacity.
With capacity anticipated to increase by 25-35 per cent across the US west and east coast respectively as a result of new vessels and weakened demand, trans-Pacific shipping organisations will work to reduce capacity via blank sailings. According to Sea-Intelligence, September saw the blanking of 200,433 TEUs and October will see an additional 370,688 TEUs in blanks.
Given on-time performance is already sitting at approximately 40% across both coasts due to factors such as blank sailings and Panama Canal related delays, any further cancellations and blank sailings will significantly deteriorate schedule reliability.