EsAn increasing use of blank sailings by container-lines – cancelling planned services – may be a sign of expectations of weaker demand in the container-line industry. That has been particularly prevalent for the Ocean Alliance including Cosco Shipping, CMA-CGM and Evergreen where three Trans-Pacific sailings for July have been cancelled, Journal of Commerce reports.
There have also been cancellations on Trans-Atlantic routes according to APL’s customer website while CMA-CGM is delaying sailings on two Asia-North Europe lanes by a week.
Panjiva data shows that volume growth for the Ocean Alliance group as a whole on U.S.-inbound routes only expanded by 1.0% year over year in the three months to May 31, compared to an 8.2% expansion in 2018.
That was largely down to a 13.0% drop in handling by Cosco Shipping of 13.0% not being offset by a 17.6% surge in shipping handled by Evergreen. The volumes carried by CMA-CGM and Orient Overseas – which is now a part of Cosco Shipping’s parent company – increased by 0.9% and 0.3% respectively.
The reduced growth for the alliance overall is largely down to imports from China which fell by 0.3% year over year in the three months to May 31, and still account for 57.2% of the Alliance’s volumes in the 12 months to May 31.
Source: Panjiva
The timing of the withdrawals is somewhat surprising given the proximity of the peak shipping season and the potential for increased U.S. tariffs on Chinese imports, as outlined in Panjiva’s research of Jun. 27.
The Ocean Alliance’s U.S.-inbound volumes from China have two peaks in the year, with the months of July and August seeing volumes that are 108.7% of the other months in the 2013 to 2017 period. There was a later peak in 2018 due to inventory building ahead of tariffs applied later in the year.
Source: Panjiva
During the most recent peak shipping season of July and August 2018 the major consignees of the Alliance’s services from China unsurprisingly include retailers ranging from Target and Home Depot to Amazon.com.
The Alliance has already seen a loss in volumes of shipments from its major manufacturing customers. In the home appliance sector that includes Haier, which accounted for 22.7k TEUs of shipments in the 12 months to May 31 after a 48.1% drop in the three months to May 31 compared to a year earlier.
Washer tariffs cut 37.2% from Bissell‘s shipments, which reached 15.3k TEUs in the past 12 months. Vacuum producer Sharkninja was an outlier with a 61.6% surge in the past three months to reach 13.9k TEUs.
Other major sectors served where there has been a downturn include toys – where Mattel shipped 8.8k TEUs after a 26.3% decline while Samsung Electronics dropped 47.8% and shipped 12.3k TEUs.
Source: Panjiva
