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Coronavirus pandemic
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Container shipping lines cancel hundreds of sailings to stem losses as Covid-19 pandemic hits global trade

  • The number of blanked sailings jumped last week from 45 to 212, according to a report by shipping consultancy Sea-Intelligence
  • The Alliance, comprising four container shipping majors, has cancelled 32 scheduled departures this month amid falling demand

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A container ship makes its way to Qingdao port in China’s eastern Shandong province. The WTO said on Wednesday that global trade is set to plunge between 13 and 32 per cent this year as the Covid-19 pandemic upends the world economy. Photo: AFP
Ryan Swift

Container shipping companies are cancelling sailings and merging routes to cut losses and stay afloat amid a drop in demand and a worsening outlook for global trade because of the Covid-19 pandemic.

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The number of “blanked” or cancelled sailings rose last week from 45 to 212, according to a report by shipping consultancy Sea-Intelligence on Monday. The report added that the largest capacity withdrawal was from the Asia-Europe routes, where 29 to 34 per cent of capacity has been removed.

On April 1, The Alliance, comprising the container shipping majors Hapag-Lloyd, Yang Ming, Ocean Express Network and Hyundai Merchant Marine, announced the cancellation of 32 scheduled sailings this month. All except four connected Asia with either Europe or the US, indicating a steep drop in demand for container cargo, which is normally associated with finished products leaving Asia for these markets.

“Taking blanked sailings as a proxy, we believe that there has been a 20 to 30 per cent decline in demand for container transport,” said Andy Lane, director for Southeast Asia at Sea-Intelligence. Blanking sailings can help reduce operating costs and keeping freight rates from falling, but it will still hurt overall revenue.

The World Trade Organisation said in its outlook on Wednesday that global trade is set to plunge between 13 and 32 per cent this year as the Covid-19 pandemic upends the world economy. The WTO report also warned that estimates of the expected recovery in 2021 were equally uncertain, with outcomes depending significantly on the duration of the outbreak and the effectiveness of policy responses by nations.
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The drop in trade and container cargo shipping will hurt Asia's ports as well. The Seaport Alliance, a consortium of operators at Hong Kong's Kwai Tsing container port, reported that container throughput had dropped 11 per cent in the first two months of 2020 already.

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