Carriers are increasingly canceling sailings, raising questions about whether this trend indicates declining shipping volumes or is a strategy to hike rates. Recent data from Container Capacity Insight shows a notable uptick in cancellations, particularly on the Asia-West Coast North America and Transatlantic routes. Typically, cancellations are common on the Asia-West Coast North America route in February due to the Chinese New Year. However, this year, carriers continued to cancel over 40 sailings a month in both March and April.
According to Drewry, U.S. importers are hesitant to ship goods from Asia to the U.S. because of uncertainty surrounding new tariffs that could apply upon arrival. This situation has led to lower shipping volumes following a period of increased activity in January and February. Given the anticipated decrease in year-on-year import growth, carriers might have opted to “blank” sailings as a preemptive measure. In addition to volume concerns, the rise in canceled sailings may reflect tactical maneuvering by carriers.
As negotiations for new service contracts are underway, carriers might cancel sailings to create an illusion of tight capacity, justifying potential increases in contract rates. The situation is similar on the Transatlantic route, where cancellations in March and April have doubled compared to the previous year. Unlike the Asia-West Coast route, fewer annual contracts are currently being negotiated on this route. The spike in canceled sailings seems primarily driven by uncertainties regarding U.S. tariffs and an anticipated decline in shipping volumes.
In conclusion, while the increase in cancelled sailings may signal weaker demand, it could also be a calculated strategy by carriers in a shifting market landscape.