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The Red Sea crisis superimposed on port congestion, the shipping industry is facing the double pressure of a surge in blank navigation and rising freight rates.

May 16,2024

Traditionally, shipping companies would use blank voyages to manage supply and demand, but during the epidemic, due to widespread congestion at ports, which led to a shortage of ship capacity, shipping companies had to go air despite high demand and high freight rates.

According to the Sea-Intelligence report,The current round of blank voyages is also due to a shortage of ship capacity, as the proportion of container fleet idleness in April was very low at 0.9 per cent.

The analysis agency said: "Through the analysis of the actual capacity deployment in March and April 2024, and compared with the plans formulated by the shipping company for the Asia-Europe route and the trans-Pacific route in mid-February 2024." As shown in the following figure:

The proportion of capacity for blank voyages from Asia to Northern Europe almost doubled from March to April, from-12% in March to-21% in April.For the Asia to Mediterranean route, the opposite is true, with the proportion of empty sailing capacity falling from-17% in March to-8% in April.

On the trans-Pacific route, the situation is more stable. In March and April 2024, the capacity to the West Coast of the United States was reduced by about-14%, and the capacity to the East Coast was reduced by-11%.

Alan Murphy, CEO of Sea-Intelligence, said:"This shows that the operating environment of the Asia-Europe route is more unstable than that of the trans-Pacific route.”

Alan Murphy said: "With almost no idle ships and spot freight rates rising sharply in recent weeks, the Red Sea crisis has driven an increase in blank sailing.Congestion is worsening at major hub ports in Asia and Europe.As seen during the epidemic, port congestion can drain supply and lead to potential capacity shortages.”

Murphy concludes: "Since the beginning of the Red Sea crisis, we have said:While there was sufficient capacity to divert ships to the African detour, there was not enough additional capacity to cope with other significant disruptions. Therefore,Port congestion must be controlled, or spot rates may rise further rapidly.”

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