Container lines are set to cancel a record number of sailings in the run-up to Christmas, to try to shore up sliding freight rates. The unrelenting decline in container freight rates from Asia, caused by a collapse in demand, is compelling ocean carriers to blank more sailings than ever before as vessel utilization hits new lows. Carriers are expected to blank two-thirds of sailings on the transatlantic and more than half on the transpacific in the pre-Christmas period. According to Drewry’s cancelled sailings tracker, the alliances are preparing to blank as many as 62 voyages from Asia to the US between weeks 48 and 52.
Meanwhile, the South Korean government has announced that it will establish a $2.2 billion fund to help support the country’s container lines amid the downturn in shipping markets. Details were revealed last week at a meeting between 10 shipping companies, including HMM and Heung-A Shipping, and officials at South Korea’s Ministry of Maritime Affairs and Fisheries. The aim is to prevent another collapse similar to the demise of Hanjin Shipping in 2016-17. Maritime Affairs and Fisheries Minister Cho Seung-hwan indicated South Korean shipping companies were generally loss-making between 2016 and 2020 and only returned to profit in 2021. He said freight rates have already fallen by 67 percent this year and carriers’ cash reserves “will inevitably decrease as freight rates fall.”