SIMIC

China's Golden Week of public holidays runs October 1-7 and comes at an odd time for the container sector, as congestion-induced overheating cools off in the market and this year's peak season falls flat, reports UK's Seatrade Maritime News.

Alan Murphy, CEO, Sea-Intelligence noted in a recent update that container lines have spent much of the past two years struggling to meet demand, blanking sailings as vessels were unable to keep schedules due to delays at congested ports. Lines now find themselves using blank sailings to cut vessel supply to maintain freight rates.

"In the past few months, demand growth has stalled, vessels are not fully utilised, and freight rates have been dropping consistently and considerably. This is where the carriers would naturally resort to tactical blank sailings, to the stem the bleeding in freight rates," said Mr Murphy, and Golden Week presents an opportunity to blank more sailings without angering cargo interests.

Sea-Intelligence data puts transpacific capacity reduction at 22 per cent-28 per cent in the weeks after golden week, higher than the 15 per cent-17 per cent reductions seen in pre-pandemic 2019 and 9 per cent-11 per cent in 2014-2018.

"We see higher numbers on Asia-North Europe as well, with the peak capacity reduction following Golden Week at a little under 20 per cent, which, while in line with 2019, is higher than the 2014-2018 average," said Mr Murphy.