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Suspension of Transit
The speed at which the shipping lines are announcing new blanked sailings is challenging, but what has grabbed our attention, is the new program just unveiled by MSC, which they are calling ‘Suspension of Transit’ (SOT)
This week has seen an acceleration of cancelled sailings on the Asia-North Europe tradelane caused by increasing reductions in demand.
As we reported on Tuesday. Last week there were just two blanked sailings, by Monday the number had increased to 45, with MSC and Maersk cancelling 21% of Asia-Europe capacity in Q2, with the Ocean Alliance’s CMA CGM announcing a further 11 blanked sailings and we would expect THE Alliance to follow suit imminently.
There are four important lessons to take immediate note of.1. The speed with which demand is dropping is driving these sharp volume adjustments.
2. It is unrealistic to assume that only 2M and the Ocean Alliance are subject to this decline.
3. Demand will fall in North America as well as elsewhere shortly.
4. Congestion will build at terminals as uncollected containers disrupt operations
Among this turmoil it is gratifying to see the pro-active response of MSC and their Suspension of Transit initiative.
Containers shipped from Asian origins with MSC can be placed in yard storage in six main transshipment ports, during transit, instead of being moved onwards to their destination.
This intervention avoids congestion at destination locations where onwards transport is becoming problematic – either due to operational issues, or the importers not having the ability to take delivery.