What will be the impact of reduced export shipments?

Data from the supply chain platform shows that between Weeks 17 and 23, THE Alliance will cancel 33% of its scheduled Asia sailings, Ocean Alliance will cancel 37%, and 2M Alliance will cancel 39% of the first sailings.

The blank sailing strategy adopted by these alliances to mitigate the impact of the Covid-19 lockdown will further extend the lead times for cargo, especially to northern Europe.

Project44 said in the report that after the outbreak of the new crown epidemic in China in the first quarter of this year, shipping companies implemented a variety of mixed blank sailing strategies to maintain the integrity of the sailing schedule. The percentage of outages for the world's three largest container shipping alliances has fluctuated between 17% and 55% this year. Liner companies still use blank sailings to better control their capacity, achieve schedule integrity and ensure capacity is available in the right places.

Previously, blank sailings in the 2M alliance decreased, but now appear to be increasing, according to Project44. In the coming weeks, the 2M alliance will have more blank sailings than any other alliance. The average percentage of blank sailings in the 2M Alliance is expected to be 39% between Weeks 17 and 23 due to a drop in demand due to the lockdown in China. Ocean Alliance will have approximately 37% blank sailings and THE Alliance will have 33% blank sailings

Regarding port congestion, Project44's report shows that the stay time of import containers in Shanghai Port peaked at the end of April, while the stay time of export containers was relatively stable at about 3 days. It explained: "Excessive import stops are due to the inability of truck drivers to haul out containers in time. Likewise, fewer export shipments to ports mean fewer containers can be shipped out of Shanghai, reducing export dwell times."

However, Maersk issued an announcement yesterday saying that the density of the refrigerated cargo yard in Shanghai Port has gradually decreased, and it will restart accepting refrigerated container reservations in Shanghai. The first batch of goods received will arrive in Shanghai on June 26.

In addition, the congestion at the Port of Long Beach in Los Angeles has improved. According to the official website of the Port of Los Angeles, as of May 9, there were a total of 36 ships waiting to berth outside the two ports, and the average waiting time for ships outside the Port of Los Angeles was 2.6 days.

The Project44 report noted that improvements at ports in Southern California may not be sustainable, as upcoming labor contract negotiations could leave dockworkers short, reduce port efficiency, and ship longer queues during the summer. As some Chinese factories resume normal production, a large number of containers will be shipped to U.S. shores, which could further complicate problems in an already strained intermodal system.