2M alliance announces blank sailings of 21% on Asia-Europe trade. MSC is implementing a blank sailing programme to help it better manage capacity as the industry deals with changing market demands amid the evolving COVID-19 pandemic.

Shipping supply chains across the world have undergone a review under the circumstances of customer demands in the wake of the 2020 coronavirus pandemic. Image credit: Supply Chain Drive

Shipping supply chains across the world have undergone a review under the circumstances of customer demands in the wake of the 2020 coronavirus pandemic. Image credit: Supply Chain Drive

2M is an alliance between Maersk and MSC that includes partnerships with other carriers.

The carrier is starting with the cancellation of two sailings that were serving routes between China and Europe or the Mediterranean. Other blank sailings could be announced in coming weeks depending on requirements the company announced.

MSC’s decision came the same week Maersk announced it was cancelling multiple trips. The capacity reduction by these 2M members alone is equivalent to approximately a 21% capacity reduction in [Asia-Europe] trade, Sea-Intelligence Shipping Analyst Imaad Asad said in a press release to media.

Blank sailings peaked earlier this year as a result of factories in China being shut down by the coronavirus outbreak, but with factories now beginning to restart production, the new batch of ship cancellations is due more to the drop in consumer spending in other countries that is leading retailers to cancel orders.

With consumers not spending money at shuttered retail locations, retailers are cancelling orders with suppliers. Many of those suppliers are shuttering as a result and ocean carriers are blanking sailings to keep supply in line with demand.

There have been 45 blank sailings along the main deep-sea trades that can be attributed to the decline in demand, according to Sea-Intelligence. 2M was especially active as they made a full temporary withdrawal of the AE2/Swan and AE20/Dragon services on the Asia-Europe trade for all of 2020-Q2. “Albeit with the caveat that if demand picks up earlier than expected they might also resume service earlier,” Asad said.

Asad said the short notice for seasonal blank sailings reflects a decline in customer booking activity. It should therefore be expected that this week will see a further rapid escalation in the amount of blank sailings both by other carriers as well as in other trade lanes.

Another challenge for carriers will be ensuring their crew, sequestered at sea, don’t become infected with the coronavirus. Multiple members of one Maersk ship tested positive, according to Lloyd’s List reported in the first week of April 2020.

“Given the high uncertainty in the world-markets, no-one knows exactly how long this will last and hence the new arrangements will all have to be decided on an ad-hoc basis,” Asad said.