【Breaking News】The European Route will usher in a Large-scale of Liners Suspension & Reduction After US Route

【Breaking News】The European Route will usher in a Large-scale of Liners Suspension & Reduction After US Route

Due to the sharp drop in demand levels on global trade routes, the shipping companies are preparing to implement the harshest cuts to liners services since the pandemic began. As we learned, following the recent suspension and reduction of Trans-Pacific liners service, the three major alliances are considering suspending or merging some Asia-Nordic circle routes to mitigate the impact of the sudden drop in bookings, and to slow down the erosion of the sharp decline in freight.

According to the latest data published in current issue of Drewry, over the next 5 weeks (Week 37~41), 94 sailings were cancelled between Week 37 (Sep.15~18) and Week 41 (Oct.10~16) out of a total of 748 scheduled sailings on major routes such as Trans-Pacific, Trans-Atlantic, Asian-Nordic and Asian-Mediterranean routes, with the cancellation rate of 13%. According to the data of Drewry's current issue, during this period, 64% of all air traffic will take place on eastbound Trans-Pacific trade routes, 23% will occur on the Asia-Nordic and Mediterranean routes, and 13% on westbound Trans-Atlantic routes.

Over the next 5 weeks (Week 37~41), three major global shipping alliances have successively cancelled a total of 89 sailings. Among them, 2M Alliance cancelled the most sailings of 31, while the number for THE Alliance is 26.5, the least is Ocean Alliance, had 21.5 sailings cancelled.

The Drewry expressed, it is the speed of market change which can assure that, shipping lines will adjust their capacity more aggressively than previously anticipated. It is believed that carriers "will not sit idly by while instant freight fall". This consultancy said: "To maintain a profitable business, shipping companies will remove as many older and more polluting vessels from the market as quickly as possible. Ship breaking quantity next year is expected to be close to record level, comparing to almost zero in the container industry this year." The flood of orders for ships over the past two years "pushed the global order-to-fleet ratio from a low point of around 9% about two years ago to a high point of just under 30% at the end of September". 56% of the orders are delivered to the world's top five shipping companies through ownership or long-term charter contracts. 

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