Corona update website

Keeping supply chains efficient during COVID-19

4 May 2020

A third wave of blank sailings has been announced recently by the 2M, Ocean Alliance and THE alliances. The current capacity reduction, in particular on the Far East-Europe trade, varies between 20% and 37%, depending on the alliance. Apart from blank sailings, lockdowns have also had an impact on the trades to and from South Africa and India/Pakistan, showing that the pandemic has a wider impact than just the main east-west trades. Recorded sailings, blanked as a result of the corona virus pandemic, now stand at 456, of which 342 were on the main deepsea trade lanes.

The effects of blank sailings and lockdowns has a delayed impact on European export (backhaul) business of around 5 weeks and have therefore been relatively limited in April. However, more serious impacts on the supply chain are expected in the coming months. Due to blank sailings, maritime logistics supply chains are becoming more and more unreliable. Accordingly, current blank sailings resulting from this are harmful to European logistics and shippers, because it reduces supply chain efficiency and parameters such as capacity, sailing frequency, transit times, ports of call and associated service quality.

The question remains whether this could have been avoided and what has caused this disruption. There is no denial that volumes have decreased. However, the higher economies of scale associated with mega-ships mean that fewer ships can operate in a market of a given size. There is a strong feeling among freight forwarders that market consolidation and the introduction of ultra large vessels is particularly disruptive to supply chains in today’s crisis.

In view of business, shops and manufacturing being closed, freight forwarders, terminal operators and carriers are seeking storage in warehouses, depots at the terminal and in the hinterland. CLECAT has continued to call on carriers and terminals to exercise restraint in their demurrage and detention charging practices.

Source: CLECAT