Alliances Reinstall Capacity In Transpacific Routes

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The three most important alliances in container shipping have commited to reinstate Blank sailings on the trans-Pacific routes next month,  those were initially set  in response to a low demand for container ocean freight due to of the coronavirus.

Citing a strong growth in demand, the 2M alliance (Maersk and MSC) as well as COSCO and OOCL in the Ocean Alliance have informed their clients of the reestablishment of some of the sails that they had blanked on the trans-Pacific routes. Likewise, THE Alliance member Hapag-Lloyd will bring all but five of his blank sails back to the US West Coast next month.

Maersk sent a statement informing that it would reestablish the eastbound trans-Pacific services that had  left blank  in the second quarter due to the pandemic. They also plan for the Chinese Golden Week holidays a smaller amount of blank sails than previous years in anticipation for strong volumes of imports to the US through November.

The company highlights in its statement that this high season is defined by a series of variables that each component of the supply chain must solve to guarantee a cargo flow without bottlenecks on these routes.

For example, they mention the importance of good planning between port terminals and shipping companies in order to quickly remove import containers from the yards, avoiding congestion inside the terminal, in addition to the rapid return of empty units to ship them back  to Asia.

Another factor is the high dependence of US west coast ports on railroads, although operators are operating apace in ports such as Prince Rupert and Vancouver / Centerm are receiving large volumes now, a flow that was affected last week when the CN operator had a derailment of an agricultural train, which caused a three-day interruption on the tracks affecting the rail movements of Vancouver.

Variables such as labor shortages in ports due to social distancing and the fact that some truckers parked their vehicles and returned to their countries of origin due to the pandemic are also taken into account.

On the other hand, Splash247  reports record spot rates observed in the trans-Pacific to the west coast in recent weeks, which have risen to $ 4,000 per container, have caused alarm in China, South Korea and the United States.

The Shanghai Containerized Cargo Index (SCFI) reported on Friday that rates rose again this week to $ 3,867 per feu.

Due to this increase in freight rates, Beijing has intervened for 10 days demanding that carriers add more capacity on the trade route and alleviate price increases. Likewise, the Federal Maritime Commission (FMC) in Washington also met last week to analyze the issue.

See -Chinese Authorities Could Interfere With Prices And Capacity On Pacific Routes-

Some analysts are not sure that shipping companies can handle  a possible drop in demand again with blank trips this year, rather they believe that if it happens, shipping companies this time would opt for a price war on rates.

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