Shipping companies are forgoing voyages and looking for incentives to call at ports as demand slacks

Shipping lines between Asia and northern Europe are coping with weak and erratic trade demand by canceling more sailings and offering some port calls as an incentive.

One airline said schedules on the route were “coordinated” to ensure niche demand peaks were covered.

He added: “We don’t want to lose part of the load just because our network is inflexible.”

MSC today announced its newbuilding for 15,000 TEU MSC Bianca Silvia, The aircraft operating on 2M’s Griffin/AE55 loop would not depart from Asia next week due to “declining demand” on the route.

Another 2M service from Asia in week 30, the 19,224 TEU MSC Mirja, Operating on the Lion/AE6 loop would make Le Havre an incentive call. And the 11,668 TEU MSC Ivana, Used on MSC’s standalone Swan loop and now needs an incentive to call at Felixstowe.

Carriers know they need to be more proactive in addressing shipper demands and must be prepared to adjust schedules accordingly, including providing incentives for port calls.

Meanwhile, freight rates from China to northern Europe are still under pressure as the market remains “oversupplied,” according to today’s Ningbo Containerized Freight Index (NCFI) commentary.

In fact, the most recent reading of Drewry’s Asia-Northern Europe component of WCI showed a 4% week-over-week drop in the average price to $1,291 per 40 feet, down 86% from a year ago.

Lines serving the Asia-Northern Europe route have all but given up on the traditional peak season this year, which will significantly impact their full-year earnings forecasts, forcing them to revise downwards.

In a survey of freight forwarders by the online platform Container xChange, the responses not only confirmed that business was slowing down, but also that “a prevailing mood of caution” prevailed.

Market researcher for July says: “The shipping industry enters the third quarter with continued price declines as negative market sentiment persists ahead of the unseen peak season.”

Of those surveyed, 65% acknowledged a slowdown in their business compared to the first quarter of the year, 19% said trade was flat, while surprisingly 16% said their business was actually up compared to the first quarter.

Nonetheless, trucking companies remain an optimistic type, with 64% of respondents saying they are “confident” their business will improve in the third quarter, albeit at a more muted level due to the lack of a peak season.

Container xChange concluded: “With the reduced purchasing power of consumers in the US and EU, demand will be significantly low compared to the last two years, but better than the two previous quarters in 2023.”

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