COVID-19: Impact of blank sailings starts kicking in

According to the weekly Port Economic Impact Barometer Reports by the International Association of Ports and Harbors and World Ports Sustainability Program (WPSP-IAPH) COVID19 Taskforce, the gradual impact of blank sailings by the world’s major container shipping alliances is beginning to be felt by ports.

The situation for container vessel calls shows a clear deterioration compared to the previous two weeks.  Only 41% of the respondents report a rather stable situation (vs.52% and 54% in weeks 15 and 16 respectively).  An elevated 42% of the ports experience moderate declines (minus 5% to 25%) in container vessel calls. Already 1 out of every 10 ports face significant decreases (in excess of a 25% drop), compared to less than 3% last week.

“We have begun to see a reduction in vessel calls with blank sailings on the main East-West trades” comments report co-author Professor Theo Notteboom.  “Nonetheless an interesting development we have observed from the responses is that some ocean carriers have replaced these cancellations by regional feeders with good frequency.  

“As a result, the reduced number of long-haul calls has been counterbalanced. There are also some cases in which a slight increase in containerized vessels has been reported with public demand for specific goods on the rise during the lock-down period.” 

The Task Force has also reported some of the larger container lines requesting quays to be used for cargo storage for those containers where shippers or forwarders have opted for suspension of transit (SOT), predominantly inbound cargo from Asia to Europe and the Americas.  Reports of transhipment hubs as well as main line ports having capacity available has alleviated some destination ports in terms of congestion.

For some ports, yard congestion is the result of laden imports of non-essential goods including new cars, which remain in port longer than usual.  When rules exist to only handle essential goods, the utilization of storage capacity within the ports has become critical.

Therefore, respective governments have now allowed the weekly release and acceptance of import/export of non-essential goods on average of three days a week, a move that has brought down storage utilization at some container yards by 60%.

“While on one hand container and general cargo storage area utilization has increased, the lockdown of major industries has led to serious underutilization of terminals and storage areas and warehousing for several other cargoes” comments co-author Professor Thanos Pallis.  

“These include black and white breakbulk cargoes, steel, heavy lift cargo and machinery.  Liquid bulk is still suffering from a non-favorable downward trend in market demand.  Nonetheless in some cases, storage tanks for liquid bulk are already full or rented, so no more tank storage is available.”

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