Involuntary Blank Sailings Causing Problems for Shippers

We have now entered the period of the Lunar New Year holiday when Chinese manufacturing slows down and China’s citizens undertake what has, until the past two years, been recognized as the largest human migration as people return to their home cities and villages to celebrate.

The typical New Year pattern

Until the pandemic struck last year, China’s factories would close, China Customs would not process cargo for export, and for the time of the holiday and several weeks thereafter, carriers would voluntarily reduce capacity through a process known as “blanking” sailings, or deliberately canceling a vessel’s scheduled port call.

Lunar New Year: 2020

In 2020, carriers blanked hundreds of sailings after the traditional Lunar New Year period because of the delayed reopening of factories as China imposed strict travel restrictions that prohibited hundreds of millions from returning from holiday travel and resuming work. These delayed reopenings were telling for their impact on operations in the ports of Los Angeles and Long Beach with both off double-digit percentages from prior year periods.

Lunar New Year: 2021

As we approach February 12th – New Year’s Day – a different, even worse cause of blank sailings is affecting shippers on the transpacific.

This image is from Marine Traffic, a website that monitors AIS data from ships at sea and was taken on Tuesday afternoon, February 2nd. Each of those green dots represents a ship at anchor waiting to get into a berth to unload. Some of those vessels have been at anchor for upwards of a week.

Because of the backlogs caused by congestion and now concerns over a spreading of COVID among ILWU longshore labor, operations have been slowed. The FMC has stepped in, sending a letter to President Biden seeking prioritization of vaccines for dockworkers. Vessels are missing their slots to return to Asia and depart with more profitable eastbound cargo. Finished goods are backing up in warehouses because of a scarcity of containers to load for export.

As reported in The Loadstar and evident to any shipper with cargo trapped somewhere in their supply chain, schedule reliability has fallen to the lowest levels since record-keeping began. 

What can shippers do?

At this point, we are counseling our shipper’s patience, prioritization, and planning. Patience because there is nothing within our power to force ships at anchor into berths. Prioritization to understand that these conditions will persist for months and that the most critical cargo should be moved first and, if in high demand or at risk of being too late, shipped by air. Finally, planning – can cargo be moved all-water via the Suez Canal or to the east coast instead of a west coast port? Can sea-air via the Middle East be a viable option? Does a shipment require diversion, unloading at the first port of arrival, transloading, and movement to the final destination by truck instead?

Sobel Network Shipping Co., Inc. can be your partner in these challenging times to offer solutions to remediate the challenges being created by congestion and out-of-place carrier and rail equipment. Contact Sobel today to learn how we can help you.