OCEAN carriers are preparing to blank around half their advertised sailings from Asia to North Europe and America after January 22 Chinese New Year, reports London's Loadstar.
High inventory levels in Europe and the US, coupled with uncertainty surrounding future consumer demand, has seen orders cancelled or postponed, resulting in Chinese factories preparing to shut down well ahead of the holiday.
For example, apparel marker Inditex said in its earnings call this week its inventory levels on October 31 were 27 per cent higher year on year, and 15 per cent higher on December 8.
In its latest North America market update, Maersk said this year "more shippers are opting to wait until the holiday period concludes, as stocks shipped earlier in 2022 are already in position to fulfil demand".
Meanwhile, after several consecutive weeks of double-digit falls, container spot market indices levelled off this week, suggesting the bottom may have been reached.
For example, on the transpacific, the Asia-US west coast component were all virtually unchanged on the week, with Xeneta's XSI recording an average rate of US$1,496 per FEU. While, for the east coast, Drewry's WCI edged down just one per cent, to $3,952 per FEU.
ONE chief executive Jeremy Nixon said he expected short-term rates would remain flat into 2023, and added: "I think we are effectively on the bottom of those spot market rates."
But he warned of a "big drop" in exports from Asia after the CNY holiday, and a "very soft" February and March. "Let's see whether demand starts to push back up around April/May time," he said.