Ocean carriers blank sailings as bookings drop

Ocean rejection rates spike as bookings fall

(Chart: SONAR Container Atlas)

Much of the focus the past several days has been on the drop in ocean bookings from China to the U.S., and with good reason. The SONAR Ocean Booking Volume Index from China to the U.S. is now down about 50% year over year, roughly in line with the reported average from ocean carriers and other data sources. A FreightWaves article published last week goes into detail.

(Chart: SONAR Container Atlas)

A related dataset that has moved sharply in recent days is the Ocean TEU Rejection Index from China to the U.S. It’s now up over 20%, which only has historical precedent during the early days of COVID and the rush surrounding major Chinese holidays. To mitigate the impact that falling demand will have on rates, carriers are employing a range of tactics including deploying smaller vessels, blanking sailings and suspending entire service loops (regular routings that call on a set sequence of ports). In fact, according to Flexport, ocean carriers are reducing capacity from China to the U.S. at a rate faster than the early days of COVID. Summer goods are already on shelves or in warehouses, but the sharp reduction in capacity presents risks to goods availability in the fall. Those strategies are helping to keep container rates relatively stable.