Drewry: Only 24 Blank Sailings Over Next Five Weeks as Schedules Stabilise

The Analysis

Drewry's Cancelled Sailings Tracker came out on 26 June, and the headline number is one I had to read twice. Across the main East-West trades, over the next five weeks, the carriers will blank just twenty-four sailings. The cancellation rate is 3 per cent. Twenty-four sailings. Five weeks. Every big East-West lane added together. Three per cent.

I have priced this market long enough to know what 3 per cent means. It is not a calm number. It is the sound of the supply side deciding not to interfere. For three years a carrier could move the price by simply pulling a sailing off the water, and the tracker was the first thing every shipper opened, because a blank sailing schedule is a rate rise with a date stamped on it. This week that lever is sitting almost untouched.

And the price is still going up. The Drewry World Container Index rose 5 per cent on the week, to 4,166 dollars per 40-foot container. Near-full deployment on one side of the market, a rising index on the other. That is the tension I want to take apart, because it changes which of your instincts still work and which ones will quietly cost you money.

Start with the arithmetic, because the arithmetic is cheap and it tells you where to look. Twenty-four blankings against a 3 per cent cancellation rate implies the tracker is watching a base of roughly eight hundred sailings across the major East-West services over the next five weeks. Eight hundred over five weeks is about one hundred and sixty a week. That is the whole board. Now split it the way Drewry splits it: sixty-three per cent of the cancellations sit on the Transpacific eastbound, twenty-nine per cent on Asia-Europe and the Mediterranean, and the Transatlantic is largely untouched. Sixty-three per cent of twenty-four is fifteen. Twenty-nine per cent is seven. The Atlantic takes the remainder, which is not much. So the honest sentence is not "only twenty-four cancellations". The honest sentence is "fifteen cancellations, almost all of them stacked on the one lane where your peak-season cargo is trying to go". A global headline that says three per cent hides a lane-level number that says something else entirely.

A blank sailing is a capacity decision, not a weather event. When a carrier blanks a voyage it withdraws a fixed block of slots from a specific sailing on a specific date, and if demand holds, that removal is a rate rise with a timestamp on it. That is why every shipper's first instinct for three years has been to read the blank sailing tracker before reading anything else. It was the leading indicator. It still is. What has changed is the value of the reading.

Fifteen cancellations on the Transpacific eastbound, spread over five weeks, is roughly three a week on the busiest long-haul lane in the world. On a trade that runs that many sailings in a week, three is close to a rounding error. The carriers are running almost everything they own. Not out of generosity, and not out of confidence. They are running it because demand is strong enough that blanking a sailing now costs them money, and because they can see the same demand curve you can.

So the rate rise is not being manufactured on the supply side. That is the key deduction, and it is the one most people are getting wrong this week. The Drewry World Container Index rose 5 per cent on the week, to 4,166 dollars per 40-foot container, and with the cancellation lever barely touched, the only thing left to explain a 5 per cent week is demand. Drewry says it plainly: strong cargo demand and frontloading are still pushing rates up. Frontloading is the word to underline. Importers have been pulling goods forward, ahead of tariff dates, ahead of the peak, ahead of a holiday, and that pulled-forward cargo does not behave like normal cargo.

It arrives in a lump. It books late. It pays spot. It does not care what the index did last month, because the goods have to move now. On the peak-season stocking rhythm, Grace Yang on the buying side reads it better than I do, and her point is that a pull-forward is a decision made at a desk twelve weeks before the container is ever booked. By the time it reaches my end of the chain, the decision is already made, and the only question left on the table is price. That is worth sitting with, because it means the frontloading you are competing with was committed long before you saw the index move.

There is a practical consequence that most shippers underrate, and it is about the shape of your book rather than the price of a single box. In a normal year the split between long-term contract and spot is a procurement habit, set once and left alone: sixty per cent contracted, forty per cent spot, or seventy-thirty, whichever finance signed off on. That split is a policy. It is not a reading of the market, and this is the week the two part company.

A 3 per cent cancellation rate, a 5 per cent weekly index move, and a lane where the cancellations actually land is a specific market state, and it argues for shrinking the spot share now and buying it back later, not for holding January's ratio because it is on the page. The cost of being wrong in the covered direction is small: you sit on the contract rate while spot falls, and you lose the difference. The cost of being wrong in the exposed direction is not symmetrical at all: spot rises, your cargo still has to move, and you pay whatever the market prints that week with no ceiling above you. That asymmetry is the entire argument for coverage. I have watched shippers spend months arguing over a two per cent contract premium and then eat an eight per cent spot move in a single week, and I have never once seen the two per cents win that trade.

There is a second supply-side detail worth flagging, and it cuts both ways. Schedule reliability is improving, and the Strait of Hormuz is gradually reopening. Read that carefully. Gradual is the operative word. A shipping lane does not reopen like a door, it reopens like a queue, one transit at a time, and the pace depends on insurance, on war-risk premiums, and on crews being willing to sail. If the Hormuz restoration continues, it adds routing options on the Middle East lanes and a little effective capacity, and it takes some of the premium out of the fear trade. What it does not do is add a single slice of capacity to the Transpacific eastbound, which is where fifteen of the twenty-four cancellations live. This is the trap in reading a global headline: the relief and the pain are on different lanes, and the average of the two tells you nothing useful about either.

Before I move on, let me say what would change my mind, because a number is only useful if you know what would make it stop being true. Four things turn this picture. The first is a tracker release showing the cancellation rate back above, say, 8 or 9 per cent, which is the level that says the carriers have decided to manage supply again; the moment that prints, the whole deduction flips and waiting becomes a strategy rather than a way to lose money slowly. The second is a visible drop in the frontloading, which shows up first as softening spot on the Transpacific eastbound and only later in the index, so watch the lane before you watch the average.

The third is a Hormuz reopening that accelerates from gradual to sudden, which would swing the Middle East lanes hard and leave the Transpacific untouched, widening the gap rather than closing it. The fourth is a tariff or holiday date moving, because a moved deadline un-pulls-forward a whole block of cargo in a single announcement and the index does not see it coming. Three of those four are downside risks to the rate and one is a rate risk, and that is the shape of the risk in front of you. It is exactly why I anchor on a threshold rather than a forecast.

What all of this means for you is narrow and specific. The old playbook was this: see a rate spike, wait for the carriers to blink, because the carriers always blinked. Blank sailings were how they blinked, and a shipper who could hold space for two weeks could usually wait one out. That playbook is dead this cycle, for one reason. When the supply side is running 97 per cent of its sailings and the price is still climbing, there is nothing to wait for. The carriers are not holding capacity back to squeeze you; they are deploying nearly everything they have and the market is still tight. Waiting does not put you in a stronger position. It just puts you on the wrong side of the next weekly print. Your only real variable in this market is the length and the coverage of the contract you sign, and how early you book the space under it. Everything else is the market talking to itself.

Let me put numbers on it, and I will be explicit about which numbers are real and which are mine. Real: 24 blank sailings, a 3 per cent cancellation rate, the 63/29 split, and 4,166 dollars per 40-foot container, up 5 per cent on the week. Assumption one, and I am labelling it: your own blended Asia-to-US-East-Coast and Asia-to-North-Europe book prices within about 10 per cent of the index, so call your average 4,166 dollars per 40-foot container, which the trade writes as FEU. Assumption two: you move 160 FEU a month, which is 40 FEU a week.

One 5 per cent weekly print on 4,166 is 208 dollars per FEU. Now the scenario, and I am pricing a sensitivity, not making a forecast. Suppose you leave a third of your weekly volume, call it 13 FEU, on the spot market, and the index keeps printing 5 per cent a week for three weeks running. Three weeks of 5 per cent compounding is a factor of 1.158, which turns 4,166 into about 4,824 dollars per FEU, a move of 658 dollars. On 13 FEU a week, for three weeks, that is 39 FEU times 658, or roughly 25,700 dollars you did not budget for.

Flip it. If you had locked that third at today's number, the move would have cost you nothing, and if the index had fallen instead, you would have overpaid. That is the whole trade. You are not betting on direction; you are deciding how much of a rising market you are willing to insure, and at what price you stop arguing about it.

Run the mirror image, because a one-sided example is not an argument. Same book, same 160 FEU a month, same assumption that a third sits on spot. Now suppose the frontloading exhausts itself and the index gives back 5 per cent a week for three weeks, which is precisely the move that would follow a cancelled pull-forward. The factor is 0.857, and 4,166 falls to about 3,570 dollars per FEU, a drop of 596 dollars. On the exposed 39 FEU, you would have saved about 23,200 dollars by not locking. So the decision is genuinely two-sided, and anyone telling you this market is a one-way bet is selling something.

What makes it lopsided in practice is probability and pain, not certainty. The move up has demand behind it that we can already read in the tracker; the move down needs that demand to stop, and nobody can put a date on that. And the pain is asymmetric: a missed saving is a line in a variance report, a missed coverage is margin that is simply gone, with no line and no report. I will take the odds that already exist on the table over the ones I have to hope for.

Here is where I put the trigger, and it is a threshold, not a feeling. The index prints weekly. My line is 4,375 dollars per FEU, which is simply 4,166 plus one more week at the pace we just saw. If the next print clears 4,375, and the print after that does not fall back, I stop debating and lock 60 to 70 per cent of my next thirty days. Not all of it. I want some volume exposed, because if the frontloading exhausts itself the way it eventually must, spot will fall faster than contract, and I want to be able to catch that.

But 60 to 70 per cent covered is the difference between running a business and gambling in one. Under that threshold, I stay on the spot side, and I keep my space bookings three weeks out instead of two, because with only about three blanks a week on the Transpacific eastbound the problem is not price alone, it is getting a slot at all. Space on a near-full deployment is the scarce thing. The rate is just what that scarcity costs. There is a practical consequence: a booking made three weeks out at a slightly worse rate is usually cheaper than a booking made two weeks out at no rate, because a rolled cargo is a missed sailing and a missed sailing is a week of your schedule gone.

A few alternatives, and what each one costs. If your cargo can physically reach Europe or the Mediterranean, you are on the Asia-Europe lane, where only seven of the twenty-four cancellations fall, and you can sometimes re-route through a Mediterranean gateway and feed onward by rail or truck. That works until the inland leg eats the saving, which on a tight delivery window it usually does. If you are on the Transatlantic, you are largely untouched by any of this, and if you have any flexibility to move a product line onto an Atlantic routing, this is the week the relative cost favours it, by simple subtraction.

If you cannot move the lane, you move the timing: ship a week early and pay storage instead of paying a rate rise, which is only rational if storage is cheaper than the premium, and this week it probably is. The pitfalls are boring, and they are exactly where the money leaks. Watch the FAK expiry on any spot quote, because a quotation is a perishable good and an expired FAK is not a price you can hold. Watch the PSS window, because a peak-season surcharge that lands on the first of the month can be booked around if you move the sailing forward by days rather than weeks.

Watch free time at destination, because a cheap freight rate with three days of free time is not cheap once the container sits, and demurrage is where cheap freight goes to die. And watch the one structural risk in this whole picture: the 3 per cent number is a five-week snapshot, not a law. If frontloading stops, if a tariff date moves, if demand blinks, twenty-four cancellations can become sixty in a single tracker release, and the carriers will not send you a note beforehand. The number that makes this week comfortable is the same number that can turn on you first.

One more operational point, because it is the one people skip. With space this tight on the Transpacific eastbound, the quality of your booking matters as much as its price. A booking that carries a firm slot number and a named vessel is worth more than a booking ten dollars cheaper that is sitting on a roll list, because in a week with almost no blank sailings the risk is not that your sailing gets cancelled, it is that your cargo gets left behind for a sailing that is already full. Ask for the vessel name and the slot confirmation, in writing, on every booking you place for the next thirty days.

If a forwarder cannot give you a vessel name, you do not have a booking, you have a hope, and this is not the month to freight a hope. The same discipline applies to the transhipment legs if your routing uses them: a cheap main leg with an unconfirmed feeder connection is a demurrage bill you have not met yet, and it will arrive on a date you did not choose.

So, a 3 per cent cancellation rate. In this industry that is the carriers saying, politely: not us this time. I have spent a career reading these numbers, and the weeks that worry me most are never the ones where the carriers are the problem. They are the ones where the carriers are on their best behaviour, running nearly every sailing they own, and the price still climbs. When the supply side is behaving and the index is up 5 per cent anyway, the thing moving the number is you. Which is a strange way to end a freight note, but the tracker does not lie. Three per cent of the sailings are blank. One hundred per cent of the reason the index moved is demand. We can argue about next week. The arithmetic will not.

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— By Vivian Zhao