Carriers have yet to announce any meaningful capacity reductions ahead of China’s Golden Week, according to a recent analysis by Danish maritime data analysis firm Sea-Intelligence.

Golden Week is a week-long national holiday in China, so Chinese factories will be closed. As importers rush to ship goods from China to the US before the holiday's closures, there is usually increased demand for air cargo services, but capacity will be tight, and prices will be high for both ocean freight and airfreight.

“We are now 5 weeks away from the Chinese National Holiday known as Golden Week, and with a resulting sharp drop-off in demand, carriers resort to blank sailings to manage supply,” commented Alan Murphy, CEO, Sea-Intelligence.

“This year however, the carriers have so far not announced any significant capacity reductions,” he added.

Looking at the current combined Transpacific capacity reductions for the 4-week Golden Week period — counted as Golden Week plus the following 3 weeks — Sea-Intelligence noted that carriers have scheduled capacity reduction of only 3.0%, compared to a 12.4% reduction in 2019, and the 2017-2019 average of 10.0%.

Murphy noted that looking at it individually, 3.7% is scheduled to be taken out on Asia-North America West Coast and 2.2% on Asia-North America East Coast and both figures are the lowest when compared to the pre-pandemic years.

“If we are to compare the current percentage reductions and bring them to the pre-pandemic levels, then to match 2019, 10-13 additional sailings will need to blanked on Transpacific and 6-10 additional sailings on Asia-Europe,” the Sea-Intelligence chief said.

“With Golden Week only 5 weeks away, there is not much time left, if carriers want to announce more blank sailings, because the closer they do it to Golden Week, the less time there is for shippers to plan exception handling, and there is already a lot of discontent among the shippers due to the freight rates and lack of promised vessel allocation in the past couple of years,” he added.

Additionally, Sea Intelligence noted that with “tepid peak season demand,” it could be argued that the blank sailings needed to keep the market stable would have to exceed what was done in 2017-2019, placing further pressure on the blank sailings strategy for the carriers in October 2023.