As ocean container volumes plummet, shippers are seeing a significant increase in blank sailings. Blank sailings can present a serious challenge to shippers, many of whom are already struggling to adapt to a transportation landscape rife with labor issues, volatile rates, and rising fuel costs. For shippers, blank sailings can lead to significant delays, higher operating costs, and, for manufacturers, high-stakes production issues.
As ocean shippers navigate a high-stakes transportation environment, many are turning to innovative solutions to mitigate the effects of blank sailings on their operations. In this article, we’ll examine how smart shippers are taking advantage of recent innovations in ocean container tracking to build resilience in the face of blank sailings.
What are Blank Sailings?
Also known as void sailings, blank sailing in shipping occurs when a carrier skips a scheduled stop on its route. For example, a carrier sailing from New York to Jeddah, Saudi Arabia, may schedule stops along the way at other ports. If, for some reason, the carrier decides to skip a port they’ve agreed to stop at, the missed port would be marked as “blank sailing.” The freight at the skipped port would now have to wait for another vessel, with room to spare, that is heading toward Jeddah. These waits range from hours to days, effectively freezing supply chains.
What’s Behind the Increase in Blank Sailing in Shipping?
During the supply chain turmoil of the COVID-19 pandemic, ocean carriers could not keep up with the capacity demands of a booming ocean freight market. While investments in capacity played a vital role in helping carriers navigate these pandemic-era volume booms, they’re now proving more of a hindrance than a help as container volumes plummet. In response, carriers are turning to blank sailings to adapt to the new realities of a low-volume ocean freight market.
In addition to a dynamic freight marketplace, blank sailings occur for several reasons.
Low Rates Lead to Blank Sailings
As volumes collapse, carriers use blank sailing to consolidate shipments and mitigate the worst effects of plummeting ocean freight rates. Increasingly, high-dollar shippers like major retailers are waiting for rates in vital sea lanes to fall below $1,000 before signing contracts with carriers, according to reporting from Bloomberg: “Several retailers and importers Bloomberg spoke with said they were holding off on signing contracts until the spot price — now closer to $1,000 from Asia to Southern California — is more in line with the long-term rates offered by carriers."
Facing Labor Issues at Port, Carriers Reroute Vessels
In addition to falling volumes and rates, labor issues at ports–such as those faced by British ports in 2022 and those which could occur on West Coast ports depending on ongoing negotiations–can lead to blank sailings. Labor issues at ports are often slow to resolve, leading nervous carriers to avoid ports affected by work stoppages rather than hoping for the best once a vessel reaches its berth.
Rather than Navigate Stormy Seas, Carriers Turn to Blank Sailing
In an increasingly volatile transportation market where every dollar counts, carriers are wary of the potential damage, freight loss, and slowdowns associated with operating amid volatile weather. Especially in tropical regions, where large storms often have a massive impact on supply chains and OTIF (on-time and in-full) rates, carriers may skip a port rather than steer into inclement weather.
For Shippers, Blank Sailings Come With a High Cost
While blank sailings may happen for many reasons, the effect on shippers is fairly consistent. The sudden disruption to supply chains can have a cascading effect, leading to problems far downstream from the point of exception.
Increased Likelihood of Demurrage and Detention
Blank sailing can happen quickly, leaving shippers scrambling to find reliable options for drayage and warehousing. If shippers cannot do so, they’ll likely face steep charges for demurrage and detention. According to Global Trade Magazine, these port fees are rising in recent years: “[...] there was a major spike in D&D charges in 2021, the global average increase was 39% for standard containers whereas the charges for 20 distribution centers doubled in 2021.”
Stock Issues Reverberate Through Supply Chain
For today’s consumers, speed is everything. A 2021 consumer survey conducted by Ware2Go revealed that 33% of consumers have higher expectations for shipping speeds since the onset of the pandemic, a statistic that has shippers scrambling to compete. Blank sailings, however, can lead to significant slowdowns in shipping speeds. Rather than miss shipping windows, blank sailing can lead shippers to resort to buffer stock. While this decision may meet demand in the moment, it may lead to reduced flexibility downstream, a hefty sacrifice in today’s volatile transportation landscape.
For Manufacturers, Blank Sailings Mean Production Slowdowns
While blank sailings might considerably impact shippers of CPGs (consumer packaged goods), these effects often pale in comparison to the cost of blank sailings for manufacturers. For manufacturers, blank sailings can lead to significant slowdowns in production, leaving them unable to produce goods to send to retailers and end-point customers. These slowdowns may take a long time to recover from, leaving manufacturers in an impossible position.
Facing the High Costs of Blank Sailings, Shippers Innovate to Adapt
It’s clear that blank sailings come with a high price for shippers. Yet despite the effect of blank sailings, industry leaders are signaling that blank sailings will continue to increase as long as volumes remain low, as revealed in a March 27 interview with Goetz Alebrand, Head of Ocean Freight for the Americas at DHL Shipping, in FreightWaves: “Blank sailings and slow steaming will be the levers for carriers to manage capacity according to demand,” said Alebrand, “If volumes are not picking up, we expect more of those.”
As blank sailings increase throughout the ocean transportation industry with little sign of slowing down, shippers are turning to innovative solutions to adapt to the new realities of ocean shipping. By improving reactivity, investing in visibility, and optimizing operations, shippers are using the latest supply chain innovations to push back against blank sailings.
Invest in Reaction Times
With carriers struggling to adapt to low volumes, blank sailings can happen quickly without much notice. This can leave shippers in the lurch, unable to move cargo from busy ports and putting themselves in the path of rising demurrage and detention charges. Shippers can get a jump-start on navigating blank sailings by improving reaction times.
However, shippers often struggle to gain the early insight they need to navigate unpredictable blank sailings. That’s why, as blank sailings rise, shippers are turning to ocean freight visibility to improve reactivity. Rolled cargo alerts ensure that shippers stay up-to-date with the latest blank sailing, giving them a vital headstart on finding alternative means of transportation and storage for high-value ocean freight.
Build Visibility to Navigate Volatile Markets
As volumes and rates continue to fall, shippers are turning to ocean freight visibility to navigate a volatile ocean freight market. Shippers can access their container locations in real time with ocean freight visibility. With real-time visibility over ocean container operations, shippers can quickly assess the severity of the disruptions caused by blank sailings. Once the situation is assessed, shippers can communicate real-time locations to supply chain partners for drayage and storage, helping to mitigate the steep costs associated with demurrage and detention.
Cloud-Based API Saves the Day
While reactivity and visibility are essential to navigating the rising tide of blank sailings in the ocean container transportation industry, these tech-enabled assets are only as useful as they are accessible. Siloed processes mean that shippers cannot use the advantages garnered by transportation innovations, leaving them unable to react quickly to blank sailing.
Using a cloud-based API (Application Programming Interface), shippers can access the advantages of ocean freight visibility through a streamlined portal, ensuring supply chains may still operate smoothly whenever and wherever blank sailings strike.
With Blank Sailings on the Rise, Smart Shippers Turn to OpenTrack for Resiliency Through Streamlined Visibility
Facing a challenging transportation environment, today’s shippers don’t have time to navigate the potentially disastrous effects of blank sailing. With OpenTrack, an industry-leading provider of ocean container visibility, shippers can rest easy knowing their supply chains are secured through streamlined ocean container tracking software. With OpenTrack, shippers can access a vital toolkit of ocean container software resources.
- Proprietary Rolled Cargo Alerts let shippers know when cargo is rolled, ensuring unparalleled reaction times when facing blank sailings.
- Intermodal Visibility means that shippers can access the end-to-end insights they need to resolve the consequences of blank sailings quickly.
- API & TMS Integration means that shippers never have to be stuck behind siloed software and can take full advantage of supply chain collaboration.
Book a demo with OpenTrack today, and see how Freight Visibility Made Simple can transform your ocean transportation operations.
