{"id":4615,"date":"2020-09-16T16:41:55","date_gmt":"2020-09-16T16:41:55","guid":{"rendered":"https:\/\/siships.com\/?p=4615"},"modified":"2020-09-16T16:44:07","modified_gmt":"2020-09-16T16:44:07","slug":"ban-on-rate-increases-blank-sailings-for-us-china-trade-lanes","status":"publish","type":"post","link":"https:\/\/siships.com\/blog\/ban-on-rate-increases-blank-sailings-for-us-china-trade-lanes\/","title":{"rendered":"China\u2019s Ministry of Transport Considers Ban on Rate Increases, Blank Sailings for US-China Trade Lanes"},"content":{"rendered":"<h2>How China\u2019s Intervention May Affect Capacity and Rates for Ocean Freight Long-Term<\/h2>\n<p>As <a href=\"https:\/\/siships.com\/ocean-cargo-rates-peak-as-demand-surges\/\" target=\"_blank\" rel=\"noopener noreferrer\">ocean cargo rates<\/a> continue to surge, China\u2019s Ministry of Transport is taking steps to prevent any further increases. Last week, Chinese authorities discussed a possible ban on rate increases, which would apply to the GRI planned for mid-September. To boost capacity, they also suggested prohibiting the blanking of any sailings on the transpacific route, significantly impacting the ability of carriers to manage capacity and maintain a profit. Although nothing has been established as of yet, carriers and shippers alike should consider how this could impact their shipments.<\/p>\n<p><img loading=\"lazy\" class=\"alignright wp-image-4617\" src=\"http:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-1024x731.jpg\" alt=\"China Ocean Freight Rates and Cargo Capacity\" width=\"558\" height=\"398\" srcset=\"https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-1024x731.jpg 1024w, https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-300x214.jpg 300w, https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-768x549.jpg 768w, https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-1536x1097.jpg 1536w, https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-2048x1463.jpg 2048w, https:\/\/siships.com\/blog\/wp-content\/uploads\/2020\/09\/pexels-tom-fisk-3856433-1144x817.jpg 1144w\" sizes=\"(max-width: 558px) 100vw, 558px\" \/><\/p>\n<h3>Increasing Rates Through Q2<\/h3>\n<p>In spite of COVID-19, ocean freight carriers around the world are seeing a year-over-year increase in profit. In fact, demand has made Q2 2020 the most profitable second quarter for carriers since 2010, with a <a href=\"https:\/\/www.freightnews.co.za\/article\/carriers-record-highest-profitability-q2-2010\" target=\"_blank\" rel=\"noopener noreferrer\">total earned profit<\/a> of $2.7 billion.<\/p>\n<p>The <a href=\"https:\/\/www.freightos.com\/freight-resources\/coronavirus-updates\/\" target=\"_blank\" rel=\"noopener noreferrer\">China-US West Coast trade route<\/a> has seen a particularly high demand, seeing rates soar by 146% YOY, as compared to the 21% increase seen on Asia-Europe routes. Despite carriers reinstating the majority of blanked sailings, demand is still outpacing capacity and an additional GRI was scheduled for mid-September. This rate increase would have been blocked by China&#8217;s ban. While the state-owned China Ocean Shipping Company (COSCO) and OOCL canceled rate increases &#8211; and <a href=\"https:\/\/theloadstar.com\/maersk-first-to-cancel-gri-and-cut-transpacific-rates-as-china-wades-in\/\" target=\"_blank\" rel=\"noopener noreferrer\">Maersk<\/a> was rumored to follow suit with <a href=\"https:\/\/www.linkedin.com\/feed\/update\/urn:li:activity:6711472158629097472\/\" target=\"_blank\" rel=\"noopener noreferrer\">rate cuts<\/a> for both US west coast and east coast &#8211; most carriers have moved forward with a GRI. That said, the <a href=\"https:\/\/www.joc.com\/maritime-news\/container-lines\/carriers-pull-back-trans-pac-rate-hikes-after-chinese-ministry-comments_20200915.html\" target=\"_blank\" rel=\"noopener noreferrer\">rate increases<\/a> are lower than anticipated, suggesting China has had some influence.<\/p>\n<h3>Preventing Capacity Management<\/h3>\n<p>Adjusting capacity is crucial for freight companies to maintain revenue during times of flux. Although it\u2019s anticipated that <a href=\"https:\/\/www.joc.com\/maritime-news\/container-lines\/china-instructs-container-lines-stop-pushing-rates-reports_20200911.html\" target=\"_blank\" rel=\"noopener noreferrer\">spot rates<\/a> will unlikely to continue rising, thus making China\u2019s ban on rate increases trivial, preventing carriers from adjusting capacity could have a significant impact. As the market slows, the inability for carriers to adjust could prevent them from stemming losses. \u201cThis would have an unprecedented impact on the market and, more worryingly, potentially derail the carriers\u2019 ability to manage capacity in the face of extreme demand volatility,\u201d said Lars Jensen of <a href=\"https:\/\/www.seaintelligence-consulting.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">SeaIntelligence<\/a>.<\/p>\n<p>With so many factors impacting freight rates, it can be difficult to know if you\u2019re getting the best price. That\u2019s where SiShips comes in. Our software gives you instant access to auto quotes and custom quote options, allowing you to tap into our years of experience. That means less time spent worrying about your freight and more time to grow your margins.<\/p>\n<h4 style=\"text-align: center;\">To learn more about our software, <a href=\"https:\/\/siships.com\/contact\/\" target=\"_blank\" rel=\"noopener noreferrer\">contact us today<\/a>.<\/h4>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How China\u2019s Intervention May Affect Capacity and Rates for Ocean Freight Long-Term As ocean cargo rates continue to surge, China\u2019s Ministry of Transport is taking steps to prevent any further [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":4617,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[24],"tags":[121,58,123,37,118,90,91],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v18.5.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>China&#039;s Ban on Rate Increases, Blank Sailings - SiShips<\/title>\n<meta name=\"description\" content=\"China&#039;s Ministry of Transport is considering a ban on ocean freight rate increases and blank sailings on US-China routes.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/siships.com\/blog\/ban-on-rate-increases-blank-sailings-for-us-china-trade-lanes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China&#039;s Ban on Rate Increases, Blank Sailings - 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