Impact to a customer when a sailing is blanked

The consequence and impact of a blank sailing vary depending on where the cargo is when the blank sailing happens.

A container that has not yet been collected for packing creates a different problem from one that has already been packed and sitting in a terminal or a transhipment port..

In either case, the first and foremost issue is the securing of space on either another carrier or the next ship of the current carrier to ensure the goods reach their destination..

In many cases, these jobs are not done by the BCO themselves, but by freight forwarders..

Noushin Shamsili, President & CEO of Houston-based NUCO Logistics, describes exactly this problem from the forwarder’s side..

“When a sailing is cancelled, we have to rework the bookings, find alternative space and schedules, and most importantly, keep our customers informed so they can adjust their plans..”

The alternatives are not always and automatically available, as cargo that is removed from one sailing needs to be added to another sailing on the same route/rotation, which may already be overbooked..

This means the customer has to accept a later sailing (sometimes a few ships apart), maybe a different, more expensive, and longer routing..

This is where advance notice becomes extremely important.. Shamsili says that early visibility of planned blank sailings and advance information from carriers helps to a certain extent in planning for their customers’ shipments..

The advance visibility allows forwarders and shippers to find alternatives BEFORE it reaches a point where the options are smaller, and costs are higher..

Where does the real cost of a blank sailing appear

Dheshree Chetty, MD of Women in Shipping & Transport Services in South Africa, adds a different perspective to the discussion, and that relates to cash flow and inventory planning, which many importers understand very well..

“Looking only at ocean freight and its impact misses much of the commercial impact,” says Chetty..

“Most importers adjust cash flow to facilitate just-in-time delivery.. This means by the time they expect their shipments to arrive there is no stock or limited stock on the ground,” adds Chetty..

When stock arrives late due to blank sailings, an importer potentially runs short of inventory, which naturally leads to loss of business and/or the customer itself..

“If the customer is a manufacturer, the problem goes further because an imported raw material, component or piece of equipment may be tied to a production requirement rather than just stock replenishment,” added Chetty..

Then there is the issue of cargo arriving late and cargo arriving later than an event like Christmas, a trade fair, an exhibition etc.. The importer has already paid for the stock, and when cargo is delayed due to blank sailings, the commercial usefulness of the cargo has changed dramatically, and the goods may be much harder to sell..

The same principle applies to promotional stock, fashion, project cargo, production components, and cargo linked to a customer’s delivery commitment.. A delay measured by the carrier in days can be measured by the cargo owner in lost sales, missed production, contractual problems, or working capital sitting inside a container..

Chetty also points to cargo sitting at transhipment ports potentially attracting additional charges like additional tariffs or contractual disputes etc..

Are blank sailings simply a carrier capacity-management tool..??

Customers certainly ask this question, and as per Noushin Shamsili, it is certainly a view that customers hold..

“In a recent meeting with chemical distributors, there was a widely shared view that ocean carriers use blank sailings as a way to manage capacity and support freight rates,” said Shamsili..

While market reports confirm that carriers ARE using blank sailings as a capacity-management mechanism, it does not establish that every individual cancellation has been made to support freight rates..

“In my over 25 years in international shipping and freight forwarding, I’ve seen blank sailings happen for many different reasons, so I think we need to look at them from a broader global perspective. Capacity management may certainly be one factor, but sailings can also be cancelled or ports skipped because of weather, port congestion, geopolitical events, operational issues, or force majeure,” added Shamsili..

What is the solution..??

Communication matters, almost as much as the cancellation itself.. The earlier the shipper, forwarder, consignee, trucker, warehouse, and production or sales teams know about the change, the more options they have to adjust inventory, bookings, delivery commitments, and inland arrangements..

A blank sailing begins as a change to a carrier’s vessel schedule.. By the time that change works its way through the customer’s supply chain, it can become an inventory, cash-flow, production, transport, warehousing, and sales problem..

Better communication with carriers, forwarders, and the market is key..

My Take

I have dealt with blank sailings from the operational side for many years, and the discussion too often stops with the revised ETA.. For the customer, that is only the beginning.. Where is my container..?? What is the next confirmed option..?? Will I incur additional costs..?? What happens to my delivery commitment..?? And what happens further down the chain..?? The real effect of a blank sailing runs through inventory, cash flow, production, transport, warehousing, and eventually to the customer waiting for the goods..

Article FAQ

What happens to my container when a sailing is blanked..??

That depends on where the container is when the sailing is cancelled.. The carrier or freight forwarder may roll it to a later sailing, move it through another service or routing, or hold it until space becomes available.. The first questions should therefore be: where is the container now, and what is the next confirmed movement..??

Why do blank sailings cost customers money..??

A late container can leave an importer short of stock, delay production or sales, tie up working capital, and disrupt transport and warehouse bookings.. Cargo held at a terminal or transshipment port may also attract charges, depending on the contract, tariff, available free time, and exactly where the container is being held..

How can shippers reduce the impact of blank sailings..??

Watch carrier schedules and blank-sailing announcements before the cargo moves, especially for shipments tied to production, promotions, seasonal demand, or firm customer deliveries.. If a sailing is cancelled, establish where the container is, the next confirmed sailing, the revised arrival date, any additional charges, and which downstream arrangements now need to change..

Critical Note: Are all blank sailings used to manage freight rates..??

No.. Carriers do use blank sailings to manage available capacity, but sailings are also cancelled because of congestion, weather, vessel delays, network recovery, geopolitical events, and operational problems.. So the reason behind a particular blank sailing matters, especially when trying to understand whether it was a planned capacity decision or the consequence of an operational disruption..