Chinese New Year is one of the largest externalities impacting the global maritime industry each year.
According to the World Trade Organization, China is the largest exporter of goods in the world, and its top trading partner is the United States. Several North European countries are also top 15 trading partners with China, including Germany, the Netherlands and the United Kingdom. Due to this trade relationship, North America and North Europe are the most impacted regions by Chinese New Year.
Chinese New Year began on Feb. 5 this year. However, the start of Chinese New Year varies each calendar year, falling on Jan. 28 in 2017 and Feb. 16 in 2018, and it will fall on Jan. 25 next year. As a result of Chinese New Year, factories and businesses across China tend to shut down in order to celebrate, which leads to blanked sailings and fewer goods being shipped in the weeks following the start of the holiday.
The chart below, which was built using data from BlueWater Reporting’s Blanked Sailings Report, illustrates withdrawn capacity on the China to North Europe and China to North America (U.S. and Canada) trades as a result of the 2019 Chinese New Year. The China to North America trade had 38 blanked sailings as a result of Chinese New Year, which accounted for 356,243 TEUs of vessel capacity withdrawn. The China to North Europe trade lane had 12 blanked sailings from Chinese New Year, which accounted for 195,551 TEUs of vessel capacity withdrawn.
Blanked sailings also inversely impact trade on the backhaul from North America and North Europe to China. While blanked sailings from China to North America and North Europe typically occurred between Feb. 3 and Feb. 24 this year because of the holiday, blanked sailings on the backhaul now are starting to be felt.
The chart below, which also was built using BlueWater Reporting’s Blanked Sailing report, shows that as a result of Chinese New Year, 343,686 TEUs of capacity are expected to be withdrawn on the North America to China trade lane, while 176,665 TEUs are expected to be withdrawn on the North Europe to China trade lane.
Using data from the past, forecasts can be generated for how capacity withdrawn will increase or decrease during Chinese New Year in the future.
The chart below, built using BlueWater Reporting’s Blanked Sailings Report, shows how withdrawn capacity on the China to North America and North Europe trades as a result of Chinese New Year has increased each year from 2017 to 2019. On the China to North America trade, vessel capacity withdrawn increased from 113,073 TEUs in 2017 to 215,344 TEUs in 2018 and 356,243 TEUs in 2019. On the China to North Europe trade, vessel capacity withdrawn increased from 125,631 TEUs in 2017 to 137,748 TEUs in 2018 and 195,551 TEUs in 2019.
BlueWater Reporting’s Blanked Sailings Report also shows an increase in withdrawn capacity from Chinese New Year on the backhaul trades from North America and North Europe to China each year from 2017 to 2019, as illustrated in the chart below. Withdrawn capacity on the North America to China trade increased from 111,006 TEUs in 2017 to 202,339 TEUs in 2018 and 343,686 TEUs in 2019. The North Europe to China trade saw withdrawn vessel capacity increase from 112,376 TEUs in 2017 to 140,248 TEUs in 2018 and 176,665 TEUs in 2019.
Data from Chinese New Year shows how vessel capacity withdrawn correlates with overall capacity on these two trade lanes. As overall capacity increases, blanked sailings will result in more capacity being taken off the trade route.
In the future, as vessels continue to get bigger and trade lanes continue to expand capacity, blanked sailings for Chinese New Year will have a larger impact. If the Chinese export economy continues to grow, more trade lanes internationally will experience reduced capacity by Chinese New Year.