BLANK SAILINGS: WHAT THEY MEAN FOR YOUR SUPPLY CHAIN AND HOW TO ADAPT

In the intricate world of global logistics, certain terms and phenomena can significantly impact businesses. "Blank sailings" is one such term that has garnered attention in recent years. As a leader in the freight forwarding industry, Kerry Logistics Oceania is committed to helping our partners understand these complexities and navigate them effectively.

What are Blank Sailings?

Blank sailings refer to scheduled voyages that are canceled by carriers. Instead of a ship departing and arriving as planned, it remains docked or changes its route. This phenomenon is not just a simple cancellation; it represents a ripple effect that can disrupt the entire supply chain, especially for industries heavily reliant on timely deliveries.

Reasons Behind Blank Sailings

Blank sailings are not arbitrary decisions made by carriers; they are strategic responses to various factors:

• Operational Reasons: Vessels, like any other machinery, require maintenance. Sometimes, unforeseen issues might necessitate immediate repairs or repositioning, leading to blank sailings.

• Market Demand Fluctuations: Carriers operate to maximize their profitability. If there's insufficient demand for space on a vessel, the shipping line might cancel the entire voyage.

• Port Congestion: High traffic at ports can lead to significant delays. To maintain their schedules, carriers might opt to skip congested ports.

• Mechanical Problems: Vessels can encounter mechanical issues that might require emergency repairs.

• Labour Unrest or Port Strikes: Strikes and labor unrest can halt operations at ports.

• Bad Weather: Safety is paramount. Adverse weather conditions might necessitate changes in sailing schedules.

• Pricing Control: Blank sailings can be a strategic move by ocean carriers to control pricing for routes.

• Peak Season Dynamics: During peak seasons, the demand for shipping space surges. Carriers might announce blank sailings to manage this demand and optimize their operations.

Understanding these reasons underscores the importance of being prepared for the eventuality of blank sailings. They are a tool for carriers, a way to leverage control over pricing and capacity, often beyond the control of customers and service partners.

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Impact of Blank Sailings on Businesses

The repercussions of blank sailings are multifaceted and can be profound:

• Delays in Shipments: This is the most immediate impact. Goods don't arrive on time, leading to stockouts, missed sales opportunities, and potential contract penalties.
• Increased Freight Costs: With reduced capacity, demand for available slots increases, leading to a surge in freight rates. This can strain the financial resources of businesses.
• Planning Challenges: Predictability is crucial for supply chain efficiency. Blank sailings introduce uncertainty, making it challenging for businesses to plan their inventory and sales strategies.

Example: Repercussions of a Blank Sailing

Let's consider a hypothetical scenario:

Date: July 15th  /  Carrier: Oceanic Express  /  Route: Shanghai to Sydney

Customer A, a leading automotive parts dealer, has a shipment of 10,000 units scheduled to arrive in Sydney on July 25th. These parts are crucial for a contract with Manufacturer B, with a delivery deadline of August 1st.

However, due to unforeseen vessel repairs, Oceanic Express announces a blank sailing on July 15th. The next available shipment is on July 22nd, expected to arrive on August 1st. This potentially means the deadline is already forfeit, taking into account the timing for customs clearance and final delivery.

What Can You Do to Reduce the Impact of Blank Sailings?

While blank sailings are often beyond the control of shippers, there are proactive measures businesses can take to mitigate their impact:

1. Diversify Your Carriers: Don't rely on a single carrier. By diversifying the carriers you work with, you can have alternative options if one announces a blank sailing.
   Steps: Research multiple carriers, negotiate terms with several of them, and maintain open communication lines.
2. Advanced Booking: Book your shipments well in advance. This gives you a buffer in case of unexpected changes.
   Steps: Forecast your shipping needs, communicate with carriers early, and secure slots.
3. Maintain Buffer Stock: Keep a safety stock for potential delays.
   Steps: Analyze past sales data, determine optimal safety stock levels, and regularly review and adjust based on changing dynamics.
4. Flexible Shipping Routes: Be open to alternative routes that might be less affected by blank sailings.
   Steps: Work with your logistics provider to identify multiple routes, and be prepared to reroute shipments if necessary.
5. Stay Informed: Regularly monitor announcements from carriers and industry news.
   Steps: Subscribe to industry newsletters, join relevant forums, and communicate regularly with your carriers.
6. Insurance and Contracts: Ensure your contracts with carriers have clauses that protect you in case of blank sailings. Consider insurance that covers such disruptions.
   Steps: Review contracts with legal experts, negotiate terms that offer protection, and explore insurance options.
7. Use Technology: Leverage technology to track shipments and get real-time updates.
   Steps: Invest in modern supply chain management software, integrate tracking solutions, and train your team to use these tools effectively

How Kerry Logistics Oceania Manages Blank Sailings

At Kerry Logistics Oceania, our approach is proactive:

• Proactive Communication: We prioritize transparency. If there's a potential blank sailing, our clients are the first to know.

• Flexible Solutions: Our vast global logistics network allows us to offer alternative routes and solutions.

• Leveraging Our Network: Our expansive presence and resources mean we can navigate blank sailings effectively, minimizing disruptions for our clients.

FAQ - Blank Sailings

1. What exactly is a blank sailing?

   A blank sailing refers to a scheduled voyage that is canceled by the carrier.

2. Why do carriers opt for blank sailings?

   Carriers may choose blank sailings for various reasons, including operational challenges and market demand fluctuations.

3. How do blank sailings affect freight rates?

   Blank sailings reduce the available capacity, leading to increased freight rates.

4. Are blank sailings more common during peak seasons?

   Yes, during peak seasons, carriers might strategically announce blank sailings.

5. How can businesses prepare for blank sailings?

   Businesses can diversify their carriers, book shipments in advance, and maintain a buffer stock.

6. Do blank sailings affect all routes equally?

   No, the impact of blank sailings can vary based on the route and specific reasons.

7. Can businesses claim compensation for delays caused by blank sailings?

   The ability to claim compensation depends on the terms negotiated in the contract with the carrier.