A Tried-and-True Formula: High Fuel Costs and Blank Sailings Equal Higher Rates

For many importers, today's freight market can seem contradictory. Economic uncertainties remain, tariff concerns remain, and lower consumer spending averages remain. Yet, interestingly, high fuel costs and ocean freight rates remain stubbornly high on many trade lanes.

One of the main reasons for these elevated freight rates is something called structured blank sailings. Structured blank sailings are planned, systematic vessel cancellations that ocean carriers build into their network strategy to control capacity, support freight rates, and maintain vessel utilization. Unlike unexpected or random blank sailings, structured blanks are often scheduled far in advance as part of a carrier's overall service design.

For example, a carrier may offer a weekly Asia-U.S. service but intentionally cancel every fourth sailing during a period of softer demand. Instead of operating half-empty vessels, the carrier removes capacity from the market and consolidates cargo onto the remaining sailings. This allows carriers to maintain higher vessel utilization by filling ships more completely while supporting higher freight rates through reduced available space.

"These structured blank sailings allow ocean carriers to carefully manage capacity, maintain higher vessel utilization, and support freight rates, even during periods of fluctuating demand,” said Steve Myers, Vice President of Operations for OEC Group’s North American Region. “The result is a market where carrier discipline has become more prevalent than in the past.”

Another reason for higher freight rates is that many shippers have been front-loading cargo in an effort to get ahead of possible tariff increases. This additional cargo volume has caused vessel space to become tighter than expected. When combined with structured blank sailings and other capacity management measures, this surge in demand has further limited available space and placed upward pressure on freight rates.

"As carriers continue to carefully balance supply with demand, shippers should expect freight rates to remain sensitive to schedule changes, capacity reductions, and geopolitical developments," said Frank Costa, Vice President of Sales for OEC Group. "Shippers should now expect that even in an uncertain economic environment, rates will remain elevated because it is no longer just about how much cargo is moving. It is now also about how much space carriers are willing to provide."