By Martina Kao    Photo：CANVA

Blank sailing have become an increasingly common and challenging phenomenon in the daily operations of global supply chains. Blank sailing refer to situations when planned flights or ships are canceled due to various reasons, resulting in cargo being unable to be transported on time. This phenomenon has had a profound impact on global trade and supply chain management, especially during the post-epidemic economic recovery, where various uncertainties have made supply chains more fragile.

In recent years, the global supply chain has faced many challenges, including port congestion, cargo backlogs, shipping capacity shortages, and consequent cost increases caused by the COVID-19 epidemic. As global demand fluctuates, shipping companies have begun adjusting capacity by canceling some flights to stabilize freight rates and respond to changes in demand. Although these blank flight strategies can help transporters maintain profits, they often mean greater uncertainty and challenges for traders and supply chain managers.

1. Main factors driving blank flights

Global demand and supply imbalance

Since the epidemic, fluctuations in global demand and supply have become a major driving force for blank flights. In the early stages of the COVID-19 outbreak, many countries implemented lockdown measures, which reduced production activities and plummeted demand for imported goods. However, as the global economy gradually recovers, market demand rebounds rapidly, but the supply chain cannot be restored immediately. Especially on the main trade routes between Asia, Europe and the United States, supply has fallen short of demand.

As the economy slows and inflationary pressure intensifies, global demand weakens again. In order to avoid excess capacity affecting freight rates, transportation companies have chosen to cancel flights to reduce transportation supply. This "imbalance between supply and demand" has caused transportation companies to use empty flights more frequently to adjust the market.

Environmental factors, port congestion and emergencies

In addition to demand fluctuations, environmental factors and emergencies are also important drivers of blank flights. For example, adverse weather conditions can prevent ships from operating properly or entering ports, thereby preventing cargo from being transported on time. In addition, port congestion problems also occur frequently, especially in major ports around the world such as Los Angeles and Long Beach in the United States. Logistics bottlenecks during the epidemic caused goods to be stranded in ports for a long time and unable to be loaded and unloaded in time.

Strikes and labor disputes are another reason for blank flights. For example, a strike by port workers will interrupt the cargo loading and unloading process, directly affecting the dispatch of ships and further exacerbating flight cancellations.

Transport companies’ strategy of using blank sailing to stabilize freight rates

In order to maintain the stability of the shipping market, transportation companies often use blank sailing as a means of capacity management. When market demand is low, canceling some flights can reduce transportation supply and avoid a sharp drop in freight rates. For transportation companies, this capacity adjustment strategy helps maintain profitability during market downturns, but for traders and companies that need to rely on stable logistics, it adds uncertainty.

2. Challenges of blank sailing to traders

Inventory management challenges

One of the biggest challenges posed by blank sailing is the difficulty of inventory management. When planned flights are canceled and goods fail to arrive on time, companies face the risk of inventory shortages, especially those that rely on a "just-in-time" model. If a company is unable to replenish inventory in a timely manner, it will not only affect production plans, but may also result in lost sales. On the contrary, excessive accumulation of inventory to cope with possible delays will increase the risk of inventory overstock, occupy funds, and affect the company's cash flow.

Cost increase

Blank sailing will not only cause cargo delays, but also drive up freight rates. Especially on some important trade routes, such as routes from Asia to Europe and the United States, flight cancellations will lead to tight supply of shipping capacity in the market, thereby pushing up freight rates. The rise in transportation costs will compress traders' profit margins, especially for low-profit industries. This cost pressure is particularly significant.

Unstable logistics

Traders are also facing challenges in order execution and delivery planning due to the uncertainty of blank flights. Long-term contracts may not be fulfilled as scheduled and customer delivery times may become unreliable, further impacting a business's reputation and customer satisfaction. In a highly competitive market, logistics instability can become a fatal weakness.

3. Strategies for dealing with blank flights

Diversified supply chain

One of the most effective strategies for dealing with white space flights is to diversify your supply chain. Companies can reduce reliance on a single route by relying on multiple routes or modes of transportation, so that when a problem occurs on a certain route, they can still rely on other transportation channels to ensure the timely arrival of goods. This supply chain diversification strategy can effectively reduce the risk of supply chain disruption caused by flight cancellations.

Leverage digital tools to optimize forecasts

Modern technologies, such as big data and artificial intelligence, can help companies predict changes in the shipping market more accurately. By analyzing historical data, companies can identify potential flight cancellation risks in advance and adjust logistics plans based on these predictions. In addition, digital tools can help companies optimize inventory management and ensure that sufficient inventory levels are maintained even if goods are delayed.

Strengthen cooperation with transporters

Establishing closer cooperative relationships with transporters is also a key strategy to deal with empty flights. Maintaining good communication with transporters can help companies understand changes in transport capacity more quickly and take response measures in advance. In addition, companies can also sign flexible contracts with transporters to ensure rapid capacity adjustments in emergencies.

Blank sailing have become an important variable in global supply chains, posing considerable challenges to traders and supply chain managers. However, by diversifying supply chains, applying digital tools and strengthening cooperation with transporters, companies can effectively reduce the risks caused by empty flights. As the market continues to change, supply chain managers need to develop flexible strategies and utilize advanced technologies to stay competitive and ensure stable operations of the supply chain.

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