By Lisa Barrington and Jeslyn Lerh
SEOUL/SINGAPORE (Reuters) – Congestion at Singapore’s container port is at its worst since the Covid-19 pandemic, a sign of how the prolonged rerouting of ships to avoid attacks in the Red Sea has disrupted global shipping – with bottlenecks also appearing in other Asian countries. and European ports.
Retailers, manufacturers and other industries that rely on huge cargo ships are once again struggling with rising fees, port backlogs and a shortage of empty containers, even as many consumer-oriented companies look to build stocks ahead of the season. high end-of-year shopping.
Global port congestion has reached an 18-month high, with 60% of ships at anchor located in Asia, maritime data firm Linerlytica reported this month. Ships with a total capacity of more than 2.4 million twenty-foot container equivalent units (TEUs) were waiting at anchorages in mid-June.
But, unlike what happened during the pandemic, it is not a wave of purchases by consumers living at home that is flooding the ports.
Instead, ship schedules are being disrupted with missed sailing schedules and fewer port calls as ships take longer routes around Africa to avoid the Red Sea, where Yemen’s Houthi group has been attacking. maritime transport since November.
Ships are therefore unloading larger quantities at once in large transshipment hubs like Singapore, where cargoes are unloaded and reloaded onto different ships for the final leg of their journey, and foregoing subsequent trips to meet schedules.
“(Shippers) are trying to manage the situation by leaving boxes at transshipment centers,” said Jayendu Krishna, deputy head of Singapore-based consultancy Drewry Maritime Advisors.
“Transatlantic liners have been accumulating boxes in Singapore and other centers.”
Singapore’s average cargo unloading volume increased by 22% between January and May, significantly impacting port productivity, Drewry said.
SERIOUS CONGESTION
Singapore, the world’s second largest container port, has experienced particularly severe congestion in recent weeks.
The average wait time for a container ship to dock was two to three days, the Maritime and Port Authority (MPA) of Singapore reported in late May, while container trackers Linerlytica and PortCast said delays could last up to one week. Typically, docking should take less than a day.
Neighboring ports are also pulling back as some ships leave Singapore.
Tensions have shifted to Port Klang and Tanjung Pelepas in Malaysia, Linerlytica said, while waiting times have also increased at Chinese ports, with Shanghai and Qingdao experiencing the longest delays.
Drewry expects congestion at major transshipment ports to remain high, but anticipates some reduction as carriers increase capacity and restore schedules.
Singapore MPA has reopened older berths and yards at Keppel Terminal and will open more berths at Tuas Port to deal with extended waits.
Maersk, the world’s second-largest container shipper, said this month it would skip two voyages west to China and South Korea in early July due to severe congestion at Asian and Mediterranean ports.
HIGH SEASON
The annual peak shipping season also arrived earlier than expected, exacerbating port congestion, shippers and research firms said.
This appears to be driven by replenishment activity, especially in the US, and customers shipping goods early in anticipation of stronger demand, said Niki Frank, CEO of DHL Global Forwarding Asia Pacific.
Container rates, meanwhile, have risen, raising the risk of another wave of price hikes for buyers, like the post-pandemic inflation spike that central banks are still trying to control.
Rates stabilized in April, but in May “there was a significant increase in exports of Chinese e-commerce sea freight, electric vehicles and renewable energy-related goods,” said Asia-focused freight forwarder Dimerco.
“The peak season, which traditionally begins in June, has been brought forward an entire month, causing sea freight rates to soar.”
Container import volume at the 10 largest US seaports rose 12% in May, driven by the second-highest monthly import volume since January 2023, data provider Descartes said.
“(U.S.) consumers continue to spend more than they did last year and retailers are stocking up to meet demand,” said Jonathan Gold, vice president of the National Retail Federation.
Ocean imports from Asia to Europe also show signs of a replenishment season heading into peak season – pushing rates to 2024 highs, said Judah Levine of freight platform Freightos.
Container shipping prices from Asia to the US and Europe have tripled since the start of 2024.
Rates from Asia and Singapore to the US East Coast are at their highest level since September 2022, while rates to the US West Coast are the highest since August 2022, cargo platform Xeneta said.
Some industry participants believe part of the reason for bottlenecks at China’s ports is fueled by the rush by U.S. importers to buy Chinese goods such as steel and medical products, which will be subject to sharp tariff hikes starting Aug. 1.
But the new tariffs imposed by the US would affect only about 4% of Chinese imports to the US, said Jared Bernstein, president of the Council of Economic Advisers.
Gene Seroka, executive director of the Port of Los Angeles, the largest U.S. gateway for Chinese seaborne imports, also expects a limited impact.
“We may see some of that load arriving, but it won’t be a deluge,” he said.
Concerns about possible strikes at US ports this year may also be delaying the peak season, while DHL says strikes at German ports are worsening the impasse.
All of these disruptions will likely mean higher prices for consumers, experts warn.
“These are huge financial hits for shippers to absorb,” said Peter Sand, chief analyst at Xeneta.
(Reporting by Jeslyn Lerh in Singapore, Lisa Baertlein in Los Angeles and Lisa Barrington in Seoul; Editing by Miyoung Kim and Kim Coghill)
