By Lisa Barrington and Jeslyn Lerh
SEOUL/SINGAPORE (Reuters) -Congestion at Singapore’s container port is at its worst for the reason that COVID-19 pandemic, an indication of how extended vessel re-routing to keep away from Pink Sea assaults has disrupted international ocean transport – with bottlenecks additionally showing in different Asian and European ports.
Retailers, producers and different industries that depend on huge field ships are once more battling surging charges, port backups and shortages of empty containers, whilst many consumer-oriented companies look to construct inventories heading into the height year-end buying season.
International port congestion has reached an 18-month excessive, with 60% of ships ready at anchor situated in Asia, maritime knowledge agency Linerlytica mentioned this month. Ships with a complete capability of over 2.4 million twenty-foot equal container items (TEUs) have been ready at anchorages as of mid-June.
However, not like in the course of the pandemic, it’s not a shopping for flurry by house-bound customers that’s swamping ports.
Moderately, ship timetables are being disrupted with missed crusing schedules and fewer port calls, as vessels take longer routes round Africa to keep away from the Pink Sea, the place Yemen’s Houthi group has been attacking transport since November.
Ships are due to this fact offloading bigger quantities without delay at massive transhipment hubs like Singapore, the place cargoes are unloaded and reloaded on completely different ships for the ultimate leg of their journey, and forgoing subsequent voyages to atone for schedules.
“(Shippers) try to handle the scenario by dropping the packing containers at transhipment hubs,” mentioned Jayendu Krishna, deputy head of Singapore-based consultancy Drewry Maritime Advisors.
“Liners have been accumulating packing containers in Singapore and different hubs.”
Common Singapore cargo offload quantity jumped 22% between January and Could, considerably impacting port productiveness, Drewry mentioned.
SEVERE CONGESTION
Singapore, the world’s second-largest container port, has seen notably extreme congestion in current weeks.
The typical wait time to berth a container ship was two to a few days, Singapore’s Maritime and Port Authority (MPA) mentioned in end-Could, whereas container trackers Linerlytica and PortCast mentioned delays may last as long as per week. Usually, berthing ought to take lower than a day.
Neighbouring ports are additionally backing up as some ships skip Singapore.
The pressure has shifted to Malaysia’s Port Klang and Tanjung Pelepas, mentioned Linerlytica, whereas wait instances have additionally climbed at Chinese language ports, with Shanghai and Qingdao seeing the longest delays.
Drewry expects congestion at main transhipment ports to stay excessive, however anticipates some easing as carriers add capability and restore schedules.
Singapore’s MPA mentioned that port operator PSA had re-opened older berths and yards at Keppel (OTC:) Terminal and would open extra berths at Tuas Port to deal with prolonged waits.
Maersk, the world’s second-largest container provider, mentioned this month it will skip two westbound sailings from China and South Korea in early July because of extreme congestion in Asian and Mediterranean ports.
PEAK SEASON
The annual peak transport season has additionally arrived sooner than anticipated, exacerbating port congestion, shippers and analysis companies mentioned
This appears to be pushed by restocking actions, notably within the U.S., and by clients transport items early in anticipation of stronger demand, mentioned Niki Frank, CEO of DHL International Forwarding Asia Pacific.
Container charges, in the meantime, have surged, elevating the chance of one other spate of value will increase for patrons just like the post-pandemic inflation spike which central banks are nonetheless attempting to tame.
Charges had stabilised into April however in Could “there was a major enhance in ocean freight exports of Chinese language e-commerce, electrical automobiles, and renewable energy-related items,” Asia-focussed freight forwarder Dimerco mentioned.
“The height season, which historically begins in June, was superior by a full month, inflicting ocean freight charges to soar.”
Container import quantity on the 10 largest U.S. seaports in Could rose 12%, fuelled by the second-highest month-to-month import volumes since January 2023, mentioned knowledge supplier Descartes (NASDAQ:).
“(U.S.) customers are persevering with to spend greater than final yr, and retailers are stocking as much as meet demand,” mentioned Jonathan Gold, a Nationwide Retail Federation vp.
Ocean imports into Europe from Asia are additionally displaying indicators of a re-stocking season operating into peak season – pushing charges to 2024 highs, Judah Levine of freight platform Freightos mentioned.
Container freight costs from Asia to the U.S. and Europe have tripled since early 2024.
Charges from Asia and Singapore to the U.S. East Coast are at their highest since September 2022, whereas charges into the U.S. West Coast are highest since August 2022, freight platform Xeneta mentioned.
Some business gamers assume a part of the explanation for the bottlenecks at China ports is fuelled by U.S. importers speeding to purchase Chinese language items reminiscent of metal and medical merchandise that will likely be topic to steep tariff hikes from Aug. 1.
However newly imposed U.S. tariffs would have an effect on solely about 4% of Chinese language imports to the U.S., mentioned Jared Bernstein, chair of the Council of Financial Advisers.
Gene Seroka, government director of the Port of Los Angeles, the most important U.S. gateway for Chinese language ocean imports, additionally expects a restricted affect.
“We may even see a few of this cargo are available, however it’s not going to be a deluge,” he mentioned.
Considerations about doable strikes at U.S. ports this yr may be pulling the height season ahead, whereas DHL mentioned German port strikes have been including to the gridlock.
All of these disruptions will doubtless imply increased costs for customers, consultants warn.
“These are big monetary hits for shippers to soak up,” mentioned Peter Sand, chief analyst at Xeneta.
