Singapore port congestion

Singapore port congestion

Severe congestion at Singapore port has caused many container ships to wait offshore for up to 7 days to berth, instead of the usual half-day wait for anchorage.
Singapore port is the second largest container port in the world, comprising the Tanjong Pagar, Keppel, Brani, Pasir Panjang, Sembawang, Jurong, and Tuas terminals. This port handled 39 million 20-foot equivalent units (TEU) in 2023. It is the world's largest transshipment hub, playing a crucial role in global trade as container ships can stop here to unload cargo for other ports before loading additional cargo for transport to their final destination.
"Currently, 450,000 TEU are waiting to enter or leave Singapore port. For Singapore, a major hub for intra-Asia and East-West trade routes, this number is even higher than during the Covid-19 pandemic," said Goetz Alebrand, Head of Ocean Freight Americas at DHL Global Forwarding.
According to a report by Linerlytica, severe congestion has forced some shipping lines to cancel planned calls at Singapore Port. This has disrupted cargo loading and unloading schedules at downstream ports. Singapore Port is a gateway connecting to over 600 ports worldwide, with an average of 140,000 vessel calls annually.
The main cause of congestion is the ripple effect from the maritime crisis in the Red Sea, which is causing container shipping lines to alter their schedules. Additionally, shippers are rushing to transport goods to the US due to concerns about strikes if wage negotiations between East Coast port workers in the US in September do not go smoothly.
Last week, the Maritime and Port Authority of Singapore (MPA) stated that the container volume handled in Singapore in the first four months of 2024 reached 13.36 million TEU, an 8.8% increase compared to the same period last year. According to S&P Global Commodity Insights data, from May 1 to May 23, the port received 999 vessels, compared to only 639 vessels in April.
MPA explained that vessels arriving off-schedule are the main cause of the bunching effect, with many vessels attempting to berth at the same time or within a short period. According to MPA, the average waiting time for berthing is currently 2-3 days.
MPA has been working with the Ministry of Transport and the Port of Singapore Authority (PSA) since late 2023 to add more manpower and container handling capacity. One of the changes implemented by PSA is the re-opening of previously closed berths at the Keppel terminal. Additionally, Singapore Port expects to operationalize three new berths at the Tuas terminal by the end of this year.
Port congestion is once again becoming a global concern, especially at ports in Asia and the western Mediterranean. Goetz Alebrand of DHL Global Forwarding stated that approximately 7% of global container capacity is currently tied up in ports worldwide.
"In a normal cycle, the average container capacity tied up is about 2-4%," Alebrand said.
According to Linerlytica's analysis, Southeast Asian ports are the worst bottleneck, accounting for over a quarter (26%) of global tied-up container capacity, while Northeast Asian ports account for 23%.
Nearly half of westbound Asia-Europe container ship voyages have not departed on time due to increasing congestion at Asian ports. Linerlytica stated that last week, only 6 out of 11 container ship voyages on the Asia-North Europe route departed on schedule, mainly due to congestion at Singapore Port and Malaysia's Tanjung Pelepas port.
"While congestion at Singapore Port has eased, the strain has shifted to Port Klang and Tanjung Pelepas in Malaysia. Waiting times for berthing have also increased in all major Chinese port areas. Among them, Shanghai and Qingdao have seen the longest delays," the Linerlytica report stated.
Container ships currently wait up to 5 days to berth at Shanghai port, where congestion has peaked since the Covid-19 pandemic.
In a letter to customers on June 3,Maersk, the world's second-largest shipping company, announced significant delays in its vessel schedules due to severe congestion at ports in the Mediterranean and Asia. As a result, Maersk will implement several blank sailings (canceling port calls) in the coming weeks.
The Port of Singapore experiencing off-schedule container arrivals, extending waiting times for berthing, further raises concerns about broader global congestion.
According to maritime trade consultancy Sea-Intelligence, the global on-time arrival rate for container ships fell to 52% in April, 2.5 percentage points lower than the previous month and 12 percentage points lower than the same period last year.
The transit time for general container ships soared as the on-time port arrival rate decreased. Sea-Intelligence also noted that the minimum average transit time from two Asian sub-regions (North Asia and Southeast Asia) to three Mediterranean sub-regions in the first three months of this year increased by 39% compared to the period from July to December 2023.
Last week, Taiwanese shipping companies Evergreen, Yang Ming, and Wan Hai predicted that port congestion in Asia would not ease in the short term, so container shipping rates would remain high in Q3.
Maersk also forecasts an increase in shipping rates due to port congestion. The company raised its 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast to 7-9 billion US dollars, an increase of 3 billion dollars from its previous forecast.

Theo Sourcing Journal, The Load Star, JOC

The Port of Singapore is experiencing unprecedented congestion.

Image: Business Times