Singapore’s container port is experiencing its worst congestion since the COVID-19 pandemic, largely due to prolonged vessel re-routing to avoid Red Sea attacks, causing significant disruptions in global shipping. The global port congestion has reached an 18-month high, with 60% of ships waiting at anchor in Asia.
This congestion is exacerbated by vessels taking longer routes around Africa, leading to missed schedules and fewer port calls, resulting in larger offloads at major transshipment hubs like Singapore. The average cargo offload volume in Singapore jumped by 22% between January and May, significantly impacting port productivity and causing severe delays.
The strain from Singapore’s congestion has shifted to neighboring ports such as Malaysia’s Port Klang and Tanjung Pelepas, and wait times have increased at Chinese ports like Shanghai and Qingdao. In response, Singapore’s Maritime and Port Authority has re-opened older berths and yards and is planning to open more berths at Tuas Port. The annual peak shipping season has arrived earlier than expected, driven by restocking activities in the U.S. and anticipated stronger demand, further worsening the congestion. Container rates have surged, raising concerns of another wave of price increases for consumers.
The congestion and rate hikes are also driven by increased U.S. import volumes, particularly from China, as importers rush to stock up ahead of impending U.S. tariff hikes. However, newly imposed U.S. tariffs are expected to affect only a small portion of Chinese imports, with limited impact anticipated on overall cargo volumes.
Source: Reuters