Singapore's port congestion intensifies! The terminal utilization rate has reached 90%! It will boost freight rates to rise further

2024-06-14 09:19

The Port of Singapore, one of the busiest ports in the world, has been exacerbated by the recent detours caused by the Red Sea crisis. Yemen's Houthi merchant ship attacks in the Red Sea have forced shipping companies to avoid the Suez Canal and bypass the Cape of Good Hope in southern Africa, which has caused cargo ships to be unable to refuel or unload at Middle Eastern ports, and have turned to ports off Singapore.

  As the Port of Singapore connects shipping routes from Europe, the Middle East to China, it is currently the hub for refueling and container ship redeployment. However, congestion at ports not only delays freight schedules, but also increases the pressure on freight rates. Drewry's head of marine services noted that the Singapore container terminal is already approaching 90 per cent utilisation, well above the optimal 70 per cent level.
According to statistics, the container throughput of the Port of Singapore in the first five months of this year has reached 16.9 million TEU, a year-on-year increase of 8%. However, as more and more ships detour and schedule changes, a large number of containers have piled up in container yards at several specific ports, and the waiting time for ships to enter the port has also been greatly extended.

In the report, the HSBC analyst team predicted that the spot price of sea freight may continue to rise due to the difficulty of solving the port congestion problem in the short term. The team noted that the poor port efficiency is mainly concentrated in Asia's export strips and some transshipment hubs, which could lead to further increases in container freight rates.
      According to Drewry, 44 container ships had to wait in line for four days in the open sea to enter the port last month, a significant increase in congestion compared to 14 container ships in January this year. Experts warn that the congestion problem at the Port of Singapore could worsen further in the coming months, as it usually takes some time for the impact of vessel detours to be fully reflected in the global transport system.

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