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90% container ships are delayed!

2024-07-08 10:03

Congestion at Singapore's port has climbed to its highest level since the outbreak of the pandemic, a direct reflection of the long-term detour strategy that ships have been forced to navigate in order to avoid the risk of attacks in the Red Sea, which has severely disrupted the global shipping order and caused other major ports in Asia and Europe to fall into operational bottlenecks. Singapore's Transport Minister Chee Hong Tat said that about 90% of container ships currently fail to arrive in Singapore on time.

At the same time, many consumer-oriented companies are planning to replenish their inventory for the year-end sales season. However, retailers, manufacturers and other related industries, which rely heavily on large container ships for their cargo, are once again having to face multiple challenges such as soaring freight rates, severe port congestion and container supply shortages. According to maritime data agency Linerlytica, global port congestion has hit an 18-month high, with 60% of ships docked in Asia, with ships with a total capacity of more than 2.4 million TEUs waiting at ports as of the end of June.

However, the biggest difference between this time and the epidemic is that the reason for the port congestion is not the buying frenzy of homebound consumers, but the fact that the ships have made a detour to Africa for a longer route in order to avoid the attacks of the Red Sea armed groups, which has disrupted the sailing time of the ships. In a written response to a related question, Singapore's Transport Minister Chee Hong Tat revealed that due to the crisis in the Red Sea region, about 90% of container ships have not arrived in Singapore on time, which is a significant increase from the average in 2023 (about 77%). It highlights the challenges and uncertainties facing the maritime industry today.

"The ongoing impact of the Red Sea crisis has forced ships sailing between Asia and Europe to make a detour to the Cape of Good Hope, a change that has led to even more severe schedule delays at ports around the world. At the same time, a large number of ships are concentrating on specific ports in a short period of time, forming the so-called 'bunching' phenomenon, which further complicates the problem. ”
Singapore's Transport Minister Koh Hong Tat stressed that this situation has significantly increased the demand and operational difficulty for Singapore's terminals to handle containers. He further explained: "Liner companies have chosen Singapore as an important transshipment hub to expedite the return of ships to Europe, which has enhanced the strategic position of the port of Singapore, but also extended the operating time of container ships in port, which in turn has triggered a knock-on effect of increased waiting times for incoming ships and increasing berth congestion. ”

Faced with this challenge, he made it clear that the Ministry of Transport, the Maritime and Port Authority of Singapore (MPA) and the Singapore Port Authority (PSA) are "working closely together" to find and implement effective solutions to ease congestion at ports and restore normal shipping order. Mr Chee elaborated on a series of measures and future plans for the Port of Singapore to address the current challenges, as Singapore has reactivated some berths and yards at Keppel Terminal and Tanjong Pagar Terminal in the city to increase processing capacity. Since the beginning of the year, PSA has significantly improved the operational efficiency of its terminals and plans to further expand its capacity in the coming months to cope with the expected increase in demand. In particular, the construction of Tuas Port is progressing well, with three new berths set to open this year, with the first berth expected to open this week, followed by two in October and December. PSA also said that it will accelerate the development of additional processing capacity if demand continues to rise.

He also emphasised: "The Pasir Panjang Terminal will be a solid backing for the construction of Tuas Port until at least 2040, ensuring that the port's container handling capacity will continue to grow without decreasing during this period until Tuas Port is fully completed, when it will have an annual throughput of a staggering 65 million TEU." ”
      Regarding the current state of operations, he noted: "In the first five months of this year, Singapore's container throughput increased by 7.7% year-on-year to 16.9 million TEU. While our efforts have improved average wait times this month (June), the continued impact of the Red Sea crisis and the surge in cargo volumes caused by cargo owners shipping earlier for the holiday season could still exacerbate port congestion. "Despite the overall market trend adjustment, the US East coast route is still particularly strong, with 40-foot container rates approaching $10,000, the highest since late June 2022.

Congestion at the Port of Singapore under the current situation

In the past, the traditional mode of operation of vessels in large transshipment ports such as Singapore was to unload the cargo and reload it to other vessels for final transportation. With the strain of the global logistics chain, it has been seriously challenged. Now, in order to avoid delays and catch up with schedules, many shipments are choosing to abandon onward voyages in Singapore, resulting in a significant increase in the average volume of cargo discharged at Singapore's ports, which even soared by 22% between January and May this year, a phenomenon that has put huge pressure on port productivity.
      As the world's second-largest container port, Singapore has recently faced particularly severe port congestion. Although Singapore's Maritime and Port Authority (MPA) said at the end of May that the average waiting time for container ships was two to three days, the actual delay could be as long as a week, far more than the berth time vessels usually take no more than a day, according to vessel tracking companies Linerlytica and PortCast.
      The congestion also set off a ripple effect, forcing some vessels to abandon berths in Singapore in favor of other neighbouring ports, such as Port Klang and Tanjung Papas in Malaysia, but the capacity of these ports was also tested and congestion increased. In addition, waiting times at Chinese ports are gradually increasing, reflecting the spread and complexity of global supply chain tensions.

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