The port of Singapore is facing significant challenges due to delays in cargo movement, exacerbated by the diversion of ships from the Red Sea. A recent report by Linerlitica highlighted the potential for increased congestion at Singapore’s port if this trend continues. With ongoing threats from the Houthis and potential diversions into the Indian Ocean, the situation is likely to worsen in the near future.
Linerlytics Virtue, a container market intelligence analyst firm, has identified Southeast Asia as a major bottleneck, accounting for 26% of current congestion, followed closely by North-East Asia at 23%. However, Singapore is considered the epicenter of the backlog, with an estimated 450,000 TEU waiting to be shipped and vessels experiencing up to a seven-day wait for a berth.
The increase in transit times for containers out of Asia has led shipping companies to deploy all available vessels, further contributing to the congestion issues at Singapore’s port.
Sea-Intelligence, a different market intelligence company, recently released a report indicating that voyage durations on the most popular routes between Asia and Europe are experiencing a consistent increase over time. However, the situation is different for the worst Mediterranean ports. In many cases, carriers opt to transship containers through intermediate ports due to diversions from the Suez Canal. According to Sea-Intelligence, travel times during the first quarter of 2024 have shown an average increase of 39 percent on the most popular route pairings between Asia and the Mediterranean, as well as Asia and Northern Europe. The report highlights that the situation is particularly severe in ports located in the Eastern Mediterranean, where average transit times have increased from 61 to 63 percent. Similarly, average transit times to the central Mediterranean have increased from 39 to 40 percent.
Linerlytica has also pointed out that Singapore’s growing congestion has additional implications. For instance, ships are compelled to wait further outside the associated anchorages and beyond the harbor, similar to the situation in Singapore. Carriers, in an effort to avoid lengthy transit times and escalating delays, are opting for less congested ports like Port Klang in Malaysia. Another contributing factor to the congestion is the accumulation of ships at various points along the routes.
On a global scale, Linerlitica estimates that two million TEUs of shipping capacity, which accounts for seven percent of the global fleet, are currently affected by congestion.
As these pressures continue to mount, shipping costs can also rise rapidly. Multiple reports are cautioning that prices are reverting back to levels seen during the pandemic, as this new wave of port congestion affects various segments of the market.
