Seaport congestion is widespread in Asia

 

Seaport congestion is widespread in Asia, container freight rates are expected to remain high until the third quarter of 2024

Posted onJune 10, 2024by VPA

10
Jun

Singapore Port - the world's second largest container port - is experiencing more serious congestion than during the peak period of the COVID-19 pandemic. This is causing a knock-on impact on a series of seaports in the region.

 A series of major ports in Asia and Europe are experiencing serious congestion with a large number of ships in port and waiting to dock (as of June 2). (Source: Linerlytica)

Singapore Port - the world's second largest container port - is experiencing sudden congestion. The level of congestion this time is even more serious than when the COVID-19 pandemic broke out when there were up to 450,000 TEUs waiting to enter or leave this port.

The reason is said to be due to the chain impact of the recent maritime crisis in the Red Sea region, forcing container shipping lines to change their schedules. In addition, many shippers are also rushing to transport goods to the US due to concerns about the risk of a strike in September 2024 when salary negotiations for seaport workers on the East Coast of the US take place. didn't go well. These factors have created the phenomenon of "ship congestion" with too many ships arriving at the port at the same time unexpectedly.

Data from the Maritime and Port Authority of Singapore (MPA) shows that in the first 4 months of this year, throughput through Singapore port increased nearly 9% over the same period last year, reaching 13.36 million TEU.

According to data from market research firm S&P Global Commodity Insights, in just the first 20 days of May 2024, Singapore port received 999 cargo ships, a jump of 56% compared to April 2024. MPA said that ships currently need to wait an average of 2-3 days to dock in Singapore. However, some shipping lines said they have to wait up to 7 days for their turn to dock.

As a hub for transshipment of goods, connecting to more than 600 other ports globally, congestion at the Port of Singapore is creating a ripple effect on ports in the region such as Port Klang and Tanjung Pelepas Port in Malaysia, Shanghai port and Qingdao port in China...

The long wait at Singapore port caused some ships to cancel their plans to dock at this port and redirect to neighboring ports, thereby forcing ports in the area to handle sudden, unplanned cargo volumes. .

Shipping market research firm Linerlytica said ports in Southeast Asia are becoming the "most serious bottleneck" for world maritime transport activities, when 26% of global container capacity is being blocked. stuck in this area.

Currently, the global port congestion index has reached 2 million TEU, equivalent to 6.8% of total global carrying capacity, compared to the normal level of only about 2-4%. This situation is exacerbating the shortage of empty containers and pushing container freight rates up again in recent weeks.

The Shanghai Container Shipping Index (SCFI) has increased 42% in the past month. The SCFI index measures spot shipping rates for containers from the Shanghai port area (China) to a series of major global ports such as Barcelona, ​​Hamburg, and Rotterdam in Europe; Los Angeles, Oakland, New York in the US; Osaka, Tokyo in Japan…

The SCFI index (as of May 31) has skyrocketed compared to the beginning of this year. (Source: SCFI)

The world's second largest shipping company Maersk has just informed customers about "significant" delays in ship schedules due to congestion at ports in the Mediterranean and Asia. As a result, Maersk ships will temporarily stop calling at some ports in the coming weeks.

Currently, some organizations predict that shipping lines will increase freight rates and add new surcharges to compensate for losses caused by port congestion. This has been applied by shipping lines throughout the COVID-19 pandemic.

Last week, a series of major shipping lines based in Taiwan (China) such as Evergreen, Yang Ming and Wan Hai predicted that congestion at ports in Asia would not ease in the short term, so freight rates Container shipping will remain anchored until the third quarter of 2024.

As Industry and Trade Magazine has reported, the global container index, representing spot container freight rates on major international shipping routes, has returned to the peak of the COVID-19 epidemic, with fixed ship rental prices. Limits of some segments reached an increase of up to 65% compared to the beginning of this year. The environment of high freight rates and increased transport output is expected to boost the business results of shipping enterprises.

According to Tapchicongthuong