Major Port Congestion in Singapore Affecting Container Markets

A recent analysis by Bank of America reveals that Singapore, Dubai, and the Mediterranean have become major congestion hotspots amid a container shortage in the Asian region. Since the beginning of this year, about 2% of the shipping capacity has been jammed by port congestion. The waiting time for berthing has increased to as much as seven days in Singapore, with the total capacity waiting for berthing rising to 450,000 TEUs in recent days.

The severe congestion has forced some carriers to skip planned port calls in Singapore, forcing downstream ports to handle additional volumes. The delays have also resulted in vessel bunching. Waiting time at Shanghai Port, the world's largest container port, is now the highest it has been in the past three years. To maintain schedule reliability, shipping lines on long-haul routes are skipping congested ports, and resorting to blank sailing.

According to a report from Asian container consultancy Linerlytica, port congestion has returned to haunt the container markets, with Singapore becoming the latest chokepoint. Berthing delays in Singapore have climbed to seven days, and the total capacity waiting to berth has reached 450,000 TEUs. The congestion is forcing carriers to omit their planned Singapore port calls, which adds to the problem at downstream ports.

Shanghai and Qingdao are also experiencing significant build-ups of boxships at anchor. Dwell times in Shanghai are now at three-year highs. Such inefficiencies in cargo movement have led carriers to omit regional calls and resort to blank sailings on longer haul routes to restore schedule reliability, which has further reduced the already tight capacity.

HSBC noted that today's spot freight rates are the highest on record outside the COVID era. Delays and omissions are contributing to reports of empty container shortages and congestion due to vessel bunching at ports in China, Singapore, and Malaysia. Port Klang in Malaysia ranks eighth on Linerlytica's list of the most congested boxports today.

S&P Global Market Intelligence's latest weekly newsletter reported potential disruptions in Northern China ports, starting to experience congestion caused by container availability due to a combination of Red Sea-related disruptions and build-ups of empty containers in ports where they are not needed. Intelligence analysts suggested that the sudden surge in demand and port congestion in Asia are soaking up more capacity, which the market does not have. Carriers are blanking sailings not to restrict capacity but because they do not have free vessels to maintain weekly services when vessels get stuck in congestion.