To staunch the extreme congestion increase on the world’s largest container transhipment hub, PSA Singapore has reactivated older berths and yards which have beforehand been decanted at Keppel Terminal, whereas additionally including vital manpower to battle the field build-up.
“Port congestion has returned to hang-out the container markets, with Singapore turning into the newest chokepoint,” warned a report from Asian container consultancy Linerlytica, revealed on Tuesday, which famous berthing delays at the moment are as much as seven days on the world’s second largest container port with the overall capability ready to berth rising to greater than 500,000 teu in current days.
Carriers will proceed to push for larger and better freight charges
“The extreme congestion has pressured some carriers to omit their deliberate Singapore port calls, which can exacerbate the issue at downstream ports that must deal with extra volumes,” Linerlytica identified. The delays have additionally resulted in vessel bunching.
“The elevated demand on container dealing with in Singapore is a results of a number of container strains discharging extra containers in Singapore as they forgo subsequent voyages to make amends for their subsequent schedules. The variety of containers dealt with per vessel has additionally elevated,” the Maritime and Port Authority (MPA) of Singapore acknowledged in an replace on what the Southeast Asian republic was doing to counter the boxship site visitors.
Along with the eight current berths in Tuas Port, three new berths will start operations later this yr. This can enhance total port dealing with capability. PSA plans to speed up the commissioning of those new berths to assist enhance total container dealing with capability within the close to time period.
Many different Asian ports together with Shanghai, Qingdao and Port Klang are additionally experiencing congestion.
Reviews from India recommend that Mediterranean Delivery Firm (MSC), the world’s largest container provider, has began utilizing Indian ports akin to Kamarajar and Visakhapatnam for its transhipment operations as congestion in Singapore and Colombo have hampered schedule reliability.
Ports and liners are having to take care of the efficient closure of the Suez Canal due to Houthi assaults from Yemen, in addition to an early peak season, one thing that has pushed freight charges to all-time highs – bar the covid period – this month.
“The early arrival of peak season is including to the cocktail of uncertainty available in the market. Again firstly of 2024 you can level to the Crimson Sea disaster as the basis reason behind spot price will increase, this time round it’s way more nuanced,” commented Peter Sand, chief analyst at Xeneta, a freight price platform.
“Ocean freight carriers have tried to treatment the diversions within the Crimson Sea by growing transshipments within the western Mediterranean in addition to in Asia, however this has led to extreme port congestion in a number of hubs,” Sand defined.
Financial institution of America in a transport report issued earlier this week warned that its base case solely sees a return to regular Crimson Sea transits in April 2025.
Drewry’s composite spot World Container Index elevated 4% yesterday to $4,226 per feu, having began Might at $2,725 per forty-foot field, a 55% leap within the house of lower than a month.
The Shanghai Containerized Freight Index, one other key spot indicator, revealed as we speak, shot up by 12.63% to 3044.77 factors, the primary time the index has been above 3,000 factors since August 2022.
“Carriers will proceed to push for larger and better freight charges so the state of affairs could worsen for shippers earlier than it will get higher,” Xeneta’s Sand warned.