The bottlenecks that have developed in other Asian and European ports are evidence of how extended vessel rerouting to avoid assaults in the Red Sea has impacted global ocean transport. The congestion at Singapore's container port is at its worst since the COVID-19 epidemic.
While many consumer-focused businesses want to stockpile inventory ahead of the busiest time of year—the end of the year shopping season—retailers, manufacturers, and other industries that depend on large box ships are once more facing rising costs, port backlogs, and shortages of empty containers.
According to marine intelligence provider Linerlytica, port congestion worldwide has hit an 18-month high, with 60% of ships anchored in Asia. As of mid-June, there were ships in anchorages with a combined capacity of nearly 2.4 million twenty-foot equivalent container units (TEUs).
However, unlike during the epidemic, ports are not being overrun by shoppers who are stuck at home.
On the contrary, as ships take longer routes across Africa to avoid the Red Sea, where Yemen's Houthi militia has been assaulting shipping since November, ship itineraries are being interrupted with missed sailing dates and fewer port visits.
In order to catch up on timetables, ships are forgoing following journeys and dumping bigger volumes at once at major transhipment hubs like Singapore, where commodities are unloaded and reloaded on separate ships for the last leg of their journey.
Shippers are attempting to control the situation by leaving the boxes in transhipment hubs, according to Jayendu Krishna, deputy head of Drewry Maritime Advisors, a firm located in Singapore.
Tuesday's closing price of US equities was uneven, with the Nasdaq rising as a result of a rise in Nvidia shares.
"Liners have been accumulating boxes in Singapore and other hubs."
According to Drewry, the average volume of goods offloaded from Singapore increased by 22% between January and May, which had a major effect on port productivity.
The second-biggest container port in the world, Singapore, has had very bad congestion lately.
Container trackers Linerlytica and PortCast reported that delays might extend up to a week, while Singapore's Maritime and Port Authority (MPA) stated at the end of May that the average wait time to dock a container ship was two to three days. Berthing should normally take no more than a few days.
Not only are nearby ports backed up, but some ships are avoiding Singapore.
According to Linerlytica, the burden has moved to Tanjung Pelepas and Port Klang in Malaysia. Wait times have also increased at Chinese ports, with Shanghai and Qingdao seeing the highest waits.
Drewry predicts some relief in traffic as carriers increase capacity and reinstate schedules, but overall, he expects congestion at major transhipment ports to remain high.
According to Singapore's MPA, in an effort to shorten long wait times, port operator PSA has reopened older berths and yards at Keppel Terminal and plans to open more berths at Tuas Port.
Due to extreme congestion in Asian and Mediterranean ports, Maersk, the second-biggest container carrier in the world, said this month that it will forego two westbound sailings from China and South Korea in early July.
According to shippers and research organisations, the yearly peak shipping season has also arrived earlier than anticipated, worsening port congestion.
According to Niki Frank, CEO of DHL Global Forwarding Asia Pacific, this appears to be driven by restocking efforts, especially in the United States, and by clients sending products early in anticipation of increased demand.
While this is going on, container rates have skyrocketed, increasing the possibility of another round of price rises for consumers like to the post-pandemic inflation spike that central banks are still attempting to contain.
Rates had levelled down by April, but according to freight forwarder Dimerco, which specialises in Asia, "there was a significant increase in ocean freight exports of Chinese e-commerce, electric vehicles, and renewable energy-related goods" in May.
"The peak season, which traditionally starts in June, was advanced by a full month, causing ocean freight rates to soar."
According to data supplier Descartes, the 10 biggest U.S. seaports had a 12% increase in container import volume in May, driven by the second-highest monthly import volumes since January 2023.
Vice president of the National Retail Federation Jonathan Gold stated, "Retailers are stocking up to meet demand as (US) consumers are continuing to spend more than last year."
According to Judah Levine of the goods platform Freightos, ocean imports into Europe from Asia are also exhibiting indications of a restocking season heading into peak season, driving prices to 2024 highs.
Since early 2024, the cost of shipping containers from Asia to the United States and Europe has quadrupled.
According to goods platform Xeneta, rates from Asia and Singapore to the U.S. East Coast are at their highest point since September 2022, while prices to the U.S. West Coast are at their highest point since August 2022.
Certain industry participants believe that U.S. importers hurrying to purchase Chinese goods—like steel and medical supplies—that would face sharp tariff increases starting on August 1 are contributing factors to the backlog at China ports.
Jared Bernstein, the chair of the Council of Economic Advisers, stated that the recently implemented tariffs by the United States will impact just 4% of Chinese imports into the country.
The biggest U.S. gateway for Chinese ocean imports, the Port of Los Angeles, whose executive director, Gene Seroka, anticipates a little effect.
"We may see some of this cargo come in, but it is not going to be a deluge," he said.
While DHL said that strikes at German ports were exacerbating the traffic jam, worries about potential strikes at American ports this year may also be pushing the peak season ahead.
Experts caution that customers would undoubtedly pay more as a result of all those interruptions.
"Shippers will have to bear significant financial losses as a result," Xeneta chief analyst Peter Sand stated.
(Source:www.fastbull.com)
While many consumer-focused businesses want to stockpile inventory ahead of the busiest time of year—the end of the year shopping season—retailers, manufacturers, and other industries that depend on large box ships are once more facing rising costs, port backlogs, and shortages of empty containers.
According to marine intelligence provider Linerlytica, port congestion worldwide has hit an 18-month high, with 60% of ships anchored in Asia. As of mid-June, there were ships in anchorages with a combined capacity of nearly 2.4 million twenty-foot equivalent container units (TEUs).
However, unlike during the epidemic, ports are not being overrun by shoppers who are stuck at home.
On the contrary, as ships take longer routes across Africa to avoid the Red Sea, where Yemen's Houthi militia has been assaulting shipping since November, ship itineraries are being interrupted with missed sailing dates and fewer port visits.
In order to catch up on timetables, ships are forgoing following journeys and dumping bigger volumes at once at major transhipment hubs like Singapore, where commodities are unloaded and reloaded on separate ships for the last leg of their journey.
Shippers are attempting to control the situation by leaving the boxes in transhipment hubs, according to Jayendu Krishna, deputy head of Drewry Maritime Advisors, a firm located in Singapore.
Tuesday's closing price of US equities was uneven, with the Nasdaq rising as a result of a rise in Nvidia shares.
"Liners have been accumulating boxes in Singapore and other hubs."
According to Drewry, the average volume of goods offloaded from Singapore increased by 22% between January and May, which had a major effect on port productivity.
The second-biggest container port in the world, Singapore, has had very bad congestion lately.
Container trackers Linerlytica and PortCast reported that delays might extend up to a week, while Singapore's Maritime and Port Authority (MPA) stated at the end of May that the average wait time to dock a container ship was two to three days. Berthing should normally take no more than a few days.
Not only are nearby ports backed up, but some ships are avoiding Singapore.
According to Linerlytica, the burden has moved to Tanjung Pelepas and Port Klang in Malaysia. Wait times have also increased at Chinese ports, with Shanghai and Qingdao seeing the highest waits.
Drewry predicts some relief in traffic as carriers increase capacity and reinstate schedules, but overall, he expects congestion at major transhipment ports to remain high.
According to Singapore's MPA, in an effort to shorten long wait times, port operator PSA has reopened older berths and yards at Keppel Terminal and plans to open more berths at Tuas Port.
Due to extreme congestion in Asian and Mediterranean ports, Maersk, the second-biggest container carrier in the world, said this month that it will forego two westbound sailings from China and South Korea in early July.
According to shippers and research organisations, the yearly peak shipping season has also arrived earlier than anticipated, worsening port congestion.
According to Niki Frank, CEO of DHL Global Forwarding Asia Pacific, this appears to be driven by restocking efforts, especially in the United States, and by clients sending products early in anticipation of increased demand.
While this is going on, container rates have skyrocketed, increasing the possibility of another round of price rises for consumers like to the post-pandemic inflation spike that central banks are still attempting to contain.
Rates had levelled down by April, but according to freight forwarder Dimerco, which specialises in Asia, "there was a significant increase in ocean freight exports of Chinese e-commerce, electric vehicles, and renewable energy-related goods" in May.
"The peak season, which traditionally starts in June, was advanced by a full month, causing ocean freight rates to soar."
According to data supplier Descartes, the 10 biggest U.S. seaports had a 12% increase in container import volume in May, driven by the second-highest monthly import volumes since January 2023.
Vice president of the National Retail Federation Jonathan Gold stated, "Retailers are stocking up to meet demand as (US) consumers are continuing to spend more than last year."
According to Judah Levine of the goods platform Freightos, ocean imports into Europe from Asia are also exhibiting indications of a restocking season heading into peak season, driving prices to 2024 highs.
Since early 2024, the cost of shipping containers from Asia to the United States and Europe has quadrupled.
According to goods platform Xeneta, rates from Asia and Singapore to the U.S. East Coast are at their highest point since September 2022, while prices to the U.S. West Coast are at their highest point since August 2022.
Certain industry participants believe that U.S. importers hurrying to purchase Chinese goods—like steel and medical supplies—that would face sharp tariff increases starting on August 1 are contributing factors to the backlog at China ports.
Jared Bernstein, the chair of the Council of Economic Advisers, stated that the recently implemented tariffs by the United States will impact just 4% of Chinese imports into the country.
The biggest U.S. gateway for Chinese ocean imports, the Port of Los Angeles, whose executive director, Gene Seroka, anticipates a little effect.
"We may see some of this cargo come in, but it is not going to be a deluge," he said.
While DHL said that strikes at German ports were exacerbating the traffic jam, worries about potential strikes at American ports this year may also be pushing the peak season ahead.
Experts caution that customers would undoubtedly pay more as a result of all those interruptions.
"Shippers will have to bear significant financial losses as a result," Xeneta chief analyst Peter Sand stated.
(Source:www.fastbull.com)