Prolonged congestion at Singapore’s port to continue through June due to 3 factors

SINGAPORE: Prolonged congestion at Singapore’s port is expected to continue through June and possibly beyond due to three main factors.

Singapore Business Review reports that increased container throughput, vessel bunching from disrupted global shipping schedules, and a surge in worldwide demand have led to significant delays and operational challenges.

As a result, container prices in Singapore have risen by 26% since October 2023.

Increased container throughput

Singapore has seen a notable rise in container throughput. Data from Container xChange, a Germany-based platform, indicates an 8.8% year-on-year increase in the first four months of 2024, reaching 13.4 million twenty-foot equivalent units (TEUs).

This surge in container volume has caused substantial berthing delays of up to two to three days. Off-schedule arrivals have further worsened these delays.

Vessel bunching and off-schedule arrivals

Another major factor contributing to the congestion is vessel bunching. Disrupted global shipping schedules have caused ships to arrive in clusters rather than at staggered times, overwhelming terminal operations.

Surge in global demand

The broader global shipping environment is also a significant factor. There has been a notable increase in demand for cargo from China to the US and China to Europe over the past six months.

Container xChange said this has had a “significant impact on the congestion at the Singapore port.”

The global congestion has pushed the average container prices in Singapore to increase by 26% from October 2023 to May 2024.

Specifically, the average prices for 20-foot dry containers have risen from US$950 in September 2023 to US$1211 in the last week of May.

Several shipping lines have adjusted their operations in response to the prolonged congestion. For example, the Mediterranean Shipping Company (MSC) has started to omit Singapore in favour of other regional ports.

MSC has diverted some transhipment operations to Indian ports, while carriers like OOCL are rerouting Singapore-bound cargo to Port Klang in Malaysia.

This shift has put additional pressure on these alternative ports, causing regional congestion and delays. /TISG