Port congestion in Singapore leads to some liners skipping calls here

PORT congestion in Singapore has forced some liners to skip the world’s top transhipment hub, as delays in the city-state have reached “critical levels” of up to seven days, an industry intelligence website wrote.

Linerlytica, in a weekly post dated May 28, reported that vessels with a total capacity of 450,000 20-foot-equivalent-units (TEUs, referring to the dimensions of a standard shipping container) were waiting to berth in Singapore. This caused some liners to drop plans to call at the country as originally scheduled.

CMA CGM is one of those omitting Singapore as a port of call; at least two of its vessels have done so on the grounds of “schedule recovery”, according to its client advisories dated May 24 and May 27.

In the past, some liners would catch up on their schedules in Singapore, such as when the Suez Canal was blocked for almost a week by the container ship Ever Given that ran aground, and when China’s Yantian port was temporarily closed during the pandemic in 2021.

Vessels bunching

Responding to questions from The Business Times, the Maritime and Port Authority of Singapore (MPA) said that Singapore has welcomed significantly more vessels since the start of this year, when the diversion from the Red Sea to South Africa led to off-schedule arrivals and the bunching of vessels.

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Container volumes handled in Singapore from January to April amounted to about 13.4 million TEUs, up 8.8 per cent year on year.

MPA said: “The increased demand on container handling in Singapore is a result of several container lines discharging more containers in Singapore as they forgo subsequent voyages to catch up on their next schedules. The number of containers handled per vessel has also increased.”

Operator PSA has increased manpower and container handling capacity to alleviate the situation, for example, by reactivating older berths and yards at Keppel Terminal.

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MPA noted the average waiting time for container vessels is about “two to three days” and that there was currently “no crowding in the anchorages”.

But Global Airfreight International, which handles both air and sea cargo as a forwarder, said 70 per cent of its ocean shipments have been delayed as a result of the port congestion in Singapore. It added that not only were incoming shipments being held up, outgoing ones were being pushed to a later date because some liners had diverted from Singapore.

Faisal Roslan, senior manager for business development and aviation at Global Airfreight, told BT that a vessel was scheduled to pick up shipments on Thursday (May 30), but decided to skip Singapore.

The next vessel is not due to arrive for another week.

This delay has run up storage costs on top of the disruption to the shipment schedule.

“Of course, (customers) are not happy, but they know that it’s not the forwarder’s fault,” he said.

S&P Global Commodity Insights told BT last week that major ports in South-east Asia and China, such as Singapore, Port Klang, Shanghai and Ningbo, have experienced severe congestion since early May.

S&P Global attributed the piling up at major ports in South-east Asia and China to the increase in transit times caused by the Red Sea crisis and Panama’s earlier restrictions on vessel numbers because of its low water level.

Yemen’s Houthi rebels began attacking merchant vessels near the Red Sea last November, forcing major carriers plying between Asia and Europe to take an extended route around the Cape of Good Hope off South Africa, instead of the shorter one through the Red Sea.

The far-longer route has upset these vessels’ punctuality and schedules.

There has been another knock-on effect of these upset schedules: Because of the longer-than-normal transit times and the rapidly-rising sea freight rates, shippers are pushing cargo for earlier departures to avoid increasing freight costs.

Many companies are also changing their strategy – by accepting higher stock levels, fearing the even-more-costly stock-outs that many of them faced during the pandemic. These higher stock levels have created an unnatural spike in demand.

HSBC Global Research flagged that the US’ impending tariff increases on certain China imports are also driving some of this front-loading.

A Ministry of Trade and Industry spokesperson told BT that Singapore does not expect major disruptions to food and essential supplies, despite the port congestion and delays.

While customers have not yet taken to shipping their freight by air because their shipments are bulky, Faisal foresees that some would eventually have to use the more expensive mode. 

Air carriers have raised their freight rates as well, as the space they have is quickly being filled, he noted. At least one airline has introduced premium rates for prompt shipping.

Those who do not want to pay this premium will have to wait two weeks for capacity to become available.