Congestion at Singapore’s container port is at its worst since the COVID-19 pandemic, a sign of how prolonged vessel re-routing to avoid Red Sea attacks has disrupted global ocean shipping—with bottlenecks also appearing in other Asian and European ports.

Retailers, manufacturers and other industries that rely on massive box ships are again battling surging rates, port backups and shortages of empty containers, even as many consumer-oriented firms look to build inventories heading into the peak year-end shopping season.

Global port congestion has reached an 18-month high, with 60% of ships waiting at anchor located in Asia, maritime data firm Linerlytica said this month. Ships with a total capacity of over 2.4 million twenty-foot equivalent container units (TEUs) were waiting at anchorages as of mid-June.

But, unlike during the pandemic, it is not a buying flurry by house-bound consumers that is swamping ports.

Rather, ship timetables are being disrupted with missed sailing schedules and fewer port calls, as vessels take longer routes around Africa to avoid the Red Sea, where Yemen’s Houthi group has been attacking shipping since November.

Ships are therefore offloading larger amounts at once at big transhipment hubs like Singapore, where cargoes are unloaded and reloaded on different ships for the final leg of their journey, and forgoing subsequent voyages to catch up on schedules.

“(Shippers) are trying to manage the situation by dropping the boxes at transhipment hubs,” said Jayendu Krishna, deputy head of Singapore-based consultancy Drewry Maritime Advisors.

“Liners have been accumulating boxes in Singapore and other hubs.”

Average Singapore cargo offload volume jumped 22% between January and May, significantly impacting port productivity, Drewry said.

Severe congestion

Singapore, the world’s second-largest container port, has seen particularly severe congestion in recent weeks. The average wait time to berth a container ship was two to three days, Singapore’s Maritime and Port Authority (MPA) said in end-May, while container trackers Linerlytica and PortCast said delays could last up to a week. Typically, berthing should take less than a day.

Neighbouring ports are also backing up as some ships skip Singapore.

The strain has shifted to Malaysia’s Port Klang and Tanjung Pelepas, said Linerlytica, while wait times have also climbed at Chinese ports, with Shanghai and Qingdao seeing the longest delays.

Drewry expects congestion at major transhipment ports to remain high, but anticipates some easing as carriers add capacity and restore schedules.

Singapore’s MPA said that port operator PSA had re-opened older berths and yards at Keppel Terminal and would open more berths at Tuas Port to tackle extended waits.

Peak season

The annual peak shipping season has also arrived earlier than expected, exacerbating port congestion, shippers and research firms said. This seems to be driven by restocking activities, particularly in the U.S., and by customers shipping goods early in anticipation of stronger demand, said Niki Frank, CEO of DHL Global Forwarding Asia Pacific.

Container rates, meanwhile, have surged, raising the risk of another spate of price increases for buyers like the post-pandemic inflation spike which central banks are still trying to tame. Rates had stabilised into April but in May “there was a significant increase in ocean freight exports of Chinese e-commerce, electric vehicles, and renewable energy-related goods,” Asia-focussed freight forwarder Dimerco said.

“The peak season, which traditionally starts in June, was advanced by a full month, causing ocean freight rates to soar.”

Container import volume at the 10 largest U.S. seaports in May rose 12%, fuelled by the second-highest monthly import volumes since January 2023, said data provider Descartes.

“(U.S.) consumers are continuing to spend more than last year, and retailers are stocking up to meet demand,” said Jonathan Gold, a National Retail Federation vice president.

Ocean imports into Europe from Asia are also showing signs of a re-stocking season running into peak season—pushing rates to 2024 highs, Judah Levine of freight platform Freightos said.

Container freight prices from Asia to the U.S. and Europe have tripled since early 2024.

Some industry players think part of the reason for the bottlenecks at China ports is fuelled by U.S. importers rushing to buy Chinese goods such as steel and medical products that will be subject to steep tariff hikes from Aug. 1. But newly imposed U.S. tariffs would affect only about 4% of Chinese imports to the U.S., said Jared Bernstein, chair of the Council of Economic Advisers.

Concerns about possible strikes at U.S. ports this year could also be pulling the peak season forward, while DHL said German port strikes were adding to the gridlock.

All of those disruptions will likely mean higher prices for consumers, experts warn.

Cairo:

A Panama-flagged crude oil tanker caught fire after being struck by an unidentified projectile off Yemen on Saturday, in the latest attack on commercial shipping in the Red Sea.

The incident happened 23 nautical miles northwest of the Red Sea port of al-Mukha, British maritime security firm Ambrey said.

The United Kingdom Maritime Trade Operations (UKMTO) agency also reported the incident, saying the fire was extinguished by the crew.

“Vessel and crew reported safe. Vessel continuing to next port of call,” UKMTO added in an advisory note.

Ambrey said the tanker was registered under Union Maritime Ltd, a UK company, in 2019 before changing its registration details, including name and operator, last month.

“At the time of writing, she had changed course to starboard and continued on her journey to New Mangalore, India,” the Ambrey statement said.

Months of attacks in the Red Sea by Yemen’s Houthi operatives following the Israel-Hamas war have disrupted global shipping, forcing firms to re-route to longer and more expensive journeys around southern Africa, and stoked fears that the war could spread to destabilise the wider Middle East.

The Houthis say their attacks are in solidarity with the Palestinians in Gaza and they will not stop until Israel ends the war and withdraws from the enclave.

The United States and Britain have launched strikes on Houthi targets in Yemen and redesignated the militia as a terrorist group.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)