The ongoing port congestion at Singapore and other major transshipment hubs

In November 2023, over 60 vessels were attacked in the Red Sea, leading shipping lines to re-route hundreds of ships via the Cape of Good Hope to avoid further attacks and ensure the safety of vessels and crews. Nine months later, shipping lines still avoid the Red Sea and Suez Canal. This detour has extended sailing times by an average of 14 days between Europe and Asia.

The long-term effects are evident as port congestion increases from the Mediterranean to major hubs such as Singapore, Shanghai, Shenzhen, and Port Klang.

These longer routes have severely disrupted timetables, causing missed sailing schedules and fewer port calls as carriers try to make up lost time.

Consequently, more containers are being offloaded at major hubs such as Singapore, adding pressure to already strained ports. This has led to longer wait times for containers at ports as carriers work to prioritise the additional cargo from Europe onto standard voyages to move through to their final destination.

As we enter the peak season, global port congestion has reached an 18-month high. Currently, 60% of ships waiting to anchor are located in Asia, with vessels waiting an average of 3-4 days to berth.

The peak season started earlier in 2024 due to a heightened demand for goods and an anticipation of shipping delays, further exacerbating the problems caused by the Red Sea situation. Delays of 3-4 weeks are expected at major hubs like Singapore. These issues have also affected neighbouring hubs like Por Klang, as many tried to avoid Singapore earlier in the disruption.

There is little capacity to add more vessels to clear the backlog, with idle tonnage at just 0.7%, meaning nearly all available vessels are in use. This situation is challenging to manage, and finding practical solutions is crucial. It’s important to plan for additional transit time when estimating lead times and to consider direct sailings where possible.

It is difficult to predict when the situation might improve. The resolution largely depends on the Red Sea situation and whether normal services can resume or an equilibrium is found with the longer transits. We anticipate some improvement in October as the peak season ends, but it’s essential to remain vigilant and allow extra time in your supply chain for these delays.