Port congestion worries operators

Port congestion worries operators
Port congestion worries operators

An article from Ports and Corridors. The containerization market is heating up. While since the beginning of the year, more than 1.6 MEVP of capacity have been put on the market by the arrival of new ships, the lack of ships remains, indicates Linerlytica in its latest weekly report. These entries into the fleet are not enough to meet demand.

An increase in capacity

The reason is mathematical. On the one hand, the market is entering the peak season. Distributors start their supplies for the end-of-year holidays as early as June. Out of Asia, and more particularly China, ships are often full. However, the Houthi attacks are forcing shipowners to divert via the Cape of Good Hope. Under these conditions, maintaining weekly services requires shipping lines to increase their capacity.

A shortfall of 500,000 TEUs

In this context, the diversion of ships has reduced the fleet capacity by 1.6 TEUs, Linerlytica continues. The addition of new capacities could have compensated for the diversion of ships. This was without taking into account port congestion. Indeed, the “traffic jams” in front of the ports remove around 500,000 TEUs from the market. Linerlytica estimates at 2.5 TEUs, or 8.4%, of the world fleet, the number of containers blocked by port congestion. In the end, several thousand containers are missing to return to a balance between supply and demand.

Port hubs are becoming congested

To restore schedules, shipowners are concentrating their operations in hubs. So, “containers are piling up in transhipment ports,” says Jayendu Krishna, deputy director of Drewry’s Singapore office. Do the numbers speak for themselves? From January to May, Singapore traffic increased by 22%. This increase in traffic also means longer waiting times for shipping lines. Some ships are waiting up to a week before unloading.

Congestion that spreads like wildfire

To overcome this problem, shipping lines are trying to shift some of their traffic to other ports such as Port Klang and Tanjung Pelepas. As a result, the congestion in Singapore is now being shifted to other ports in the region. Especially since the phenomenon is spreading to China with waiting times of several days in Shanghai and Qingdao. Faced with this situation, the Singaporean handler, Port of Singapore Authority, has decided to recommission abandoned quays such as those in Keppel.

Port congestion is present on every continent

This congestion affects all continents. Linerlytica counted 36 ships waiting on June 26 in Rotterdam. In Antwerp-Bruges, this number rises to 16. It is nine ships in Valencia. In front of Haropa Port, five ships are waiting. For the record, 49 ships are waiting in front of Singapore on the same date and 26 in Port Klang. This waiting in front of the ports that observers have often described as a “mainly African concern” is occurring worldwide.

What if the strike affects ports on the US East Coast?

How long will these disruptions affect the maritime and port world? Some explain that with the end of the Houthi attacks, the market could return to normal. However, without international military intervention, it seems unlikely that the situation in the Bab el Mandeb Strait will improve on its own. Finally, another threat looms over the port world. The threats of social unrest in the ports of the East Coast of the United States could aggravate this phenomenon.

© An article from the editorial staff of Ports and Corridors. Reproduction prohibited without the consent of the author(s).

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