Port congestion resulting from the impact of the Red Sea diversions is now adding to delays and disruption to sea freight services.
Shipping demand on the Asia-Europe routes has surged just as service reliability has declined due to rerouting vessels to avoid the Red Sea. Insufficient capacity exists to accommodate ships taking longer routes. This has led to increasing congestion at origin ports, further worsening delays and disruptions to sea freight services.
Capacity Challenges Driving Up Rates
Increased demand and the ongoing Red Sea crisis has required additional vessels on the Asia-Europe shipping lane. Space constraints, caused by vessels deviating from schedules and returning late to origin ports, has led to longer rotations and impacted outbound traffic from Asia. Carriers are deploying extra ships via the Cape of Good Hope, while delays in Europe due to increased cargo volumes have further reduced market capacity. This combination continues to drive up sea freight rates, now reaching their highest levels since 2021.
Significant Pressure at Ports
Vessels are regularly arriving at ports on unscheduled days, leading to berthing clashes. The off-schedule arrival of vessels is causing a buildup of cargo. Port congestion in Asia seems to be worsening, leading to significantly longer waiting times at ports, creating a knock-on effect leading to pockets of equipment shortages in China, Taiwan, Cambodia and Thailand. Equipment availability is becoming increasingly tight and varies daily based on vessel arrivals and the discharge of empty containers. All of these factors impact schedule reliability and, as such, schedule integrity remains compromised.
Severe Congestion at Singapore Port
Congestion at Singapore, the world’s second-busiest container port, has reached a critical level, worsening the shortage of ships and containers. Ships are facing waits of up to seven days to berth. This severe congestion has compelled some carriers to skip their scheduled port calls in Singapore, exacerbating the issue at subsequent ports that must now handle additional volumes. The congestion in Singapore significantly impacts the reliability of Asia-Europe services as delays result in congestion and schedule disruptions at downstream origin ports. We can anticipate even greater delays than what we are currently experiencing, given the ripple effect on the supply chain caused by congestion and schedule disruptions at downstream origin ports.
Outlook
The traditional peak season has begun earlier than usual, consequently, we expect demand to further increase in the coming months. We are entering a period of uncertainty, with port congestion expected to worsen and significantly longer transit times anticipated. While we anticipate delays and frequent schedule adjustments, we are committed to minimising disruptions and will provide regular updates to ensure you stay informed.
Should you have any questions or concerns about your shipment, please get in touch with our Customer Service Team on 01376 533039.
