The congestion at Singapore's container ports is the worst it has been since the COVID-19 outbreak. This is a result of prolonged vessel rerouting in order to avoid Red Sea attacks, which has caused global ocean shipping to be disrupted. Bottlenecks have also appeared in other Asian and European port.

Retailers, manufacturers, and other industries who rely on huge box ships face surging rates, port backlogs, and shortages in empty containers. This is happening as consumer-oriented companies look to stock up for the busy holiday shopping season.

Linerlytica, a maritime data company, reported this month that global port congestion had reached an 18-month peak, with 60% waiting ships at anchor in Asia. As of mid-June, ships with a capacity of more than 2.4 million 20-foot equivalent containers (TEUs), were waiting in anchorages.

Ports are not being flooded by a flurry of purchases from housebound consumers, as they were during the pandemic.

Ship timetables have been disrupted by missed sailings and fewer ports calls as vessels travel longer routes around Africa in order to avoid the Red Sea where Yemen's Houthi Group has been attacking ships since November.

To meet schedules, ships are offloading large amounts of cargo at once in transhipment hubs such as Singapore. Cargoes are then unloaded, reloaded, and transferred to other vessels for their final leg.

"(Shippers are) trying to manage the problem by dropping the boxes in transhipment hubs," Jayendu Krishna said, the deputy head of Singapore-based Drewry Maritime Advisors.

"Singapore and other hubs have seen liners accumulating boxes."

Drewry reported that the average Singapore cargo offloading volume increased by 22% between January to May, affecting port productivity significantly.

CONGESTION SEVERE

Singapore, the second largest container port in the world, has experienced particularly heavy congestion over recent weeks.

Singapore's Maritime and Port Authority said that the average wait time for berthing a container vessel was between two and three days. Container trackers Linerlytica and PortCast also said that delays could last as long as a week. Berthing usually takes less than a single day.

As some ships bypass Singapore, they are also causing congestion in neighbouring ports.

Linerlytica reported that the strain is now on Malaysia's Port Klang, Tanjung Pelepas and other ports in Malaysia. In China, wait times are also increasing, especially at Shanghai and Qingdao.

Drewry anticipates that congestion will remain high at the major transhipment port, but expects to see some relief as carriers increase capacity and restore schedules.

Singapore's MPA announced that the port operator PSA reopened old berths and yard at Keppel Terminal, and will open more berths in Tuas Port.

Maersk, second largest container carrier in the world, announced this month that it would cancel two sailings westbound from China and South Korea at the beginning of July, due to heavy congestion in Asian and Mediterranean port.

PEARL SEASON

Shippers and research firms say that the annual peak shipping season arrived earlier than expected. This has exacerbated port congestion.

Niki Frank said that this is due to customers restocking goods, especially in the U.S. and shipping early in anticipation of a stronger demand.

Container rates have risen, increasing the risk that buyers will face another round of price hikes, similar to the inflation spike after the pandemic, which central banks still try to control.

The rates had stabilized into April, but the Asia-focused freight forwarder Dimerco reported that in May, "there was an increase in ocean freight of Chinese ecommerce, electric cars, and renewable energy related goods".

The peak season which starts traditionally in June was advanced by one month. This caused ocean freight rates skyrocket.

Descartes, a data provider, reported that container import volumes at the 10 biggest U.S. ports rose by 12% in May, fueled by the second highest monthly import volume since January 2023.

Jonathan Gold, vice president of the National Retail Federation, said that "U.S. consumers continue to spend more money than they did last year and retailers are stocking to meet demand."

Judah Levine, of Freightos, said that ocean imports from Asia into Europe are also showing signs that a restocking season is running into peak seasons - pushing prices to 2024 highs.

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

Xeneta, a freight platform, said that rates from Asia and Singapore into the U.S. East Coast have reached their highest levels since September 2022. Rates to the U.S. West Coast, meanwhile, are at the highest level since August 2022.

Some industry players believe that the U.S. importers who rush to buy Chinese products such as medical and steel, which will be subjected to steep tariff increases from August 1, are a part of the cause for the bottlenecks in China ports.

Jared Bernstein is the chair of the Council of Economic Advisers.

Gene Seroka is also expecting a limited effect. He is the executive director of Port of Los Angeles - the U.S.'s largest gateway for ocean imports from China.

He said that while some of the cargo may arrive, it won't be a flood.

DHL says that German port strikes are adding to the gridlock.

Experts warn that all of these disruptions could lead to higher prices for consumers.

Peter Sand, chief economist at Xeneta, said: "These are enormous financial hits that shippers will have to absorb."