Port congestion grapples the container markets

According to a new report from Bank of America, the container vessel supply has worsened due to port congestion since March and the major congestion hotspots are Singapore, Dubai and the Mediterranean. The report mentions that the berthing delay at the world’s second-largest container port is extending up to seven days.

The severe cramming at the port has forced several carriers to omit their planned Singapore port calls, as the problem is worsening and the downstream ports have to manage the additional volumes. The delay is the cause of vessel bunching.

Shanghai and Qingdao are also experiencing similar build-ups of anchored boxships and the world’s largest container port is now at three-year highs. Commenting on the situation HSBC stated that such inefficiencies in cargo movement have led carriers to omit regional calls and blank sailings on longer haul routes to restore schedule reliability, further reducing the already tight capacity.

Likely disruptions can be seen in ports in Northern China that are beginning to experience overcrowding caused by container availability issues due to a combination of Red Sea-related disruptions (containers are on the water for longer) and build-ups of empty containers in ports where they are not needed, stated the latest subscription from S&P Global Market Intelligence.

The port congestion in Asia and the sudden surge in demand are now leading to even more capacity being used up. This is a capacity that the market does not have. Analysts at Sea-Intelligence suggested in their latest weekly report that carriers are blanking sailings not to restrict capacity, but simply because they do not have free vessels to maintain weekly services when vessels get stuck in congestion.