In the meantime, a de-escalation of tensions between Israel and Iran might redirect focus to the trade war
A “brutal slowdown” in port operations due to delayed vessel calls is unfolding as the northern hemisphere summer progresses. According to maritime, port, and logistics industry analyst Jon Monroe, this is happening “because vessels are arriving later than ever”. In this regard, he highlights that Sea Rates found global ports experienced a staggering 300% increase in delays during the first half of June, affecting nearly 96% of the world’s major ports.
He notes that the current situation is the result of “a toxic mix of erratic vessel schedules, terminal congestion, blank sailings, bad weather, geopolitical shocks, and terminals holding containers much longer than usual, all conspiring to disrupt the punctuality of sailings and calls”.
With delays in vessel calls stretching from 48 to 72 hours and, sometimes even several days more. Singapore, Rotterdam, Savannah, Vancouver, and Cape Town have become the top five hotspots for this kind of “invisible port congestion” worldwide.
Meanwhile, China is experiencing a more conventional type of congestion, where in the ports of Qingdao and Ningbo vessels have faced waits of up to 72 hours for a berth due to weather disruptions and vessel build-ups. In Shanghai, ships have faced delays of up to 60 hours waiting to dock.
But, according to Monroe, “here is the surprising part”: while ports struggle to manage the pressure of delays, vessel space departing from China has suddenly become abundant and booking activity is dropping day by day. As a result, “rates are falling as importers realize there is no longer a need to panic and demand is deflating just as capacity is expanding”.
Summing up the situation, he states: “Yes, docks may be empty of ships waiting to berth, but that doesn’t mean business is flowing smoothly. Delayed vessels are shaping the narrative of the [northern hemisphere] summer, squeezing margins, extending supply chains, and leaving ports on pause when they should be operating at full speed”.
Meanwhile in Iran…
What has come to be called the “Twelve-Day War” between Israel and Iran, later joined by The U.S, brought with it the prospect of the worst-case scenario for an already strained shipping industry: the closure of the Strait of Hormuz. However, on the afternoon of June 23, Donald Trump announced a ceasefire between Israel and Iran. Still, the situation remained critical, as air and missile attacks between the two countries continued at the time of the announcement. By the close of this edition, the ceasefire appeared to be more solid, though the fragility of the agreement was evident.
Various analyses consider a total closure of the Strait by Iran unlikely. Iran tends to use this threat as a political bargaining tool, since carrying it out would effectively lock in its own crude production and also harm its main trading partners, including China, Oman, Qatar, and India.
Judah Levine, head of research at Freightos, points out that even during the conflict, the flow of tankers through the Strait of Hormuz remained generally normal, as did operations at Jebel Ali port in Dubai, the main regional transshipment hub, critical for maritime and air container transport from the Far East on to Europe and North America.
Meanwhile, in Israel, the ports of Haifa and Ashdod also remained operational throughout, and Freightos did not report container rate instability on Israeli routes, although some carriers did divert their calls from Haifa to Ashdod.
Focus returns to the trade war
Thus, with the possible easing of the Middle East crisis and its implications for trade, attention is once again shifting to the trade war between The U.S and China and the imminent expiration of the tariff suspension.
“Aside from China, countries facing the reciprocal U.S tariffs announced in April only have until July 9 to reach agreements or face potential tariff hikes”, Levine reminds.
Source: Mundo Marítimo
