Box prices in Singapore have swelled 26% in the six months up to May this year according to Container xChange figures as congestion spreads globally adding demand for boxes.
The situation at some major ports has become increasingly strained with carriers omitting port calls at some of the world’s busiest and most significant terminals in Hong Kong, Ningbo Singapore and Shanghai, said the online infrastructure provider.
Prices for a 40ft high cube container increased from $1,499 in October to $1,890 by May reflecting the effects of the Red Sea crisis and the spreading disruption that has resulted from the Middle East conflict.
Related: Red Sea rerouting causing Asian port congestion
“This situation is anticipated to persist into June and beyond, driven by a confluence of factors including vessel bunching, disrupted global shipping schedules, and heightened demand for container handling capacity. Persistent congestion at a key hub like Singapore can impact global trade flows, affecting the movement of goods between Asia, Europe, and the Americas,” explained Christian Roeloffs, cofounder and CEO of Container xChange.
Xeneta Chief Analyst Peter Sand said that the disruption in the Red Sea has seen the bunching of large ships arriving in Europe, the ports were unable to cope with the levels of cargo being discharged causing delays, and that backed up to Singapore and Shanghai.
Related: Maersk ups full year earnings forecast as port congestion grows
“Ports and terminals are better at handling more calls with less cargo, giving an even flow of freight, rather than the high volumes from jumbo container ships,” said Sand.
Congestion at key ports means increased waiting times and that leads to much greater emissions, which will become an increasingly major factor in the cost of shipping within this decade.
A major element of GHG in ports is the vessels waiting at anchor for berthing slots, according to Drewry Shipping Consultants. One solution would be to utilise just in time arrival systems that slow ships down to save fuel and prevent congestion.
Drewry analysed waiting times at 193 ports around the world and found that pre-berth waiting times were 40% higher last year than in 2019.
“Despite a recovery from the supply chain disruptions incurred during the pandemic, a significant number of vessels have continued to operate on the basis of ‘sail-fast-then-wait’ which results in the earliest arrival time at the port, no matter whether a berth is available or not,” reported Drewry.
The consultant analysed the bottleneck at Dar es Salaam, where vessels could wait at anchor for over a week for a berth, accounting for 70% of the total waiting time at the port, which totalled 2,000 days last year.
“We looked at what effect reducing the average speed on the inbound voyage would have on time spent in the port’s anchorage zones (speed reduction only applied to vessels incurring eight hours or more of waiting time upon arrival at the port). The results indicated that capping average inbound voyage speed to 10 knots during congested periods would have generated waiting time savings of 31% – equivalent to 23,000 CO2eq of emissions. A more conservative scenario whereby average inbound voyage speed was capped at 12 knots generated waiting time savings of 16% (or 11,800 CO2eq).”
The steadier cargo flow would have had extra efficiencies on inland connections, reducing congestion and improving the overall performance of the supply chain.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
