Another problem with sea transportation!

With the escalation of the Red Sea crisis and the continued rise in demand, the global capacity tension has become more serious, resulting in a sharp increase in freight rates on many routes, and companies are facing huge pressure from lack of space and containers. Today, the tight supply of ships and containers has spread to ports, making the entire logistics chain feel more stressed.

According to the latest report released by Bank of America, global port congestion has significantly increased since March this year, directly resulting in a reduction of more than 2% in the supply of container ships. Currently, Singapore, Dubai and the Mediterranean region have become the main focus of congestion problems, while the supply of container space in Asia continues to be tight.

According to Linerlytic data, Singapore Port, as the world's second largest container port, currently has a backlog of nearly 500,000 TEUs, a figure far exceeding the historical high during the outbreak of the new crown epidemic. What's more serious is that the delay time for port berthing has been extended to 7 days, which has brought great challenges to the global shipping industry.

It is understood that port congestion in Asia is particularly serious, with Southeast Asian ports accounting for 26% of global port bottlenecks and Northeast Asian ports accounting for 23%. This shows that port transportation in Asia faces huge challenges.

In addition to hotspots such as Singapore and the Mediterranean, many Asian ports such as Shanghai, Qingdao, Port Klang and Colombo have also experienced varying degrees of congestion. It is worth noting that as the world's largest container port, the dwelling time at Shanghai Port has reached the highest level in nearly three years!

This long wait has forced some shipping companies to cancel their original plans to call at Singapore and choose other ports instead. However, this change may lead to a sharp increase in cargo volume at downstream ports, causing further delays and congestion.

More seriously, the congestion at the Singapore port could have a chain reaction, leading to congestion at ports in other regions and disrupting original shipping plans. The congestion could accelerate the implementation of the GRI (General Rate Increase Surcharge) announced by shipping companies and could further push up freight rates.