Key transhipment ports, such as Singapore, have witnessed a sharp rise in congestion due to the impact of Red Sea carrier service diversions, which have led to fewer vessel calls but larger average exchanges. This has added to yard congestion.
Port productivity has also taken a hit in recent months. The time spent by ships waiting before berthing at high-volume ports tracked by Drewry increased 43% between 3Q23 and 2Q24 – to over 400,000 hours.
Singapore is in a microcosm of transhipment ports around the world, where changes to carrier service patterns in response to the Red Sea crisis, have wrought havoc to container terminal operations. It is experiencing a density of shipping containers in their terminals close to the records of the pandemic period.
In the five months to May throughput at the port grew 8% YoY, representing a strong start to the year but not enough on its own to challenge existing handling capacity.
However, the rerouting of container vessel services away from the Red Sea in response to the Houthi attacks on shipping resulted in a 22% increase in average parcel sizes in the period between January and May, according to Drewry’s Ports and Terminals Insight, with a significant knock-on impact for port productivity.
Drewry estimates that the average time taken to handle 1,000 teu rose 10% over this period to 0.32 days, meaning that the average time to complete the recently enlarged exchanges for a typical ULCV (>18kteu) leapt 41%, from 1.1 days in January to 1.7 days in May.
The port congestion we are seeing today differs from that of the pandemic period. Back then systemic supply chain disruption primarily impacted gateway ports due to the combined effect of unexpectedly high cargo demand and inland transport congestion.
However, this current crisis is hitting transhipment hubs as carriers have made major changes to individual exchanges handled at these hubs.
Meanwhile, aligning mainline-mainline vessel transfers has proved difficult due to the high number of blank sailings, while aligning mainline-feeder services has been affected due to congested yards, off-window arrivals and prioritising mainline vessels over feeder vessels.
Drewry expects congestion at major transhipment ports to remain high, but some easing is anticipated as carriers add more capacity and restore some of their disrupted schedules.
Source: Drewry