According to sources, the diversion of vessels around the Cape of Good Hope has created significant disruptions in global shipping schedules, resulting in a “vessel bunching” effect where multiple ships arrive at ports simultaneously.
Key Points:
- Port Congestion Dynamics:
- Peak and Easing: Port congestion peaked in May 2024 but eased in June. This is partly due to improvements in port operations and adjustments in shipping schedules.
- Global Impact: Congestion affected major global hubs, leading to delays and detours. The Red Sea threats and subsequent diversions via the Cape of Good Hope added to the congestion, soaking up around 5-6% of global fleet capacity.
- Container Ship Availability:
- Tight Supply: Container ship availability remains extremely tight, with many vessel size classes showing zero availability for spot or prompt charters. This scarcity has driven up charter rates dramatically, with some rates exceeding USD 100,000 for short fixtures.
- Fully Employed Fleet: The global box ship fleet is almost entirely employed, reflecting strong demand despite economic challenges.
- Supply Chain Strategies:
- Front-Loading: Anticipating future supply chain strains, major cargo owners have resorted to front-loading, moving goods earlier than planned to build warehouse buffers in Europe and the Americas. This has led to unusually strong demand for this time of year.
- Specific Port Actions:
- Singapore’s Measures: The Maritime and Port Authority of Singapore reported a 7.7% increase in container volumes from January to May year-on-year. To address congestion, PSA reactivated berths at the Keppel Terminal and accelerated the commissioning of new berths at the PSA Tuas Phase 1 Terminal.
- Operational Changes: Despite the reactivation and new berths, some improvements were due to carriers rescheduling services and skipping Straits calls to avoid delays.
- Transshipment and Terminal Utilization:
- Increased Volumes: Transshipment volumes have surged in Straits hubs like Singapore, Tanjung Pelepas, and Port Kelang due to deviations from Middle Eastern ports like Jebel Ali, Salalah, Jeddah, and King Abdullah.
- Productivity Impact: The increase in transshipment containers and less stable sailing schedules have strained terminal productivity, leading to longer waiting times.
This has been particularly noticeable in Singapore, where vessel arrivals have surged since the beginning of 2024. To address this challenge, several measures have been implemented by Singapore’s Ministry of Transport (MOT), the Maritime and Port Authority of Singapore (MPA), and PSA Corporation, which operates the major container terminals.
Measures Taken to Alleviate Port Congestion in Singapore:
- Increased Manpower and Capacity:
- Reactivation of Older Berths: PSA has reactivated older berths and yards at Keppel Terminal that had previously been decanted. This has helped increase container handling capacity.
- Additional Handling Capacity: As a result of these efforts, PSA can now handle 820,000 TEUs weekly, up from the previous capacity of 770,000 TEUs.
- Expansion of Tuas Port:
- New Berths: In addition to the eight existing berths, three new berths at Tuas Port are set to commence operations later this year. This expansion is part of PSA’s plan to increase overall port handling capacity significantly.
- Accelerated Commissioning: PSA is accelerating the commissioning of these new berths to quickly boost container handling capacity.
- Coordination and Communication:
- Berth Availability Updates: MPA and PSA are working closely with container lines and regional feeders to keep them informed about berth availability. This includes advising on arrival times to minimize delays in berthing.
- Industry Collaboration: Since late 2023, MOT and MPA have been collaborating with PSA and the shipping industry to prepare for the higher volume of vessel arrivals. This proactive approach has been essential in managing the increased traffic efficiently.
Impact of Measures:
The combined efforts have led to a noticeable improvement in handling the increased vessel arrivals and mitigating congestion. By adding manpower, reactivating older infrastructure, and accelerating new developments, Singapore’s port authorities have been able to better manage the surge in traffic. The communication and coordination with shipping lines ensure that delays are minimized, and operations remain as smooth as possible despite the challenges posed by off-schedule arrivals and vessel bunching.
Strategic actions by ports like MPA in Singapore, along with operational adjustments by shipping companies, are helping to alleviate some of the pressures. However, ongoing threats and demand fluctuations will likely continue to shape the landscape in the near future.
