Urgent! Congestion in the three major ports! Interfering with $131 billion in trade!
The Russell Group, a data and analytics firm, reported that continued congestion at the ports of Singapore, Klang and Tanjong Parapas has the potential to disrupt trade worth $131 billion.
All three ports have faced severe port congestion since mid-June. Ships have been diverted because of Houthi attacks in the Red Sea.
Ships that were diverted either arrived later than planned or used the port as an alternative, resulting in severe queues at the port.
Due to its size and proximity to the Strait of Malacca, Singapore has become a hub for many shipping, resulting in a large number of ships queuing to enter the port.
For the Port of Singapore, about 90 per cent of container ships did not arrive on schedule, up from an average of 77 per cent last year.
In addition, the duration of port visits increased by 22% compared to the same period last year. This is due to increased demand and container reloading, with an increase in the number of containers handled per ship call.
Considering the port of discharge, weight and stability of the ship, some containers must be removed from the ship to make room for others, which are later loaded back on board.
These factors have caused ships to wait for berthing time to increase, in order to avoid the queue, many shipping companies choose to dock at the nearby Malaysian ports of Port Klang and Tanjong Parapas, which have also experienced congestion.
In response to today's severe congestion, PSA Singapore has restarted the old berths and terminals that were once decommissioned at Keppel Terminal, and increased manpower resources in parallel to address the pressing issue of container backlogs.
It is reported that this move will allow the number of containers that the port can handle per week to jump from the original 50,000 TEUs to 820,000 TEUs.
In addition, in order to further improve the efficiency of port operations, Singapore University Port plans to put into operation three new berths on the basis of the existing eight berths later this year, to further expand the processing capacity, ensure smooth operation of the port, and effectively alleviate the current congestion pressure.
The ports were analyzed from June 12 to August 12, with the worst port congestion in mid-June and the earliest possible easing in August.
Further analysis by ALPS Marine, a Russell company, suggests that commodities such as crude oil ($7.3 billion) and integrated circuit boards ($11 billion) are most likely to be affected by port delays.
The trade volume of these ports is broken down as follows:
Singapore ($89.5 billion)
Port Klang (US $22.7 billion)
Tanjung Palapas Port ($19.5 billion)
Commenting on the figures, Suki Basi, Managing director of the Russell Group, said: "These figures published by the Russell Group today show that port congestion is once again an issue that is causing concern for businesses and insurers.
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Port congestion has previously been linked to COVID-19. This time, the aftermath of the Red Sea attack has exacerbated port congestion, with vessels using alternate ports such as Singapore, Port Klang and Tanjung Palapas to unload their cargo, causing significant delays."
He further noted that if this demand spreads to other ports, especially when businesses start ordering for the upcoming fall holiday season, businesses may have difficulty sourcing cargoes.
Sea-Intelligence recently reported that despite high demand and high freight rates, widespread port congestion has forced shipping companies to cancel flights, leading to a shortage of ship capacity.
