Reactivating the Old Gears - Signs of Severity
The Container Terminals Operator in Singapore, PAS, announced at the end of May 2024 that they would reopen the old berths at Keppel Terminals. The yards were closed as part of the country's ports and terminals consolidation project. The new relocation site is expected to be operational by 2027. Reopening the berths was a response to terminal congestion in Singapore's second busiest container port in 2023: the country handled 39 million TEUs, second only to Shanghai's 49 million. By May 2024, the Global Port Congestion Indicator will reach 2 million TEU (6.8% of global fleet capacity); containers going to Singapore face 7 days of berthing delay on average; in other words, vessels with 450,000 TEU stacked outside Singapore waiting for offloading. In addition to Singapore, other major ports such as Shanghai were experiencing similar problems. During Covid-19, this global shipping congestion was the most severe after the congestion at US ports in 2021-22.
Not Just Longer Voyage Time, Â Vessel Bunching As WellÂ
Houthis' Red Sea Attack Threats were considered the primary reason for the detours on the Europe-Asia route. However, there are more complex causes for the current situation. The profitability of Fleet Management companies and Liners is highly dependent on operational efficiencies, such as turnovers and on-time delivery; therefore, well planned routes and schedules of port calling (including off-charter for dry docking maintenance) are vital. For competitiveness, route and schedule planning cannot be done just months in advance, but can happen years in advance. For voyages detouring from Suez Canal route to the Cape of Good Hope, the extra 2 weeks of sailing time began to create pressure on ship companies and increase costs and capacity losses. Due to schedule delays, Liners skipped ports of call and containers were kept at transshipment ports. Having been the main transshipment hub in the region, Singapore became a natural choice for container storage, resulting in extra workloads on unexpected loading and unloading; resulting in port delays. Some Liners were considering detours to Malaysia or India as a result of the delays in Singapore spilling over to other ports. Additionally, some vessel operators expressed concerns that blank sailings would increase to catch up the schedule, resulting in further capacity reduction. It was reported in trade reports that only six of eleven Asia-Europe sailings departed on time, the cause of the low on time rate being a port delay in the eastbound journey. In addition to Singapore, major ports in Asia such as Shanghai, Qingdao, and Shenzhen also report 5 day delays on average.
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Panama Canal Was Not Doing  Any Better
 Across the Pacific, Panama Canal Authority (ACP) truncated the capacity transit through the waterway in May 2023, when the nation was experiencing the worst drought in its history. Due to differences between sea level and waterway, 55 million gallons of fresh water would be released into the sea for a vessel to pass through the locks; this waste put pressure on ACP during a time of water scarcity. ACP subsequently restricted the daily transit number from August 2023: first to 32 vessels per day (38 vessels under normal conditions), then to 24 vessels per day. Since 2023, this restriction has been in place for a prolonged period. In addition, ACP set a draft limit of 44 feet (normally vessels with 50 feet were allowed to transit the canal) or below. During the peak of the restriction, more than 200 vessels were waiting at the entrances of the canal, and an average of six days of delay were recorded. Panama Canal capacity was significantly reduced as a result. From May 2024, ACP announced that they would increase to 32 vessels per day in July, and they would relax the size and draft limit on vessels. On the assumption that everything goes in the right direction, returning to normal would be expected by the end of 2024 at the earliest.
Increased Shipping CostsÂ
As a result of the current global ship congestion, freight rates are likely to shoot up immediately. Although not as bad as in 2021-22 due to US Port congestion (highest 11,108), Freights Baltic Index (FBX) - the Global Container Index (weekly) reached 4,111(2024 Week 24) recently. As of mid-Feb 2023, the index was higher than the previous peak of 3,440, when Liners started detouring their fleets to the Cape of Good Hope route in large numbers. Sea freight indexes such as Shanghai Containerized Index and Drewery show a similar upward trend.
Shippers need to plan their shipment schedule as early as possible to ensure their products would reach shelves on time as peak season a
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