Maersk suspended! Shanghai Port faces the biggest challenge in three years!

Origin: sofreight.com

In the context of the escalating crisis in the Red Sea and high demand, global capacity continues to be tight, and multi-route freight rates have risen sharply. The lack of space and lack of cabinets has increased the pressure of corporate friends. Now, not only the shortage of ships, container supply is tight, even the port is not busy!

According to a recent Bank of America report, increasing port congestion has reduced the supply of container ships by more than 2% since March this year. At present, Singapore, Dubai and the Mediterranean region are the main hotspots for congestion, while the supply of seats in Asia remains tight.

linerlytic data shows that the backlog of containers at Singapore's port, the world's second largest container port, has reached a staggering 450,000 TEUs, far exceeding the highs of several rounds during the coronavirus outbreak, and port delays have extended to seven days.

Port congestion is particularly severe in Asia, where Southeast Asian ports account for 26% of global port bottlenecks, while Northeast Asian ports account for 23%. This shows that port transportation in the Asian region is facing a huge challenge.

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

Shipping giant Maersk announced on June 3 that its shipping schedules were experiencing significant delays due to severe congestion at major ports in the Mediterranean and Asia. This congestion has resulted in significantly longer waiting times at ports, affecting Maersk's ability to maintain normal shipping schedules.

In response to the current port conditions, Maersk plans to launch two blank voyages in the coming weeks.

Cancellation of voyage 425W by MSC AMELIA on the AE11 route from Qingdao to Valencia on 1 July 2024;

Cancellation of flight 426W by MSC MIRJAM on AE15 from Busan to Tekilda on July 2, 2024.

Both voyages will be suspended.

Maersk said in the announcement that this situation may cause inconvenience and disruption to customers' supply chain plans, and Maersk deeply regrets any inconvenience this causes. Maersk will continue to ensure the impact is minimised by rebooking shipments to the remaining network in advance.

In addition, Mediterranean Shipping (MSC), the world's largest container liner, began to use India's Kamalagal and Vishahapatnam ports for transshipment operations.

A shipping company executive said that rather than having ships wait a week to 10 days at the port of Singapore, some shipping companies prefer to drop off containers at Indian ports. However, Indian ports will also be congested because the current terminal yard utilization rate is already high.

Besides of shipping companies, ports have also taken measures to respond this crisis.   The Port of Singapore has reactivated the old berths and storage yards that were previously dumped at Keppel Terminal, and increased manpower investment in parallel to deal with the pressing issue of container backlog. Later this year, Singapore's Tuas Port will add three more berths to its existing eight, which will increase overall port handling capacity and ease pressure.

The Red Sea crisis is believed to be the "culprit" of the current round of   jams.

The latest weekly report from S&P Global Market Intelligence notes that northern Chinese ports are starting to see congestion due to container availability, due to disruptions related to the Red Sea (containers stay on the water longer) and empty boxes piling up at ports.

If the situation in the Red Sea does not improve, this bad situation may continue for some time. And because congestion is difficult to ease, freight rates will continue to be pushed up.

Under this situations, we suggest our clients order the ship in advance or delay your purchase plan if its not urgent till the freight decrease.