Singapore port congestion shows global impact of Red Sea attacks

Global port congestion worsens due to prolonged vessel re-routing, impacting retailers, manufacturers, and consumers with rising rates and shortages.

Congestion at Singapore’s container port is at its worst since the COVID-19 pandemic, a sign of how prolonged vessel re-routing to avoid Red Sea attacks has disrupted global ocean shipping—with bottlenecks also appearing in other Asian and European ports.

Retailers, manufacturers and other industries that rely on massive box ships are again battling surging rates, port backups and shortages of empty containers, even as many consumer-oriented firms look to build inventories heading into the peak year-end shopping season.

Global port congestion has reached an 18-month high, with 60% of ships waiting at anchor located in Asia, maritime data firm Linerlytica said this month. Ships with a total capacity of over 2.4 million twenty-foot equivalent container units (TEUs) were waiting at anchorages as of mid-June.

But, unlike during the pandemic, it is not a buying flurry by house-bound consumers that is swamping ports.

Rather, ship timetables are being disrupted with missed sailing schedules and fewer port calls, as vessels take longer routes around Africa to avoid the Red Sea, where Yemen’s Houthi group has been attacking shipping since November.

Ships are therefore offloading larger amounts at once at big transhipment hubs like Singapore, where cargoes are unloaded and reloaded on different ships for the final leg of their journey, and forgoing subsequent voyages to catch up on schedules.

“(Shippers) are trying to manage the situation by dropping the boxes at transhipment hubs,” said Jayendu Krishna, deputy head of Singapore-based consultancy Drewry Maritime Advisors.