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Singapore port faces container congestion amid surge in vessel calls

  • Author
  • Parisha Tyagi    Baoying Ng
  • Editor
  • Jonathan Fox
  • Commodity
  • Shipping

Singapore — Container vessels planning to berth at Singapore port are now facing longer wait times, market sources said, with one source estimating that this has grown to five to seven days from a maximum of two days to turn around an 18,000 TEU vessel.

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"There is a lot of port congestion in Singapore, which is one of the biggest factors," a freight-forwarder based in Singapore said. Vessels calling at Singapore have not departed on time since September, the freight-forwardersaid.

According to PSA International, Singapore has been experiencing an increase in activity.

"Like many other ports across the world, PSA Singapore has been experiencing a surge in vessel calls and container volumes in recent months," a PSA corporate spokesperson said. "This exceptional situation is due to a confluence of factors, including an unprecedented and volatile surge in cargo demand, congestion across all nodes in the global supply chain (including depots, warehouses and seaports) due to renewed lockdowns, a lack of usable empty containers while laden ones are held up longer at these nodes, and shipping lines' vessel sailing schedule reliability dropping to 10-year historical lows, causing further delays at almost every seaport worldwide."

PSA said that PSA Singapore has been ramping up additional capacity and resources "and is working closely with shipping line customers and cargo owners to alleviate the situation."

The number of vessels staying at Singapore port for more than two days in January, averaged 46 per day, about 59% higher than January 2020, according to data from S&P Global Platts trade flow software cFlow.

The average number of vessels staying at Singapore port for more than two days each day peaked in November, at 49, compared with 17 in the same month of 2019.

Port congestion drives spot freight costs higher

This congestion has had a knock-on effect on spot container freight prices, where exports from Singapore to North America have attracted higher pricing relative to other ports in Southeast Asia.

Sources said the freight plus priority-loading premium cost from Singapore to East Coast North America was around $10,000-$15,000 per forty-foot-equivalent unit (FEU), about $6,000 to $8,000/FEU higher than other main ports in Southeast Asia, such as Vietnam and Hong Kong.

Typically, pricing between these regions is similar, a source said. "Prices in Singapore used to be on a par or even lower than China, but now the situation is different because carriers are first deploying capacity in China and other regions are secondary."

Another source said that ports in the region, including in China and Southeast Asia, are facing congestion issues. Some cargoes from other ports such as Port Kelang and Colombo have also been diverted to Singapore due to logistical issues.

Platts assessed the newly launched Southeast Asia to East Coast North America price at $5,500/FEU on March 1. The Southeast Asia to West Coast North America freight was assessed at $4,500/FEU.

Global container freight costs have attracted significant attention globally, especially over the past year, with rates rising to multi-year highs and schedule reliability falling amid logistical issues. Platts Container Index, a weighted average of spot prices on key global routes, was $4,226.32/FEU on Feb. 26, more than quadruple what it was in the same period of 2020.