Congestion at Singapore’s container port has reached its worst levels since the COVID-19 pandemic, highlighting the significant ripple effects of prolonged vessel re-routing to avoid Red Sea attacks on global ocean shipping. This congestion is mirrored in other major Asian and European ports.
Retailers, manufacturers, and other industries reliant on large container ships are once again facing surging rates, port backups, and shortages of empty containers. This comes as many consumer-focused firms ramp up inventories ahead of the peak year-end shopping season.
Global port congestion has peaked to an 18-month high, with 60% of ships waiting at anchor located in Asia, according to maritime data firm Linerlytica. Ships with a combined capacity exceeding 2.4 million twenty-foot equivalent container units (TEUs) were anchored as of mid-June.
Unlike the pandemic-era surge driven by home-bound consumer spending, the current disruptions stem from vessel rerouting to avoid the Red Sea. Yemen’s Houthi group has been attacking shipping since November, leading to longer routes around Africa. Consequently, vessels are offloading larger volumes at transshipment hubs like Singapore, skipping subsequent port calls to stay on schedule.
“(Shippers) are managing by dropping boxes at transshipment hubs,” explained Jayendu Krishna, deputy head of Drewry Maritime Advisors in Singapore. “This has resulted in accumulating boxes in Singapore and other hubs.”
Average offload volumes in Singapore have jumped 22% between January and May, significantly impacting port productivity, according to Drewry.
Severe Congestion
Singapore, the world’s second-largest container port, has seen particularly severe congestion recently. The average wait time for berthing a container ship extended to two to three days by late May, with some delays stretching up to a week, according to the Maritime and Port Authority (MPA) of Singapore and container trackers Linerlytica and PortCast. Typically, berthing takes less than a day.
Neighboring ports in Malaysia, such as Port Klang and Tanjung Pelepas, are also experiencing backups. In China, ports like Shanghai and Qingdao are facing the longest delays. Drewry expects high congestion levels at major transshipment ports to persist but anticipates some relief as carriers add capacity and restore schedules. The MPA has reopened older berths at Keppel Terminal and plans to open more at Tuas Port to address the extended waits.
Maersk, the world’s second-largest container carrier, announced it would skip two westbound sailings from China and South Korea in early July due to severe congestion in Asian and Mediterranean ports.
Early Peak Season
This year’s peak shipping season has arrived earlier than expected, exacerbating port congestion, according to shippers and research firms. Restocking activities in the U.S. and early shipments in anticipation of stronger demand are driving this trend, said Niki Frank, CEO of DHL Global Forwarding Asia Pacific. Consequently, container rates have surged, risking another wave of price increases reminiscent of the post-pandemic inflation spike that central banks are still combating.
Container import volumes at the ten largest U.S. seaports rose 12% in May, driven by the second-highest monthly import volumes since January 2023, according to data provider Descartes. U.S. consumers are spending more than last year, and retailers are stocking up to meet demand,” said Jonathan Gold, a National Retail Federation vice president.
Ocean imports from Asia to Europe are also indicating a restocking season extending into the peak season, pushing rates to 2024 highs, noted Judah Levine of freight platform Freightos. Container freight prices from Asia to the U.S. and Europe have tripled since early 2024. Rates from Asia and Singapore to the U.S. East Coast are at their highest since September 2022, while rates to the U.S. West Coast are at their highest since August 2022, reported freight platform Xeneta.
Some industry experts attribute the bottlenecks at Chinese ports to U.S. importers rushing to buy Chinese goods before steep tariff hikes take effect on August 1. However, newly imposed U.S. tariffs will only affect about 4% of Chinese imports, according to Jared Bernstein, chair of the Council of Economic Advisers. Gene Seroka, executive director of the Port of Los Angeles, expects a limited impact.
Concerns about potential strikes at U.S. ports this year might also be advancing the peak season, while German port strikes are adding to the gridlock, according to DHL.
These disruptions are expected to translate into higher prices for consumers. “These are huge financial hits for shippers to absorb,” said Peter Sand, chief analyst at Xeneta.
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