Singapore navigating shipping squeeze

Comments · 389 Views

Singapore navigating shipping squeeze

Singapore navigating shipping squeeze

Singapore’s shipping industry is feeling the effects of a global supply chain bottleneck, with an increase in the number of commercial vessels docking and a rise in container volume at the country’s port in recent months.Get more news about Singpaore Shipping,you can vist our website!

A sudden surge in demand has outstripped the available capacity of ships, container boxes and ports, resulting in shipping delays worldwide, including in Singapore.

A report by commodities pricing agency SP Global Platts earlier this month found that an average of 49 vessels per day stayed at Singapore’s port for more than two days in November last year, up from 17 in November 2019.

According to SP Global Platts, this number stood at 46 in January, before hitting a high of 52 per day in February – an increase of about 60 per cent from the same period last year.

Port operator PSA Singapore said that like many other ports, it has been experiencing a surge in vessel calls and container volumes.

“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,” said a PSA corporate spokesperson.

Experts have also warned that Wednesday’s (Mar 24) blocking of the Suez Canal – one of the world’s most important trade routes – by a massive 400m-long cargo ship could also cause further bottlenecks in global shipping.

On Thursday, Singapore’s Transport Minister Ong Ye Kung said that a prolonged disruption to the Suez Canal could result in PSA seeing further schedule disruptions as shipping lines reroute their journeys.

Mr Rupesh Jain, managing director for Maersk Thailand, Malaysia and Singapore said the shipping giant had experienced the “perfect storm” in global container trade over the past seven to eight months.

After seeing a double-digit volume decline in the second quarter of last year amid global lockdowns due to the COVID-19 pandemic, demand recovered in the third and fourth quarters of last year and “exceeded anticipated volumes much faster than expected”, he said.“The upswing in demand was driven by a US-based demand surge with other markets following suit soon after due to a change in purchasing patterns and government stimulus packages,” said Mr Jain.

Container production was also down 40 per cent for the first half of 2020 compared to the same period in 2019 which – coupled with unexpected demand recovery – led to a significant drop in the availability of containers globally, he noted.

Congestion, along with lower productivity at terminals and inland depots, with boxes being tied up for longer periods, have also led to bottlenecks, he added.

“As a major transhipment port for the Asia-Pacific region and key Asia-Europe trades, Singapore is not spared,” said Singapore University of Social Sciences’ (SUSS) maritime expert Yap Wei Yim.

“Mismatch between mainline and feeder vessels contributed to significantly longer lay over times for containers sometimes stretching even to weeks,” he said.

Capacity shortages are exacerbated by port congestion, disruptions to vessel schedules and disruptions to repositioning of empty containers, he said, adding that freight rates are being driven up as these problems persist.