Asian ports, particularly in China and Singapore, have been grappling with significant backlogs caused by containerships diverting from their usual routes through the Red Sea. This congestion is now extending to other regional ports, including Port Klang in Malaysia. Recent reports indicate that delays and increased shipping costs are becoming more likely, reminiscent of the pandemic levels of 2020 and 2021.
Singapore-based analysts Linerlytica have identified two primary congestion hotspots: China’s Shanghai/Ningbo port complexes and Singapore. The congestion around Singapore is now impacting neighboring Port Klang. Port Klang, an important regional port near Kuala Lumpur, is not typically known for long queues of vessels. However, Bloomberg reports that last year the port handled over 14 million TEU.
According to a new report by Bloomberg, around 20 containerships are currently anchored off Port Klang awaiting berths. Linerlytica’s hotspot scoreboard lists Port Klang with the third highest queue-to-berth ratio at 1.15, with nearly 84,000 TEU waiting in the anchorage. In comparison, Shanghai/Ningbo has a ratio of 1.25, while Singapore has a ratio of 0.5. There are a total of 32 ships anchored off Port Klang, compared to 28 at the much larger container operation in Singapore.
Analysts predict that these congestion problems could persist at least through August, coinciding with the high season for Asian container shipping as retailers prepare for end-of-year holiday sales.
Port Congestion in Singapore and China Spreads to Malaysia
Singapore officials attribute the issue to ongoing diversions caused by problems in the Red Sea. Approximately 90 percent of containerships are arriving off schedule, resulting in vessel bunching. Carriers are increasingly using Singapore as a transshipment port. The Financial Times highlighted Maersk’s decision to skip two westbound sailings from China and South Korea due to congestion and delays. Singapore officials noted that containerships are spending more time on berth to rearrange loads for greater efficiency in subsequent port calls.
Also underscored Singapore’s global influence, connecting to 600 ports in 123 countries. The domino effect of congestion is expected to cause delays in neighboring ports, potentially driving container prices higher. With container prices already at peak levels, analysts predict that capacity delays and increasing demand will further escalate prices.
Maersk issued a report to customers discussing the “ongoing ripple effects of Red Sea shipping disruptions.” The report advises shippers to diversify their supply chains, citing that available container capacity was down between 15 and 20 percent in the second quarter of 2024.
Maersk warns that the current situation has heightened uncertainty for global supply chains. Extended transit times and port congestion have significantly affected reliability. Maersk emphasizes that the duration of these disruptions and the timeline for a return to normalcy remain uncertain.
This growing congestion at major ports like Singapore and now Port Klang highlights the fragile state of global supply chains. As these bottlenecks worsen, they not only delay shipments but also increase the cost of shipping and, ultimately, consumer goods. Stakeholders across the shipping industry are being urged to take proactive measures to mitigate the impact of these disruptions and to consider alternative routes and logistical strategies.
In summary, the ongoing congestion in key Asian ports and its spillover effects into Malaysia signify a challenging period ahead for global shipping. With no clear end in sight for the disruptions stemming from the Red Sea and the resultant delays at transshipment hubs like Singapore and Port Klang, the shipping industry must brace for continued volatility and rising costs.
