Global ports continue to face serious congestion. Maritime data company Linerlytica said this month that global port congestion has reached its highest level in 18 months, with 60% of ships anchored in Asia. As of mid-June, more than 2.4 million 20-foot equivalent units (TEUs) of ships with a total capacity were waiting at anchorages. Singapore's container port congestion is the worst since the Covid-19 outbreak, indicating that ships that have been diverted for a long time to avoid the Red Sea attacks have disrupted global shipping, and bottlenecks have also appeared in other Asian and European ports.

Global retailers, manufacturers, and other industries that rely on large container ships are once again facing problems of soaring freight rates, port congestion, and shortage of empty containers, and many consumer-oriented businesses hope to increase their inventory before the end of the year.

However, unlike during the pandemic, the surge in port operations is not driven by a consumer buying frenzy. Instead, as ships take longer routes through Africa to avoid the Red Sea (where Houthi rebels in Yemen have been attacking ships since November last year), ships are missing their scheduled times and making fewer port calls, which has disrupted their schedules.

As a result, ships are unloading more cargo at large transshipment centers such as Singapore—in the city, cargo is unloaded at the end of the journey and reloaded on different ships, but many freight operations have abandoned subsequent voyages to catch up on their schedules.

Drewry said Singapore's average discharge volume grew 22% from January to May, seriously affecting the port's productivity. Jayendu Krishna, vice president of Drewry Maritime Advisors, which is headquartered in Singapore, said, "(shippers) are trying to control the situation by unloading containers at transshipment centers. Shipping companies have been stacking containers at Singapore and other hubs."

Severe port congestion

As the world's second-largest container port, Singapore has recently experienced particularly severe congestion. The Maritime and Port Authority of Singapore (MPA) said at the end of May that the average waiting time for container ships to berth was two to three days, while container tracking companies Linerlytica and PortCast said delays could last for up to a week. Generally, the berthing time does not exceed one day.

As some ships skip Singapore, neighboring ports are also congested. Linerlytica said that the pressure has shifted to Port Klang and Tanjung Pelepas in Malaysia, and waiting times at Chinese ports are also rising, with the longest delays at Shanghai and Qingdao ports.

Drewry expects congestion at major transshipment ports to remain high, but as airlines add capacity and resume flight schedules, congestion is expected to ease. The MPA of Singapore said that port operator PSA has reopened the older berths and terminals at Keppel Terminal and will open more berths at Tuas port to address the problem of prolonged waiting times.

Maersk, the world's second-largest container shipping company, said earlier this month that it would cancel two westbound voyages from China and South Korea in early July due to severe congestion at Asian and Mediterranean ports.

Shippers and research companies said the annual shipping peak season has also arrived earlier than expected, exacerbating port congestion. Niki Frank, CEO of DHL Global Forwarding Asia Pacific, said this seems to be due to stock replenishment activities, especially in the United States, and customers shipping goods earlier in anticipation of stronger demand.

Meanwhile, container freight rates are skyrocketing, increasing the risk of buyers facing another round of price increases, such as post-pandemic inflation, while major central banks are still working to control inflation.

Dimerco, a freight forwarder focused on Asia, said that after entering April, freight rates had stabilized but in May, "the shipping export of China's e-commerce, electric vehicles, and renewable energy-related products increased sharply." The formula notes: "The peak season, which usually begins in June, has been pushed forward a full month, causing sea freight prices to soar."

Data provider Descartes said that container imports at the top 10 US seaports increased by 12% in May, the second-highest monthly import volume since January 2023. Jonathan Gold, vice president of the National Retail Federation, said: "Consumer spending continues to outpace last year, and retailers are increasing their inventory to meet demand."

Judah Levine of Freightos, a freight platform, said that ocean freight imports from Asia to Europe also showed signs of entering the peak season for inventory replenishment, pushing freight rates to the highest level since 2024. Since the beginning of 2024, container freight rates from Asia to the United States and Europe have doubled.

Judah Levine of Freightos, a cargo platform, stated that marine transportation imports from Asia to Europe also show signs of entering the peak season of supplementing inventory, resulting in freight rates reaching their highest point since 2024. Since early 2024, container shipping rates from Asia to the United States and Europe have doubled.

Freight platform Xeneta said that the freight from Asia and Singapore to the US East Coast is at its highest level since September 2022, while the freight to the US West Coast is at its highest level since August 2022.

Some insiders believe that the congestion in Chinese ports is partly due to US importers rushing to buy Chinese goods such as steel and medical consumables, which will be significantly tariffed from August 1. But Jared Bernstein, chairman of the US Economic Advisory Committee, said that the new tariffs will only affect about 4% of Chinese goods imported to the US.

Gene Seroka, executive director of the Port of Los Angeles, also expected limited impact. The Port of Los Angeles is the largest gateway for China's import of ocean cargo to the United States. He said:"We may see some goods come in, but they will not be flooding in."

Concerns about potential strikes at US ports this year may also bring forward the peak season, and DHL said the strike in Germany intensified the stalemate. Experts warn that all these disruptions could mean consumers will pay higher prices.

Meanwhile, Peter Sand, chief analyst of Xeneta, said:"This is a huge financial blow to shippers."