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Navigating Global Port Congestion: Understanding the Challenges

Global ports are currently facing threats of congestion and disruptions in transport operations, primarily attributed to factors such as increased demand in the container market, the crisis in the Red Sea, threats of strikes, and natural disasters. Major ports like Singapore, Durban, and Colombo have experienced severe congestion, resulting in longer waiting times for vessels and rising freight costs. Furthermore, ports in France and Germany are also under the threat of strikes, exacerbating the unstable situation in the global maritime industry.

In recent times, the surge in container market demand coupled with unforeseen events like the Red Sea crisis, labor strikes, and natural calamities have posed significant challenges to global port operations. Ports play a crucial role in facilitating international trade and supply chain operations, making congestion and interruptions a pressing concern for the maritime industry worldwide.

Singapore, known as the world’s second-largest container port and a key transshipment hub in Asia, has been grappling with severe congestion issues. The prolonged waiting times for vessels and the subsequent rise in freight costs highlight the strain on the port’s operations and the broader impact on regional and global trade flows.

Durban Port, South Africa’s largest container port, has also faced congestion due to extreme weather conditions and operational equipment failures. The prolonged congestion is anticipated to last for months, impacting shipping schedules and cargo movements in the region.

Colombo Port, facing labor shortages and efficiency issues, has experienced congestion leading to delays in vessel schedules and increased freight rates, affecting the transshipment of goods across South Asia.

The threats of strikes in ports like Le Havre, Marseille-Fos in France, and Hamburg in Germany add to the challenges faced by the global maritime industry. Labor disruptions can result in severe operational disruptions and interruptions, further complicating the already fragile state of global port operations.

The ongoing labor threats in ports along the US East Coast, reminiscent of the situations in West Coast ports in 2022 and 2023, highlight the vulnerability of the maritime sector to labor-related disruptions, potentially causing further interruptions in transport operations.

The global port congestion and disruptions underscore the critical need for proactive measures and collaborative efforts to address the challenges faced by the maritime industry. Understanding the root causes of congestion and disruptions is essential in developing effective strategies to enhance operational efficiency and ensure the smooth flow of global trade through ports worldwide.

Recently, due to the strong demand in the container market and the continued chaos caused by the Red Sea crisis, global ports have shown signs of further congestion. A weekly report released by shipping consulting company Linerlytica on June 3 showed that the global container capacity queued up to enter the port rose to 2.1 million standard containers, accounting for 7.1% of the world’s total container shipping capacity.

In addition, many major ports in Europe and the United States are facing the threat of strikes, adding fuel to the already chaotic global shipping.
Foreign traders who ship goods to the following ports must pay attention to local port risks and remind customers to pay attention in a timely manner!

Singapore port congestion

The congestion at the Port of Singapore, the world’s second-largest container port and a major transshipment hub in Asia, is critical to global trade.
The number of containers waiting to be berthed in Singapore surged in May. At the peak period in late May, the highest number of containers waiting to be berthed reached 480,600 20-foot standard containers.

In order to alleviate congestion, the Port of Singapore Authority (PSA) reactivated the old berths and yards of the abandoned Keppel Terminal, and also added a large amount of manpower to deal with the container backlog problem.
However, according to a recent report by Asian container consulting firm Linerlytica, container ships may currently have to wait up to about seven days to obtain a berth in Singapore, while under normal circumstances ships only need to wait up to half a day.
A recent report from Linerlytica stated that this has caused some shipping companies to abandon berthing in Singapore and switch to ports in other neighboring countries such as Malaysia, putting greater pressure on already congested and low-capacity ports, which may worsen the situation in the next month.

Durban port congestion

Durban Port is the largest container port in South Africa, but according to the 2023 Container Port Performance Index (CPPI) released by the World Bank, Durban Port ranks 398th among 405 container ports in the world.

Congestion at the Port of Durban is rooted in extreme weather and an equipment failure at port operator Transnet, which has left more than 90 ships waiting outside the port. The congestion is expected to last for months, with shipping giants imposing a congestion surcharge on South African importers due to a lack of maintenance and availability of equipment, further exacerbating the economic pressure.

Colombo port congestion

Due to labor shortage and reduced efficiency, the Port of Colombo has a backlog of 50,000 TEUs of cargo, which has led to shipping delays and rate increases, and has thrown cargo transshipment into chaos at important transit ports in South Asia. Freight rates in Colombo have doubled due to congestion and delays, with shippers required to book a slot eight weeks in advance.

The congestion at Colombo Port not only affects itself but also its neighbors India and Bangladesh.

Strikes at all major French ports

According to news on June 10, all major ports in France, especially the container hub ports of Le Havre and Marseille-Fos, will face the threat of a month-long strike in the near future, which is expected to cause severe operational chaos and disruption.

The strike follows several one-day strikes and multiple four-hour work stoppages planned by the union representing dockworkers and other port workers in June to protest against government pension reforms that would raise the mandatory retirement age.
On June 7, last Friday, the first 24-hour strike broke out. The union plans to continue strike action in the coming weeks and could extend it into July if the union fails to get a satisfactory answer from the government.
It is reported that during the first strike, at the Port of Le Havre, ro-ro ships, bulk carriers and container terminals were blocked by dock workers, resulting in the cancellation of the docking of four ships and the delay of 18 other ships. Meanwhile, in Marseille-Fos, some 600 dockers and other port workers blocked the main entrance to the container terminal for trucks. In addition, the French ports of Dunkirk, Rouen, Bordeaux and Nantes Saint-Nazaire were also affected.

Strike at the Port of Hamburg

On June 7, local time, port workers at the Port of Hamburg in Germany launched a warning strike, causing terminal operations to be suspended. Terminals of companies such as Hamburg Port and Logistics AG (HHLA) and Eurogate are affected as a result. HHLA said its branches in Hamburg will join the strike, including the Burchardkai (CTB), Altenwerder (CTA) and Tollerort (CTT) container terminals.

Freight forwarding giant Kuehne + Nagel issued an early warning on its official website, saying that following the strike at the Port of Hamburg, the union Verdi also announced two more strikes in Bremen and Bremerhaven.

Strike threats at U.S. East and Gulf of Mexico ports

The latest news is that the International Longshoremen’s Association (ILA) has stopped negotiations due to concerns about the use of automatic door systems at APM Terminals, which may trigger a strike by dockworkers in the eastern United States and the Gulf of Mexico. ILA is the largest longshoremen’s union in the United States.

The port gridlock on the U.S. East Coast mirrors what will happen on the West Coast for much of 2022 and 2023. Last June, 29 ports on the U.S. West Coast finally reached an agreement on a six-year labor contract, ending 13 months of tense negotiations, strikes and the relocation of cargo to other locations.
At present, European and American retailers have started restocking in advance to cope with transportation delays and supply chain uncertainty. Foreign traders who are busy shipping must pay attention to changes in freight rates and shipping spaces!

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