Global supply chains are navigating growing issues created by port congestion and vessel delays impacting multiple regions. Localized severe weather, seasonal volume increases, and vessel bunching are contributing to longer berthing times, lower terminal productivity, and building congestion at key ports globally.
An analyst at Sea-Intelligence calculates that currently, a total of 5% of all global deep-sea capacity is tied up due to congestion, delays, and other factors. That’s approximately 1.7 million TEUs, which equates to the size of the 8th-largest container shipping company’s total capacity.
Where is congestion having the biggest impacts?
Asia: With typhoon season at its peak, ports like Shanghai and Ningbo have seen multi-day closures, with the latest impact coming from Typhoon Dolphin. Carriers are omitting port calls in an attempt to reduce vessel bunching and port waiting times. This comes on top of many ports already facing higher volumes due to increased shipping demand.
Singapore is experiencing peak import dwell times nearing 11 days due to heavy traffic and schedule reshuffling.
Carriers continue to utilize blank sailings to ensure rates remain elevated, but also as a way to manage schedule delays impacting weekly loops as vessels are being delayed getting back to Asian ports.
Europe: Low water levels on the Rhine River, the primary freight artery connecting major seaports like Rotterdam and Antwerp to industrial areas in Germany, France, and Switzerland, have created severe draft restrictions, impacting the amount of freight that can travel by barge. Alternatives to barge are road and rail, but the impacted capacity is creating bottlenecks as shippers try to move from barge to truck and train.
Terminals are now becoming congested as the barges cannot move equipment quickly enough, and containers are dwelling at marine terminals for too long.
Many of these same ports have been seeing routing shifts and container schedule degradation, and shippers are facing prolonged transit times.
Middle East: Vessel routings, capacity, and operational costs continue to plague carriers due to multiple chokepoints related to geopolitical turmoil. However, carriers like Maersk, Hapag, CMA, and MSC have cautiously tested Suez Canal transits on specific loops, but the broader Red Sea corridor remains threatened by Houthi militants. Some carriers are maintaining the longer transits around Africa’s Cape of Good Hope.
Panama Canal: El Niño conditions have impacted water levels in the Gatun Lakes, the waterway that feeds the canal locks. The Panama Canal Authority has reduced draft levels, which impacts the number of vessels and the carrying capacity of each vessel that transits. The current backlog of vessels waiting to transit the canal is estimated at 112 vessels. Vessels that don’t have a transit booking are facing anywhere from 7–14 days of waiting. Auctions for priority slots have seen carriers pay upwards of $4 million to try to avoid lengthy queues.
All carriers have introduced Panama Canal surcharges to address cost impacts from the draft restrictions. In addition, some carriers have announced schedule adjustments on multiple strings to reroute via the Cape of Good Hope to avoid the Panama Canal. These adjustments will avoid the Panama Canal surcharge and congestion; however, they will result in longer published transit times.
Key takeaways:
- Buffer transit times to account for berthing delays, transit waiting times, and vessel re-routings.
- Expect changes on some ocean services as a result of port omissions, port rotations, and blank sailings.
- To minimize potential for delays consider air freight, ocean express services, or alternative routings for any critical shipments during this time.
Articles and notices of interest:
- https://maritime-executive.com/article/ports-delays-and-congestion-absorb-5-of-industry-s-teu-capacity
- https://gcaptain.com/panama-canal-draught-restrictions-set-to-add-to-congestion-chaos/
- https://www.seatrade-maritime.com/maritime-transportation/panama-canal-cuts-daily-transit-slots-due-to-el-ni-o
RIM logistics, ltd. will continue to closely monitor this evolving situation and provide updates as necessary. Please reach out to your RIM representative if you have any questions.