The traffic is crazy! Maersk suspends sailing! Shanghai Port faces its biggest challenge in three years! Price reduction is far away...

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Against the background of the escalating Red Sea crisis and high demand, global shipping capacity continues to be tight, and freight rates on many routes have risen sharply. The shortage of cabins and cabinets has doubled the pressure on enterprises. Nowadays, not only are there a shortage of ships and a tight supply of containers, but even the ports are overwhelmed...

According to the latest report released by Bank of America, global port congestion has intensified significantly since March this year, directly leading to a reduction of more than 2% in the supply of container ships. Currently, Singapore, Dubai and the Mediterranean region have become the main focus of congestion problems, while the supply of container spaces in Asia continues to be tight.

According to a recent report by Linerlytica, an Asian container consulting firm, currently container ships may have to wait up to about seven days to obtain a berth at the Port of Singapore, the world's second largest container port, while under normal circumstances ships only need to wait up to half a day. This has brought great challenges to the global shipping industry.

The latest data shows that the number of containers waiting to be berthed in Singapore surged in May, with a peak in late May, the highest number of containers waiting to be berthed has reached 480,600 20-foot standard containers.This number far exceeds the historical high during the COVID-19 outbreak.

It is understood that port congestion in Asia is particularly serious, with Southeast Asian ports accounting for 26% of global port bottlenecks, and Northeast Asian ports accounting for 23%. This shows that port transportation in Asia faces huge challenges.

In order to alleviate congestion, PSA Singapore reactivated the old berths and yards of the abandoned Keppel Terminal and also added a large number of manpower to deal with the container accumulation problem.

In addition to hotspots such as Singapore and the Mediterranean, many Asian ports such as Shanghai, Qingdao, Port Klang and Colombo have also experienced varying degrees of congestion. It is worth noting that as the world’s largest container port, the dwell time of Shanghai Port has reached the highest level in the past three years!

In addition, the world's largest container liner Mediterranean Shipping Company (MSC) has begun to capitalize on India'sPorts such as Kamaragarh and VisakhapatnamCarry out transshipment business.

A shipping company executive said that rather than letting ships wait for a week to 10 days at the Port of Singapore, some shipping companies prefer to drop off containers at Indian ports. However, Indian ports will also be congested (in the future) because the current yard utilization rate at the terminals is already high.

In response, shipping giant Maersk announced on June 3 that its shipping schedules have been severely delayed due to severe congestion problems at major port terminals in the Mediterranean and Asia. This congestion has resulted in significantly longer waiting times at various ports, affecting Maersk’s ability to maintain normal shipping schedules.

In response to the current port conditions, Maersk plans to launch two blank sailings in the next few weeks. The specific sailing suspension plans are as follows:

In addition, last Friday (May 31), Maersk also issued an announcement announcing the closure of the Asia-US East TP20 route. The following is the specific information about the last voyage of the TP20 route to cease service:

As for the closure of the TP20 route, the official explanation given by Maersk is: "Due to the knock-on effects of the current Red Sea situation, including delays and capacity constraints, we need to reorganize our network to best meet the needs of our customers. As part of this, we TP20 routes will be gradually closed.”

Meanwhile, Drewry's latest data shows that of the 661 scheduled sailings announced in the 23rd week (June 6- Between June 9th) and the 27th week (July 1st - July 7th), 43 sailings were canceled, with a sailing cancellation rate of 7%.

Of the canceled sailings, approximately 54% will occur ontranspacific eastbound routeon, 30% occurred inAsia-Northern Europe and Mediterranean routesOn, 16% occurred inwestbound transatlantic routesuperior.

Drewry said that while increased ship speeds and increased transshipment volumes have helped maintain the frequency of container shipping turnover, increasing port congestion is further affecting the container market.

Singapore is Asia's worst-affected port by congestion, which has forced some shipping lines to cancel calls at the port and has the potential impact on downstream ports of increased cargo volumes and further delays.

This concentration of congestion could lead to overflow congestion at other regional ports and disruption to shipping plans. The ongoing congestion may facilitate the implementation of the GRI announced by shipping lines and may further push up freight rates.

Data as of May 30 show that the current freight rate from Asia to Europe has reached US,200 per 40-foot container, while the freight rate from Asia to the West Coast of North America has also climbed to US,100.

The Red Sea crisis is considered to be the "culprit" of this round of ship jams. If the situation in the Red Sea does not improve, this bad situation may continue for some time. andAs congestion is difficult to alleviate, freight rates will continue to be pushed up.

The latest Shanghai Freight Index (SCFI) released by the Shanghai Shipping Exchange on May 31 was 3044.77 points, an increase of 12.63% from the previous issue.