News / Port congestion now a 'significant challenge' to global supply chains

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Major global ports continue to see extended wait times, which could create upward pressure on freight rates. 

In a report today, maritime intelligence company Kpler warned that port congestion had become “one of the most significant operational challenges” in global maritime supply chains.  

“Port congestion represents more than an operational inconvenience, it directly impacts revenue, costs, and customer satisfaction,” it explained, and added that a congested port could increase demurrage and detention charges, disrupt production schedules and force carriers to blank sailings or reroute vessels. 

Kpler highlighted Shanghai, Ningbo, Singapore, Los Angeles, Long Beach, Antwerp, and Rotterdam as ports that “consistently experience significant congestion”. 

Indeed, HMM’s European port update today notes that in Rotterdam, labour availability “remains an issue” and the average waiting time for the ECT terminal is 4.4 days, or 13.9 days at the RWG terminal.  

Tomorrow, labour action targeting services at the port of Antwerp poses a high risk of halting vessel movement, potentially blocking entry and exit, according to Kuhne+Nagel.

“Rail transport will remain severely limited, and road transport may also face delays. These disruptions are likely to extend lead times for import and export shipments and impact container handling across the region,” it said.

Kpler also warns of a “cascade” that sees local congestion become “global disruption” if delays at one major port causes vessels to miss schedule windows at subsequent gateways. 

And this, it warned, could take a toll on freight rates “through multiple mechanisms”. 

Carriers will often increase vessel speed between ports to recover schedule delays caused by congestion, consuming additional bunker fuel which “flows into freight rate structures”. 

As well as extra fuel charges, risk premiums will often be added into freight rates to cover uncertainty around port call costs, schedule reliability penalties, and potential congestion surcharges.  

Further, a vessel spending five extra days at Los Angeles, for example, “cannot be deployed on revenue-generating voyages, and when supply decreases while demand remains constant, rates increase”. This also applies to container equipment shortages at origin locations, which is costly for carriers to rectify, it said.  

“Carriers calculate actual incremental costs from congestion, additional charter days, excess bunker consumption, and missed sailing recovery costs. They then allocate these costs across containers moving through the affected port,” said Kpler. 

“If, for example, congestion adds $500,000 in costs and 2,000 containers move through that port, the per-container surcharge would be $250.” 

But it did add that some carriers would set congestion surcharges based on market conditions and competitive positioning, rather than the direct cost calculation.  

“If the market accepts $800 per container surcharges, carriers may implement that level regardless of actual cost impact.” 

But the intelligence platform suggested that by monitoring congestion indicators, understanding its causes and cost implications, and implementing proactive mitigation strategies, companies could still control costs and maintain efficiency in the wake of port congestion.