News / Rate rises loom as port congestion hits four-year high

Photo: Shanghai International Port Group

Congestion in container ports has crept up to a four-year high, with nearly 3.7m teu, or 11% of the global fleet, currently tied up awaiting berths.

Linerlytica’s report this week shows North Asia’s ports are the most congested, accounting for 38% of global congestion, followed by gateways in North Europe (13%), and those in South-east Asia, the Mediterranean, and Africa all on 9%.

“Congestion remains very severe in Benelux and German ports, with delays of up to a week,” Linerlytica said today.

“A further deterioration in Rotterdam was averted after demonstrations planned around the port, by Dutch activist group Geef Tengengas over the weekend, were cancelled due to the severe heatwave.”

Logistics platform GoComet shows ships have a waiting time of two days in Singapore, with a dwell time of three days for outbound containers and two days for inbound containers.

In Shanghai, the world’s busiest container port, ships have to wait three days, while the dwell time is four days for exports and three days for imports.

In Rotterdam, while ships have to wait a day, the dwell time is seven days for exports and four days for imports.

These bottlenecks – added to a demand-supply situation which sees global teu-mile demand growth of 7.3% exceeding vessel supply growth of 5.4% – continue to support another imminent rate hike tomorrow, 1 July.

On Friday, Shanghai Containerised Freight Index passed 3,200 points.

The Shanghai-North Europe rate rose 6% from 19 June, to $3,342 per teu, but for 40ft containers, the increase was 12%, to $5,766. The Shanghai-Mediterranean rate gained 10%, to $4,666 per teu.

Freight rates from Shanghai to the US west and east coasts both went up 7%, to $6,067 and $7,384 per 40ft, respectively.

“Asia-North Europe capacity availability slipped in June, with 11 blanked sailings compared with seven originally projected, with further slippage expected in July,” Linerlytica said.

The consultancy added that transpacific shipping availability remained tight, especially to the US east coast with rates set to breach $8,500 per 40ft in July.

Linerlytica noted that for Far East-US west coast shipments, while shipping lines were planning a new round of rate hikes aimed at lifting rates over $7,000 per 40ft, Maersk and Gemini Cooperation partner Hapag-Lloyd were offering preferential rates of less than $6,000 per 40ft, which could block their peers’ attempts to raise rates.