Current State of Congestion at Singapore Port

According to the latest report from Linerlytica, an Asian container consultancy firm, container vessels at Singapore Port are facing an unprecedented wait of approximately seven days for berthing, compared to the usual half-day wait under normal circumstances.

Data shows a substantial increase in the number of containers awaiting berthing at Singapore Port in May. At the peak in late May, the number of containers waiting to berth reached 480,600 twenty-foot equivalent units (TEUs). This data indicates that congestion at Singapore Port has reached an unprecedented level, significantly impacting global supply chains.

Causes of Congestion: Shipping Delays and Increased Throughput

The severe congestion at Singapore Port is the result of multiple factors interacting, including shipping delays and a surge in container throughput. Factors such as the Red Sea crisis-induced shipping route changes and market demand have created a vicious cycle exacerbating congestion.

Shipping Delays: 

Red Sea Crisis-induced Route Changes: The Red Sea crisis has forced vessels to detour around the Cape of Good Hope, disrupting shipping schedules at major global ports. Many vessels unable to adhere to planned schedules have caused queuing at ports, leading to a "ship clustering" effect.

Increased Delay Times: As the world's second-largest container port, Singapore Port has become a new congestion hotspot. Currently, berthing delays at Singapore Port have extended to seven days, with the number of containers awaiting berthing rising to 450,000 TEUs, far exceeding the peak during the COVID-19 pandemic outbreak.

Increased Throughput:

Rising Demand: According to the Maritime and Port Authority of Singapore (MPA), there has been a significant increase in container handling demand at Singapore Port. Some shipping companies, aiming to catch up with the next scheduled departure, have diverted cargo from Southeast Asian countries to Singapore, prolonging vessel berthing and unloading times.

Volume Growth: In the first four months of this year, Singapore handled a total of 13.36 million standard containers, an 8.8% year-on-year increase. The MPA indicates that the average monthly container ship tonnage handled at Singapore Port in the first four months of this year reached 72.4 million gross tons, an increase of over one million gross tons per month compared to the same period last year.

PET Resin Trade Hindered by Shipping Delays and Soaring Freight Rates

According to Bloomberg data, Asia accounted for 57.8% of global polyester chips (PET) production capacity in 2023. However, Singapore's port congestion has directly hindered the global circulation of polyester chips.

The latest report from S&P Global shows that congestion at major Asian ports, particularly Singapore, has also led to an increase in container shipping prices. As of May 30th, freight rates on the Asia-to-Europe route reached $6,200 per 40-foot container, while rates to the North American West Coast also rose to $6,100.

Congestion at the world's second-largest container port presents a significant obstacle to the global trade of polyester chips, which are primarily transported via container ships.

On one hand, international logistics supply chains are facing a myriad of challenges, making it increasingly difficult to ensure timely deliveries of goods already in transit to downstream manufacturers of PET industry, thereby disrupting normal production processes.

On the other hand, despite the recent relative stability in PET prices, manufacturers anticipating import demand are also poised to confront the dual pressures of delayed shipments and rising freight costs. This situation paints a grim outlook on the international trade prospects for polyester chips.

Addressing Shipping Issues: Effective Strategies for Polyester Chips Demanders

Given the uncontrollable circumstances mentioned above, downstream demanders or traders affected by shipping in Singapore can take a series of measures to address the challenges.

Firstly, maintaining close communication with importers is crucial. By sharing real-time cargo transportation information and the liability risks associated with congestion, both parties can better coordinate response measures.

Secondly, if possible, importers can discuss with exporters the possibility of adjusting the destination ports to mitigate the impact of shipping delays. Additionally, importers expecting demand for polyester chips should strengthen supply chain management and discuss long-term supply chain strategy adjustments with exporters. These adjustments may include increasing buffer inventory, improving demand forecasting, etc., to ensure reasonable inventory levels and prepare for similar situations in the future. 

Moreover, downstream manufacturers should flexibly adjust production strategies according to actual circumstances to adapt to the challenges brought by supply chain changes.

For any information or business inquiries about PET chips, feel free to contact us at win-win@wkai.cc or sales@wkai.cc.