International Maritime

Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

Global port congestion taking out capacity , creating more delays

By Michael Angell

Congestion at Mediterranean and Asian ports is contributing to worsening vessel schedule reliability and prompting concerns about further supply shocks for container capacity . Barring an end to the Red Sea crisis or slowing demand , industry experts see the congestion and delays persisting through the rest of summer .

With the global container fleet expected to reach 30 million TEUs in June , between 6 % and 7 % of that capacity is tied up by port congestion , according to Fabio Santucci , president of Mediterranean Shipping Co .’ s US operations .

Santucci , who spoke at the recent meeting of the Agricultural Transportation Coalition ( AgTC ), said COVID-19 era port congestion took out 15 % of vessel capacity at its peak . While there have been more ships delivered since then , he said the level of port congestion is “ historically significant .”

“ It ’ s not as high as the COVID era , but it ’ s the secondhighest since 2008 ,” Santucci said .

The rerouting of ships away from the Suez Canal is forcing more cargo to be dropped off at western Mediterranean ports for transshipment in the rest of the region . Ships are waiting longer for a berth due to those ports being overwhelmed with cargo , Santucci said .

“ Not only are we adding 10 days of transit time bypassing the Suez , we are transshipping cargo in ports that are not big transshipment hubs ,” he said . “ They ’ re being very challenged .”

The Port of Valencia saw a total of 300 container ships arrive during May , according to Sea-web , a sister product of the Journal of Commerce within S & P Global . It was the highest number of arrivals in 12 months of data . One-third were ships over 6,000 TEUs , which was also a 12-month high .

Container ship calls at Barcelona ( pictured ) averaged 23 hours in May , the highest in 12 months . Shutterstock . com

Container ship calls to the Port of Barcelona hit 196 in May the lowest since December 2023 , Sea-web data shows . However , container ships are spending more time at the port , with calls averaging 23 hours , the highest in 12 months .

Other more transient factors such as heavy fog at the Shanghai and Ningbo ports and heavy rains in Southeast Asia have also contributed to global congestion , Santucci said . But “ I don ’ t believe the transshipment ports are going to get better ” over the summer , he added .

Santucci said the direct consequence of congestion is worsening global schedule reliability . Only 52.1 % of ships across the world were within one day of their scheduled arrival in April , according to Sea-Intelligence Maritime Analysis . While that ’ s up from January 2024 ’ s low of 51.5 %, the April reading was the second lowest since October 2022 .

“ We are transshipping a lot of cargo in ports that are not big transshipment hubs .”

With ships delayed or sailings cancelled entirely to restore schedules , US exporters continue to face the challenge of when they can stage an export container at a port . Natasha Vang , director of logistics at Touchstone Pistachio , said 29 % of her outbound shipments in 2024 have been affected by vessel delays and resulting changes to the earliest return date ( ERD ) for bringing a container to port .

Janelle Stahl , global logistics manager at soybean exporter SB & B , said an ocean carrier told her of a delayed ship two weeks before its expected arrival , but the ERD didn ’ t change . On the day the containers were supposed to be trucked to the port for delivery , she was told the ERD had changed .

Santucci said vessel arrivals were easier to calculate when it was simply the time between a ship reaching its berth from just outside the port zone . Now , many nonmaritime factors such as terminal congestion and rail or truck delays can also impact vessel schedules .

“ Any time terminals , transshipment ports and rail ramps cannot process cargo in a reasonable time , there are lagging effects that create vessel bunching ,” Santucci said .

Lars Jensen , president of consultancy Vespucci Maritime and a Journal of Commerce analyst , told the AgTC audience port congestion is one of the drivers of the current surge in spot rates . “ There are growing problems with port congestion in Asia , with port congestion in the Mediterranean , all directly due to the Red Sea crisis ,” he said .

Some of the current capacity crunch could be that shippers are moving products earlier in the season , in which case the strain could ease , Jensen said . But until carriers can return to Suez voyages , supply will be tight .

“ This could be a phenomenally early peak season , in which case , things could ease in three , four , five weeks ,” Jensen said . “ The market is so precariously balanced right now that it could easily tip into a situation where we are back in a pandemic-level disruption .”

email : michael . angell @ spglobal . com

16 Journal of Commerce | June 17 , 2024 www . joc . com