The world’s second busiest container port in Singapore has experienced a significant surge in congestion, forcing carriers to extend charter agreements and build container fleets in anticipation of a prolonged peak season. Shipping delays in Singapore have more than doubled in recent weeks, which observers warn could lead to higher prices for consumers. This situation arises from a shortage of container ships and port congestion, contributing to an impending supply chain crisis.
Port operator PSA Singapore is actively working with shipping lines to mitigate disruptions, communicating with vessels about their arrival times and volume information in advance to manage the situation better. The bottlenecks at Singapore are attributed to various factors, including diversions caused by unrest in the Red Sea and Chinese exporters rushing to ship goods ahead of impending trade curbs.
Earlier this month, the United States announced an increase in tariffs on $18 billion worth of imports from China, targeting strategic sectors such as electric vehicles (EVs), batteries, steel, and critical minerals. The tariff rate on EVs is set to quadruple to 100 percent this year, while the rate for semiconductors will surge from 25 percent to 50 percent by next year, according to the White House on May 14. Chinese exporters are now in a race to beat the looming trade restrictions.
Average container prices in China, which were already on the rise, have spiked further by 88 percent in the last two months. Typically, these ships take routes like the Strait of Malacca, docking in Singapore. However, the increasing volume of vessels has led to severe congestion. Currently, it takes around seven days for each vessel to be berthed, compared to one to two days previously. This month, Singapore’s port has already received about 1,000 ships, up from 639 in April.
The ongoing congestion at Singapore’s port highlights the broader challenges facing global supply chains, with significant implications for international trade and consumer prices.
