Congestion rises at ports in China, Southeast Asia amid higher volumes, Red Sea crisis

Ports in China and Southeast Asia have seen increasing congestion in recent days amid higher volumes passing through the region ahead of the Labor Day holiday May 1 and vessels bunching up due to the Red Sea crisis, leading to higher or more stable freight rates for ex-Asia trade lanes.

Platts assessed PCR 53 -- North Asia-to-Indian subcontinent -- at $1,200/FEU, and TCR 53 -- North Asia-to-Indian subcontinent -- at $1,100/TEU, on April 26, $100 higher on the week, showed data from S&P Global Commodity Insights.

Market participants have reported congestion at China-based ports, Singapore, Port Klang, Jebel Ali and Columbo -- with the last three being key transshipment and intermodal hubs in light of the Red Sea crisis -- leading to carriers also dumping containers at Singapore in an attempt to catch up with and meet schedules.

"The main port giving us issues is Ningbo as one of our main transshipment ports in China is only releasing bookings that have historically been supportedat origin, making it difficult for new customers to secure shipments," a carrier source said.

Sources reported a two-to-three day delay in berthing at Port Klang and Singapore and a five-to-six day delay at Jebel Ali. During normal circumstances the same ports see berthing on arrival or delays of up to only half a day.

Goods like ACs and refrigerators, automobile parts, machinery and solar panels were heard moving from China to other Asian ports like Chittagong, Mundra and Jebel Ali.

"Utilization levels are also high currently, but the other issue is container availability at Asian ports getting worse since it takes time to bring empties from the US and Europe," a source said.

"20 foot containers are not available at China base ports whereas there is also a shortage of 40 foot containers at Ningbo," another source said.

On the North Asia-North America side, rates for cargo bound for the East Coast were assessed at $3,500/FEU, with West Coast rates called at $2,900/FEU. Those rates rose $200 and $100, respectively, during the week ended April 26, with sources reporting a lack of space into mid-May and unclear rate intentions for May and beyond. While most market participants in North America said they have not been challenged by a lack of equipment, congestion amid the lead up to the Labor Day holiday has exacerbated existing space issues.

North Asia-North Europe freight prices also strengthened significantly as carriers released general rate increases for the start of May. A lack of vessel space and box availability along with challenging weather conditions have contributed to supply-side challenges for cargo owners as carriers raised rates for May 1.

On April 26, Platts Container Rate 1 – PCR 1 – observed a $1,000/FEU increase in the space of three days to $4,000/FEU, a rate level last seen on Feb. 22, and the trend is set to continue with further GRIs announced for the middle of May by liner majors.

Sources expect more blank sailings in the upcoming weeks especially on the Trans-Pacific since schedules remain uncertain with transit times increasing due to vessels going around the Cape of Good Hope.

For the North Asia-Indian Subcontinent route, some carriers removed vessels from their existing loops to add more capacity towards Europe and the US.

"There is congestion at Jebel Ali T1 and T2, with rain adding to the turmoil. Hence ships are also diverting to Port Khorfakkan instead of Dubai," a source said.

The Platts Container Rate Index -- a weighted average of Platts' key assessments -- stood at $2,034.73/FEU April 26, up nearly 15.60% from the start of the month, showed S&P Global data.