Singapore, the world's second busiest container port, is facing a major challenge: congestion and a shortage of ships and containers. This is causing delays for ships, and high shipping costs, with some waiting up to seven days to dock compared to the usual one or two days.
The impact of this congestion extends far beyond Singapore's borders. It's affecting roughly 7% of the world's shipping fleet (nearly 2 million TEUs).
Impact on Businesses with high shipping costs
These delays create a domino effect, disrupting the reliability of shipping on major routes like Asia-Europe. This disruption is reflected in rising shipping prices, with some high shipping costs, increasing by up to 88% compared to just two months ago. China's container futures market also shows a significant jump in prices.
As a result of these challenges, some companies may turn to airfreight for urgent deliveries, potentially putting further strain on the already stressed air cargo market, particularly for the e-commerce sector. Electronics and electric vehicles in the manufacturing sector are likely to be hit the hardest.
Why does demand for Shipping remain strong despite high shipping costs?
Despite these issues including high shipping costs, the demand for shipping hasn't disappeared. Exporters and importers still need to move their goods worldwide, and their customers still expect timely deliveries.
For clients who frequently export or import from Shanghai or Shenzhen, China, please be aware that spot rates on these routes are likely to increase.
To secure your cargo space on our containers, please place your booking with us at least 7-10 days prior to your departure date
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