Port Congestion Archives - Excelsior Worldwide Logistics Corp.

Container Congestion in Singapore: How It Affects Worldwide Logistics?

excelsior on July 30, 2024

Port congestion is considered the most compelling issue in the shipping industry today. It is a situation where ships experience backlogs while waiting to load or unload cargo due to overbooked capacity ports, leading container ships to berth instead.

This logistic concern has led to numerous concerns regarding supply chains, higher shipping costs, and major shipment delays.

In fact, Singapore, known as the world’s largest transshipment hub and the second-busiest port in 2023, is also exposed to and affected by container congestion, which disrupt operations and lead to lengthier transit times.

According to Chee Hong Tat, Singapore’s transport minister, the issue concerning Singapore port congestion has gotten worse as 90 percent of the container ships arrive off-schedule.

This Singapore congestion has been aggravated by the Red Sea Crisis, which prolonged the rerouting of vessels and ocean carriers between Asia and Europe and damaged global ocean shipping.

With this concern affecting not only Singapore but also worldwide logistics, various factors have been added to the list, which has generated huge impacts on the shipping industry and consumers.

Sources of Port Congestion

Weather Conditions

Severe weather conditions, like storms and rough seas, hinder the normal operations of shipping services. Given that cargoes and goods are transported out of the channel by sea, massive delays are possible, which could knock ports and customers off their feet.

Labor and Manpower Disputes

Port workers, such as truck drivers, dockworkers, port operators, and other staff members, are responsible for packing, unloading, document checking, cargo clearing, and cargo moving. Strikes, disputes, stoppages, and other job working conditions could limit and drastically slow down these services.

Poor Infrastructure and Equipment

Container congestion is largely caused when ports lack cargo handling equipment like chassis, and there is insufficient storage, container yards, and berths. Due to infrastructure deficiencies, major backlogs lead to the piling up of cargo and containers, which could lead to delays.

Demand Surges

The influx of imports and exports from the e-commerce market and platforms has become prevalent during the pandemic and continues to the present. The demand surges swamped the port’s capacity, causing service disruptions and container shipping traffic due to the large amounts of goods that needed to be transported.

Impacts of Singapore Congestion on Worldwide Logistics

Container Congestion in Singapore: How It Affects Worldwide Logistics?
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Major Delays

As shipping operations have been halted due to container congestion, a domino effect could spread throughout logistics. A supply chain crisis could emerge and cause longer transit periods, backlogs, and delays in shipping schedules, which will directly impact the consignees and consumers.

Generates Extra Costs

When a ship stays longer in port, the higher the costs and the driving of inflation. Singapore container congestion will not just cause significant delays in deliveries; this will generate extra fees for the consumer due to increased billing for port services and fuel usage. Higher freight rates for shipping companies are also possible; hence, this could lead to congestion surcharges.

Lost Revenue for Businesses

A small delay could lead to a huge disturbance. Congestion could also impact small businesses, causing them to lose revenue and income due to inventory delays, production discontinuance, and missed sales due to customer unsatisfied remarks.

How to Deal With Singapore Port Congestion?

It is essential to illuminate potential solutions that could be applied to avoid Singapore port congestion and future delays.

Thorough Planning

Through intensive and streamlined planning, delays, shipping methods, production schedules, and supply chain operations would be seamlessly solved and anticipated, lessening the impact of congestion.

Enhancing Port Infrastructures

As the shipping industry becomes increasingly relevant, meeting the demands also means expanding and enhancing the needed infrastructure. Having a larger capacity of ports and sufficient containers, berths, and storage will limit congestion.

Diversifying Routes and Logistics Network

Optimizing routes and searching for alternative gateways with larger capacity and low congestion levels are necessary. Finding alternative transportation should also be considered to ensure prompt delivery and freight assistance. In this case, it is also essential to look for a freight forwarder with a vast logistics network to handle delays and shipping issues professionally.

Conclusion

Although PSA Singapore claims to deal with shipping lines and freight services to minimize container congestion, it is still necessary to be aware of how the shipping industry affects global logistics and how it should adapt amidst the rising issue of port congestion.

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What You Need to Know About Port Congestion – Infographic

excelsior on September 23, 2021

Port congestion is when a ship coming into a port for the express purpose of cargo or passenger operations is either unable to berth at the desired location or needs to wait for an opportunity for docking.

In such a case, there is no space for the ship to unload cargo, and therefore all operations stop. Port congestion is a major problem faced by most ports worldwide. It can occur for different reasons such as extreme weather conditions, shortage of fuel or diesel, breakdowns, etc.

To combat port congestion, ships are often required to call at sea or port to unload their cargo. However, this is not always possible, and therefore the only solution is to store the excess tonnage normally used on board and ensure that the ship has space available when called at sea.

Why does Port Congestion Happen?

Increased fuel surcharges, stricter tankers rules, tougher security procedures, global events, and a tightening economy contribute to port congestion. Cargo that used to arrive at its specified time and date may now take longer due to weather concerns and extra time spent checking for illegal or dangerous material loads. Even smaller shippers can encounter extra time delays when shipping lines wait for their overseas carriers to return from a trip. These factors combine to cause congestion, especially when extra time is added to each shipment’s delivery date.

Port Congestion in the Philippines

With increasing international trade and immigration, the Philippines is experiencing port congestion. The burgeoning of container activities has resulted in a large build-up of material at sea and land in the country. A large portion of this build-up occurs at the main international port in Manila.

The rising population and increased traffic at the country’s ports have resulted in inefficiencies in its transport system – in which Manila has long been a major problem area. In some areas, there are physical problems caused by the number of ships and containers. In other areas, the inefficiency caused by inadequate infrastructure makes it difficult to use the existing ports to their fullest potential.

In addition to affecting the overall transport system of the country, port congestion has also affected the handling of goods. Many goods come by sea to the Philippines either by land to the larger cities or across the island on trucks. Businesses are affected when port congestion forces goods to be unloaded at each port and then transported to larger harbors. The delays caused by port congestion can affect an exporter’s profit schedule, making the whole exporters line more difficult than usual.

Preventing Port Congestion

The solutions provided by a global freight forwarding company can alleviate these problems. A company that can help an international trade broker better manage its supply chain can help them avoid common mistakes that can occur during port congestion.

Freight forwarding companies can also provide advice on the best way to streamline their operations and increase their ability to meet the demands of their customers. These experts can help ensure that the long-term viability of an international trade business is not put at risk due to short-sighted actions by shipping companies and brokers.

Excelsior Worldwide Freight Logistics conducts free orientation for those who are willing to learn. It is our advocacy to share our knowledge & experience worth more than a decade in the business. Visit our website today at www.excelsior.ph to learn more about our service.

Current State of Port Congestion in the Philippines

excelsior on March 18, 2019

Basically speaking, port congestion refers to the situation wherein a growing number of vessels are starting to queue up outside the port in order to wait for any available space where they can load or offload their cargo. And speaking of the Philippines, maritime-related problems such as port congestion can be quite inevitable, considering the fact that vast oceans and seas geographically surround the country.

Before the advent of their colonizers, the settlers of the Philippines once created wide trading networks within every island that stretches as far as to other neighboring countries like China, Japan, Cambodia, India, Borneo, and the Moluccas.

During the Spanish rule, the trading relations with the said countries continued to flourish, only this time the Philippine capital of Manila has been turned into the center of commerce in the east closing its ports to any countries except Mexico, establishing the what was known as the Manila-Acapulco Trade or the Galleon Trade.

But enough with the history, for this article, will be discussing all about what’s the current situation of the ports here in the Philippines. Intense congestions concerning our harbors can bring detrimental effects for the overall economy of the country in the long run. This is because time is extremely precious for importers, exporters, freight forwarders and other logistics services provider. And with the long delays brought by the port congestion, their operations will surely be disrupted indeed.

How’s the port congestion in the Philippines nowadays?

Based on the most recent news published on various trusted news sites, it seems like there’s some occasional fiasco going on with the government and the Local Truckers Association of the Philippines. This implies that the problem does not lie on the number of the vessels, but on the long queue of trucks waiting inside the terminals. According to PortCalls Asia, the government denied the allegations of any cases of port congestions, for this issue’s roots, can be traced back to a separate problem about by “the high number of empty containers clogging the terminals and this gave the impression of port congestion by the policy of port operators to limit the entry of empty container vans.”

Lest according to the government, the flow of operations within the Philippine ports especially Manila is still within the threshold of being manageable under international standards. As recent as the previous years, they stated that the average dwell time of the ports are seven days, and the utilization level of yards goes in for over 85%. Meanwhile, the quay crane production rate still holds on to 24.84 moves per hour even bearing the international standard of 25.

How this “empty containers” type of port congestion affects the economy?

While there it can be implied that there is nothing to worry about, the congestion of the empty containers in some ports in the Philippines can pose problems like late deliveries of several kinds of goods. It seemed clear that limited space for container yards somehow affects the cost of trucking in the country.

The Conclusion

It can be true that port congestion in the Philippines does exist in a way or two.

However, as stated in the book “Easing Port Congestion and Other Transport and Logistics Issues,” the best way to deal with it is to accept the fact that in most cities like Manila, factors such as port traffic, economy, and human population far outgrows the infrastructures that help connect the ports to nearby provinces that host industrial and commercial estates.

As of now, what we can do now is to trust the government’s figures and hope for the best.

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