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China Port Delays Cause Ships to Bypass Singapore Bunkering Hub

FILE PHOTO: A container ship docks at Pasir Panjang terminal in Singapore November 17, 2020. REUTERS/Edgar Su/File Photo

China Port Delays Cause Ships to Bypass Singapore Bunkering Hub

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April 18, 2022

By Ann Koh (Bloomberg) —

Container and bulk ships are skipping Asia’s largest refueling hub in Singapore as delays at ports in China and elsewhere prompt vessels to reschedule their stops to save time. 

A total of 3,020 ships called at the city state to refuel last month, 441 fewer than a year earlier, according to preliminary data released by the Maritime Port Authority. That’s led to bunker fuel sales falling to 3.77 million tons in March, the lowest seasonally since 2016. Bunkering is the supplying of fuel for use by ships.

Fewer ships are stopping at Singapore as congestion at ports globally prompts companies to skip the transit hub between East and West. Shanghai’s lockdown to contain China’s worst Covid outbreak since 2020 has created gridlock at the world’s largest container port, with queues of vessels building there and at other stops handling diverted shipments. The situation has put more pressure on already strained global supply chains.

Hundreds of bulk ships are waiting off East China to unload raw commodities and are likely to refuel in Guangzhou or Zhoushan instead of Singapore to save on time, traders said. Ships are “locked up waiting in congested areas” and are burning lots of fuel, Jeremy Nixon, chief executive officer of Ocean Network Express, said on April 5.

Singapore is typically a refueling stop for container ships passing through the Strait of Malacca as they take goods from Northeast Asia to Europe. Bulk carriers transporting iron ore from South America to China and tankers carrying crude oil from the Middle East to Asia also pass the port.

MSC Mediterranean Shipping Co. canceled sailings from Europe to Asia that would have included stops in Singapore, according to notices sent to customers.

“Given all the circumstances, it would make more sense to bunker in China than make a call in Singapore, unless the price of bunkers is absolutely monumental,” said Esben Poulsson, chairman of the International Chamber of Shipping in an interview. “It’s no secret that China wants to compete with Singapore in this business.”

Some ships will also refuel at Fujairah in the United Arab Emirates when prices are cheaper than in Singapore, he said.

© 2022 Bloomberg L.P.

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