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Transhipment Hubs Hit Hard By Red Sea Reroutings

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June 20, 2024

Key transhipment ports around the world are facing severe congestion in response to the Red Sea crisis, with Singapore being a prime example.

The escalating crisis is due to abrupt changes in carrier service patterns and vessel reroutings, leading to increased yard congestion and declining port productivity, according to a new report from maritime consultancy firm Drewry.

Singapore, among other transhipment ports, is now grappling with a backup of shipping containers that rivals peak levels seen during the pandemic surge.

Despite an 8% YoY increase in throughput at Singapore port in the five months leading up to May, port productivity has suffered from a 22% increase in average parcel sizes, according to Drewry’s quarterly Ports and Terminals Insight report. The report reveals the handling time for 1,000 twenty-foot equivalent units (TEU) has risen by 10% to 0.32 days, translating to a 41% increase in exchange times for Ultra Large Container Vessels, from 1.1 days in January to 1.7 days in May.

Drewry pointed out that the current congestion differs from the pandemic-era congestion, which primarily impacted gateway ports due to high cargo demand and inland transport congestion. In contrast, the current crisis is directly affecting transhipment hubs due to drastic changes in individual exchanges.

The alignment of mainline-mainline vessel transfers has also been complicated by a high number of blank sailings, congested yards, off-window arrivals, and the prioritization of mainline vessels over feeder vessels, disrupting mainline-feeder services.

Drewry predicts that congestion at major transhipment ports will continue to be a significant issue. However, a slight relief is expected as carriers introduce additional capacity and restore some of their disrupted schedules.

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