Congestion puts pressure on global container shipping

Global port congestion continues to worsen, with millions of containers currently waiting to berth and shipping delays mounting in both Asia and Europe. Despite the growing bottlenecks, container rates remained relatively stable this week.Container rates have declined since mid-July as demand has weakened, but limited capacity is keeping prices above pre-peak season levels, according to freight booking and payment platform Freightos. Congestion at major Far East ports is contributing to current Asia-Europe rate levels, as are backlogs at Northern European hubs, partly caused by low, although improving, water levels on the Rhine. Despite these disruptions, container rates remained more or less stable this week in the Drewry World Container Index.According to shipping market intelligence firm Linerlytica, more than 4.3 million TEU of containership capacity is currently waiting to berth at ports worldwide. GoComet Port Congestion reports waiting times of 18 days at Tawau in Malaysia, compared with nine days in Shanghai and four days at Rotterdam’s Waalhaven.East Asia is being hit by typhoons, causing severe flooding, congestion and shipping delays across the region, according to shipping company Maersk. More typhoons are expected.According to maritime research and consultancy firm Drewry, the problem is not temporary. Waiting times at ports in the first seven months of this year were almost twice as long as in the same period in 2019, before the Covid-19 pandemic.Container market demand has been extremely resilient, according to Vincent Clerc, CEO of A.P. Moller-Maersk. This growth is being driven by exports from Asia. During Q2, demand out of Asia grew by 6.2%, he said during an earnings call. “This growth and increasing trade imbalances comes on the heels of about 15 years since the financial crisis where investment into terminal capacity has lagged. With market demand growing faster than terminal capacity, we were bound to hit a bottleneck at some point.”Poor infrastructure maintenance takes its toll In the Netherlands, poor infrastructure maintenance is increasingly taking its toll on the logistics sector. In July, a major transport artery, the Merwedebrug, was already closed to the approximately 18,000 trucks and coaches that used it every day. Now, trucks will soon also be banned from the Houtribdijk, which connects the provinces of Flevoland and North Holland. With an estimated 1,500 trucks using the route each day, it is less busy than the Merwedebrug, but it is nevertheless of great importance to the North Holland region and the agricultural sector.More Dutch bridges and roads could be closed to heavy goods vehicles in the future. Rijkswaterstaat, the government agency responsible for the country’s main infrastructure, says the maintenance challenge is greater than the available budget, meaning that not all work can be carried out on time. The Zeelandbrug is also closed for six weeks, while access to the Westerscheldetunnel will be restricted for four months from January 2027.