Port congestion has continued to make headlines this year, with Asian ports and key transhipment hubs, including Singapore and Colombo, reaching critical levels.
Singapore has been hit by the worst congestion since the pandemic due to a rerouting of maritime traffic in the Red Sea to avoid Houthi attacks off the coast of Yemen. Colombo has also seen an unusual surge in volume, exacerbated by vessel diversions linked to the Red Sea disruptions, with “some ships languishing for over five days before securing a berth”, according to Anne-Sophie Fribourg, VP of digital freight forwarding company ZenCargo.
These issues have added pressure to main trade lanes and are impacting secondary ports in countries such as India and Bangladesh, but there are other crucial stretches of water that could further impact congestion in the region.
Frank Kenny, a former Gartner analyst and current director of industry strategy at tech company Cleo, points to the fact that the Strait of Malacca is increasingly susceptible to military conflict, potential piracy, and the effects of climate change.
“The narrow strait, located between East Asia, the Middle East, and Europe, is a critical chokepoint that accounts for about 30% of global trade, including roughly 80% of China’s energy imports,” he notes, adding that “a disruption here would be catastrophic for the global supply chain.”
Port congestion issues aren’t just restricted to Asia. Ports on the US West Coast have also experienced bouts of congestion over recent years. This is cause for concern when 40% of containers from Asia come through California’s San Pedro Bay complex, which handles more containers per ship call than any other port complex in the world.