Singapore port faces growing congestion amid Red Sea attacks

Singapore’s port, one of the world’s busiest, is experiencing prolonged congestion due to vessel diversions aimed at avoiding the Red Sea. Attacks by Yemen’s Houthi rebels have led shipowners to bypass the Suez Canal, opting instead for the longer route around the Cape of Good Hope. This change prevents ships from refuelling or unloading cargo at Middle Eastern ports, exacerbating marine gridlock near Singapore.
The Houthi attacks have disrupted global supply chains. Still, the impact is especially severe in Singapore, a critical hub on the busy shipping routes connecting Europe, the Middle East, and China. The increasing congestion at the port, a major refuelling and container redistribution centre, is expected to cause delays in goods delivery and drive up shipping rates.

Yard utilisation rates at Singapore’s port reached nearly 90% last month, up from an optimal 70%, according to Jayendu Krishna, a Director at Drewry Maritime Services. “There’s a lot of rerouting going on, leading to changes in vessel schedules and a pile-up of transhipment container boxes at certain ports,” he said, noting a “bunching of ships” as wait times and congestion grow.

Singapore’s container volumes totalled 16.9 million twenty-foot equivalent units (TEUs) in the first five months of the year, an almost 8% increase from the same period in 2023, the Maritime and Port Authority of Singapore reported. Container lines, including CMA CGM, have moved more tonnage through the city-state’s port.
Early signs suggest that container congestion in Singapore may be starting to ease this month, according to shipbrokers, which could prevent further pile-ups. Malaysian ports also saw increased activity last month, with Tanjung Pelepas and Klang recording record monthly throughput in May.

In contrast, major Middle Eastern ports have seen a decline in traffic. Salalah in Oman, a key transhipment hub, experienced a 17% drop in volumes in the first quarter, according to Drewry data.

The container ship backlog is unlikely to clear soon, with HSBC Holdings analysts, including Parash Jain, predicting further increases in spot rates for vessels. “While these inefficiencies are largely centred in the exporting regions in Asia and some transhipment hubs, it will only be a matter of time before these issues relay on to the importing destinations in the EU and the U.S.,” they noted. Singapore’s waters, typically crowded with various ships, are expected to become even busier in the coming months as the impact of rerouting works its way through the global transport system. Last month, 44 container ships waited for four days off Singapore, compared to just 14 in January, Drewry data shows.