Home Economy Global ports grapple with backlog due to congestion of the Suez Canal

Global ports grapple with backlog due to congestion of the Suez Canal

Delayed cargo due to the container ship Ever Given in the Suez Canal earlier this month is starting to arrive at ports around the world, prompting workers such as Singapore transporter Harris to rush through the backlog. .

Like congestion has been removed and the Egyptian port workers drew hundreds Ship delayed Through one of the busiest waterways in the world, Harris “didn’t have a lot of orders. . . to collect “. But now “we could see more orders,” he said, adding that his company had warned employees there would be a job jump in the weeks after the canal reopened.

Singapore is the most popular destination for container ships stuck in the Suez queue – out of the nearly 100 delayed boxers, about 20 percent are destined for the Asian hub, according to data from the group project. Supply chain vision44.

But it doesn’t mean the single port has to fight an increase in traffic – and this puts new pressure on global supply chains that have struggled to cope with pandemic problems. coronavirus caused.

Keith Svedsen, CEO of APM Terminals, the world’s third-largest container terminal operator, said the main impact from the Suez disruption was felt in Europe this week, with “pressure points” at ports of Spain and Northern Europe.

Terminals in central ports in Malaysia, Oman, Morocco and Spain have been operating in “emergency mode or at full capacity” to cope with the huge increase in volume as carriers load. to forward to other ports, he added.

The Port of Antwerp in Belgium is expected to start the hasty operation starting this week that will last until June, though it said it can cope without major delays.

Its rival in Rotterdam also tells a similar story. “The bottom line is that we are taking care of this issue,” said Leon Williams of the Port Authority of Rotterdam. “The ships will have to wait longer to unload but that is not a crisis.”

PSA, one of Singapore’s two main commercial port operators, said the “first wave” of container ships from Suez has reached the island’s shores, adding their cargo has been “processed. advantageous “thanks to” detailed pre-planning “.

While European and Asian ports have been training themselves to deal with congestion, the increase in traffic has created painful problems outside the ports. Trucks and railways moving cargo to and from ports have become congestion points at ports like Sweden’s Gothenburg. “The whole system is moving toward a normal week,” Svedsen said.

The goods are lined up in the Suez queue and are initially expected to take up to 10 weeks now, partly due to the limited number of trucks in the warehouses, British importers said.

Meanwhile, euro-zone suppliers’ delivery times are the longest in 23 years according to the IHS Markit purchasing managers index, an extensively tracked survey of business activity. ; as a result, input cost inflation of factories in the euro zone has risen to its highest level in a decade.

The chart shows the type of cargo held while the Suez Canal is congested.  Photo of goods on a delayed container ship, the number of containers in TEU (unit equivalent to 20 feet).  Asia to Europe, Asia to the United States, India to the United States and the United States to India

The further disturbance to the global logistics network that has been prolonged by the pandemic has pushed the costs of exporters up and strained production lines.

Global shipping fought The chaotic schedule of months due to the changing consumer demand, as well as the factory shutdown and Covid’s deterrent measures, slowed the operations of the ports. As a result, since last fall, there has been a shortage of empty containers where they are needed.

In February, PSA in Singapore said it was “increasing additional capacity and resources” due to “spike in vessel volumes and container volumes”.

Shipping companies are looking to return empty containers from Asia from Europe as quickly as possible to avoid them any more hold issues.

Some have resorted to buying new boxes. This month, Hapag-Lloyd invested $ 550 million to purchase 150,000 20 ft containers. Rolf Habben Jansen, chief executive of the German carrier, said he expects to return to pre-pandemic service levels by mid-third quarter, thanks to the easing of Covid-19 restrictions in Europe. .

“We see some light at the end of the tunnel. We could have done it without the Suez incident, ”he said. “The boxes will be packed in the coming weeks.”

The shortage of containers pushed up freight rates from Asia to Europe, peaked in March and have begun to decline until congestion Suez. The price of a 40-ft container has since risen 7% to $ 7,807, according to booking platform Freightos – 450% higher than a year earlier.

The dollar's line chart for each 40ft container shows that container shipping rates rebound

Alan Murphy, chief executive officer of consulting firm Sea-Intelligence, said European exporters facing higher prices as a result of the rush to bring containers back to Asia, especially for low-value items and goods like scrap.

“If you are looking to export anything out of Europe, you will find it difficult to find containers and space without having to pay very high freight rates,” he said.

Higher prices are not the only challenge. Pawan Joshi, executive vice president of product strategy and management at E2open, who has a background handling 26% of shipping orders worldwide, says component shortages in the supply chain are at risk. muscle is severely affected.

Cite the example of computer chip Earthquake equipment, generators and air conditioners, he says, are among the production lines that pose a similar risk of disruption.

“More silent and lasting disruptions come from making other products,” he said. “If you put that [against] Given the semiconductor crisis, we expect to see that – not immediately because of inventory. [at the moment], but in the coming weeks. “

Additional Report by Valentina Romei



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