Block Background

Congestion at the Port of Singapore: The effects for UK businesses

Large shipping ports, around the world, are experiencing unprecedented levels of congestion. With containers building up just outside of the Port of Singapore, effects are being felt all the way to Piraeus in Greece. The backlog is reportedly 22% higher than normal levels.

 

The Congestion in Singapore

 

The number of container vessels anchored and waiting to dock in Singapore, last week, reached 53. This is the highest number since recording began in April. But unlike the previous congestion because of a typhoon, this time a surge in Covid-19 cases caused the issues.

As the 2nd largest port in the world, the Port of Singapore relies on excellent operations and logistics. As is the case with ports all over the world.

 

The knock-on effects

 

Ports within southeast Asia have also experienced increasing levels of congestion. As too have ports across the pacific in the USA. Workers in the ports of Southern California are working around the clock to reduce the backlog of container vessels waiting. Whilst in the Greek port of Piraeus, lines of waiting ships were stretching into the Aegean sea.

 

The bigger picture

 

This congestion around Singapore is just the latest issue to arise in relation to the problems around supply chains. Following the impactful and global, coronavirus pandemic. Previous issues have included a shortage of shipping containers. Plus, issues with cost and staffing around Brexit, and the rise of shipping costs.

 

What the future of shipping looks like

 

The world’s largest shipping line, Maersk, has stated the global container demand will grow faster than previously thought. They have seen clients aiming to meet strong consumer demand. Increasing sales and inventory through increasing transportation.

Despite the current issues, the trends are showing an increase in usage of ocean-based freight shipping. Which is estimated to grow between 7-9% this year. 

But, problems we are seeing are due to the slow turnaround at ports. Not the capacity of containers, the number of containers available, or with the vessels. But of logistical problems themselves, in how quickly they can be emptied and filled back up.

 

The impact for Think Timber

 

Freight companies have seen a huge boost, with demand surging, so too did shipping costs. With businesses bearing the brunt of these costs, and ultimately having no choice but to increase prices to keep afloat.

This congestion will no doubt have an impact on our supply chain here at Think Timber. Although we aim to foresee and plan for such situations, due to our reliance on importation as a UK business, our supply chain may be affected.

 

If you’d like to discuss the congestion issue in Singapore further, and how this will affect our supply chain, please get in touch. Email us at hello@thinktimber.co.uk

 

Resources used:

Bloomberg.com

ttnews.com