Maritime traffic diversion from the Red Sea and the Suez Canal has caused congestion at the port of Singapore, one of the busiest in the world. The congestion is expected to spread to final destinations, too, according to a Bloomberg report.
The report details that as the Yemeni Houthis continue to target Western ships in the Red Sea, shipping operators have moved much of their traffic around the Cape of Good Hope. One consequence of this is that these ships can no longer call at a Middle Eastern port along their way between Asia and Europe to unload part of their cargo and refuel. Now, all the unloading at refueling is done in Singapore.
Last month, Bloomberg wrote, that Singapore's port utilization rate rose to 90% in evidence of the worsening situation-the optimal utilization rate for a port stands at 70%. As the utilization rate rises, so do waiting times for ships at the port. Earlier this month the Maritime Executive reported that these waiting times have growth from about half a day for a container ship to as long as seven days.
All this is adding to shipping costs as well as to fuel consumption-transit times from Asia to Europe have increased by 40% to Mediterranean ports and by 15% to Northern European ports. Shipping costs have returned to levels last seen during the pandemic lockdowns, experts note, and they may yet go higher before they start easing.
"While these inefficiencies are largely centered in the exporting regions in Asia and some trans-shipment hubs, it will only be a matter of time before these issues relay on to the importing destinations in EU and the US," HSBC analysts said in a note cited by Bloomberg.
Meanwhile, the Houthis hit yet another ship traversing the Red Sea this week in the latest sign that the situation is not going to change radically anytime soon. The Greek-owned vessel, the Tutor, sustained damage to its engine room and flooding.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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