Port congestion continues to worsen worldwide. More than 10 per cent of the global container fleet was idle last week due to waiting times and congestion in ports.
According to analysts at Linerlytica, this means port congestion has reached its highest level in four years. At the same time, spot rates for container transport are rising sharply, particularly on routes from Asia to Europe and the United States.
Linerlytica estimates that 10.9 per cent of the global container fleet was anchored last week as a result of port congestion. In total, this amounted to approximately 3.72 million TEU of container capacity that was temporarily unavailable to the market.
This is a significant problem at a time when demand for container transport remains strong. According to Linerlytica, global market demand, measured in TEU-miles, recently grew by 7.3 per cent. This was offset by a 5.4 per cent increase in the container fleet.
This combination of high demand, limited available capacity and increasing waiting times is creating a tight market. For shippers, port congestion means not only longer transit times, but also greater uncertainty regarding sailings, arrivals and onward transport. Further information on international container flows can be found on the sea freight page.
The mounting port congestion coincides with rapidly rising spot rates. According to Drewry’s World Container Index, the cost of shipping a 40-foot container from Shanghai to Rotterdam rose by a further 7 per cent this week. The rate thus stood at $4,682.
Prices are also rising sharply on US routes. According to Drewry, a container from Shanghai to Los Angeles costs $6,349, a 10 per cent increase in a single week. For the Shanghai–New York route, the rate stands at $7,902, 11 per cent higher than a week earlier.
The market situation is favourable for shipping lines. Anyone needing space on fully booked vessels will have to pay more. For importers and exporters, this means that booking early, realistic planning and securing good rate agreements are becoming increasingly important. Read more about sea freight rates and how to request a quote.
On the Shanghai–Rotterdam route, the peak season remains clearly evident. Drewry expects spot rates to continue rising in the coming weeks. This is striking, as the market actually cooled down more quickly last summer.
This year, the peak season began earlier. Demand for space started to rise as early as May. As a result, sailings filled up more quickly, giving shipping lines greater scope to increase rates and surcharges.
MSC anticipates that the peak has not yet been reached. The shipping line has published a general rate increase for the second half of July, targeting an Asia–Northern Europe rate of $7,700 per 40-foot container. An earlier price announcement of $7,500 per container had already been in force since 1 July.
The fact that shipping lines publish high rate levels does not mean that every shipper automatically pays that amount. In practice, the final rates remain dependent on volumes, contracts, booking times, surcharges, route choice and the relationship between the shipping line, the freight forwarder and the customer.
Nevertheless, the direction of the market sends a clear signal. When port congestion takes capacity off the market and ships fill up, shipping lines gain more room for negotiation. As a result, spot rates can rise more quickly than many shippers expect.
For companies importing from Asia, it is therefore important not to focus solely on the lowest price. Availability, reliability, cut-off times, transit time and the risk of delays ultimately determine the true cost of a shipment. More practical information can be found on the pages about importing, container handling and Incoterms.
In Asia-Europe trade, current rates are high but not historically exceptional. The current rate of $4,682 per 40-foot container from Shanghai to Rotterdam is, however, above the peak rate of July last year, when Drewry recorded $3,468.
Two years ago, however, rates rose much further due to the Red Sea crisis, reaching around $8,400 per container. At the start of July 2023, the situation was completely different, and shipping lines were able to charge around $1,345 per container on the same route.
In July 2022, the rate stood at around $7,435. In the summer of 2021, at the height of the Covid-19 boom, Drewry even recorded a rate of $13,628 per container. The current market is therefore not at an all-time high, but the combination of high demand, port congestion and rising rates does make the situation precarious.
Port congestion has consequences that extend beyond the quay. When ships have to wait for a berth, arrival times are pushed back. This, in turn, puts pressure on terminals, inland waterway transport, road transport, warehouses and customs processes.
A delay in Asia can later lead to peak demand in Rotterdam or Antwerp. Containers then arrive in larger clusters, making handling less predictable. This can have consequences for demurrage, detention, pre-carriage, onward carriage and customer agreements.
TOP closely monitors market developments relating to port congestion, container rates and capacity. It remains important for customers to plan shipments in good time, submit complete documentation and take into account possible changes to sailing schedules. Read more about demurrage, detention and customs.
…port congestion isn’t just caused by too many ships queuing at the quay? Staff shortages, weather conditions, peak volumes, strikes, limited storage space and delays in the hinterland can also cause bottlenecks.
Waiting times and handling issues are affecting the container supply chain in Rotterdam.
Read more →Strong demand and tight capacity are driving up rates.
Read more →Increased capacity does not always provide relief when ports become congested.
Read more →The container market remains vulnerable to disruptions, peaks and route problems.
Read more →