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Business Times
17-06-2025
- Business
- Business Times
Global shipping not disrupted by Israel-Iran conflict for now, but impact likely nuanced
[SINGAPORE] The Israel-Iran conflict has not disrupted global shipping – for now – but the likely impact on the industry might be more nuanced. Pacific International Lines (PIL), which focuses on China, Africa, the Middle East, Latin America, Oceania and the Pacific Islands, said that its sailings are continuing notwithstanding the escalated tensions in the Middle East. Abhishek Chawla, PIL's chief marine officer, told The Business Times: 'At present, we continue our sailings with utmost consideration to the evolving situation while ensuring the usual safety and security of our vessels and crews. We exercise constant risk management assessment and strategic anticipation.' Maersk has also not had disruptions caused by the Israel-Iran war and is continuing its scheduled operations in the area. 'Our aim is to keep our customers informed and help them with alternative solutions if needed,' the Danish shipping heavyweight said. Israel launched an attack on Iran on Friday (Jun 13), triggering barrages of ballistic missiles from Iran in retaliation. The Joint Maritime Information Center (JMIC), an international naval task force monitoring the Iran-linked Yemeni Houthi rebels' attacks on merchant vessels, has assessed that the maritime threat level remains significant and elevated in its latest update on Monday. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up It flagged the possibility of the military operations spilling beyond the bilateral hostilities into the wider region. The Strait of Hormuz – located between Oman and Iran, and connects the Persian Gulf with the Gulf of Oman and the Arabian Sea – remains open and commercial traffic continues to flow, according to JMIC. However, it noted a slight drop in the number of cargo-carrying vessels of at least 1,000 gross-tonnage transiting the Strait of Hormuz since Israel's attacks on Iran. The strait is the world's most important oil choke point, through which nearly 20 million barrels – or about one-fifth of global consumption – flow each day. A blockade of the highly strategic Strait of Hormuz could send prices of the commodity soaring past US$100 a barrel. As much as 3.4 per cent of global container volumes could also be hit if the strait closes, estimated Tan Hua Joo, container industry analyst at data provider Linerlytica. 'The United Arab Emirates will be the worst hit in such an event as the 21.7 million twenty-foot equivalent units (TEUs; a unit of measurement used to determine cargo capacity for container ships) that its ports handle account for the majority of the 33.2 million TEUs of total container volumes in the region.' The impact of the conflict on shipping charges could be more nuanced. Chawla of PIL commented that freight costs could rise as a result of the increase in the bunker prices sparked by the tensions. Global crude oil prices surged 7 per cent on the day that strikes between Iran and Israel took place. Lars Jensen, the chief executive officer of Vespucci Maritime, told BT that insurance companies might be re-assessing risk and charging war-risk premiums. 'Also, shippers to and from the region might be re-assessing the risk and potentially altering their shipments if this is possible.' HSBC Global Research commented that the escalating Middle East tensions mean that a return to the Red Sea any time soon is less likely, but this may not ease the concerns on capacity ramp-up and the softer spot container rates in the transpacific lane.
Business Times
27-05-2025
- Business
- Business Times
Asian ports reported to be congested; average waiting time in Singapore is up to 1.5 days
[SINGAPORE] Port congestion has been reported at Asian ports, with Singapore being one of those affected: The waiting time for a berth at the world's top transhipment hub is said to be between 12 and 36 hours. Tan Hua Joo, a box shipping analyst at data provider Linerlytica, told The Business Times that the longer waiting times in Singapore in recent weeks stem from changes in vessel deployments following the United States' imposition of tariffs and delays at upstream ports. He added, however, that congestion in Asia ports is an ongoing issue, not a recent one. Liner Hapag-Lloyd told its customers that, as at May 26, some Asian ports were facing increased waiting times because of congested berths. The Chinese ports of Shanghai and Qingdao are among the worst hit, with the average hold-up ranging from 24 to 72 hours. The average waiting time at China's Ningbo port is between 24 and 36 hours; over at South Korea's Busan and Japan's Yokohama ports, waiting times are 18 hours and between 12 and 24 hours, respectively. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The longer waiting times at Singapore are being caused by vessel bunching and congestion, the liner said. Kuehne+Nagel has similarly described operations in the ports of Singapore and Klang as 'heavily disrupted'. Vessels calling at the Republic's port have had an average waiting time of around 1.82 days over the last seven days, said the freight forwarder in its weekly update. Several vessels are arriving at once, and transshipment cargo is being delayed by a week or two, it said. At Port Klang, congestion in the berths has raised the average vessel waiting time to around 1.46 days, Kuehne+Nagel reported. 'Some vessels can wait up to 2.5 days. Yard congestion is around 90 per cent, reducing productivity.' Data service EconDB numbers point to dwell times for transhipments at the Singapore port averaging 9.5 days as at May 19, against the peak of 10.8 days in late May 2024 and the average of 7.6 days since March 2022. PSA Singapore acknowledged on Tuesday (May 27) that a high concentration of container vessels have arrived in recent weeks. It attributed this to service reconfigurations by shipping lines in response to business changes and global issues. Delays and congestion at other locations have also caused vessels to bunch up in Singapore, a spokesperson for PSA Singapore said. The port authority said it would ensure the optimal turnaround of container vessels to ease the situation with added capacity and resources. Last year, port congestion prompted some liners to skip Singapore after berthing delays at the South-east Asian transhipment hub hit a historic high; this was caused by some operators discharging more containers in the Republic and scrapping subsequent voyages in order to catch up on their next schedules amid forced detours in the Red Sea. Port congestion in Singapore peaked in the second quarter of 2024, Linerlyica's Tan noted. The situation has since eased, but not been fully resolved. The congestion is not expected to hit the critical levels of 2024 because additional capacity has since been added at the Singapore port, he added. Earlier, analysts had cautioned that port congestion in Europe might have a spillover impact on Asian ports. Meanwhile, cargo from places other than mainland China that were given a 90-day reprieve from reciprocal tariffs by the United States have been rushed out of ports since the pause was announced on Apr 9. Mainland China got its truce with the US on May 12, unleashing a wave of shipments, including those had been held back from April to mid-May. Total capacity on the trans-Pacific route – primarily from Asia to the US – is set to rebound sharply in the coming four weeks, with an average of over 560,000 twenty-foot-equivalent units (TEUs, a measure of freight capacity) departing from Asia to the US weekly. This is about 50 per cent more than in the previous fortnight. The higher supply is expected to rein in the rise in freight rates for the trans-Pacific trade lanes, after the US-China trade detente arrested the decline in the shipping costs.
