Port congestion is becoming an increasingly serious threat to global trade, with bottlenecks in several regions disrupting shipping schedules and adding pressure to already stretched supply chains, Drewry highlighted.
Maersk has recently pointed to what it describes as 15 years of underinvestment in port infrastructure, while Drewry’s latest analysis offers a closer look at the growing risks and what the industry could face ahead. Drewry’s new “Market Signals” risk summary points to a clear deterioration in two key indicators: average waiting times at ports are increasing, while containership schedule reliability is declining.
The impact is being felt across the shipping industry, with both carriers and cargo owners exposed to the risk of longer port stays and mounting delays. In week 32, in early August, typhoons in China pushed average vessel waiting times for a berth to 3.6 days, according to Drewry’s Ports and Terminals Insight.
The latest figures underline how quickly weather disruptions, infrastructure constraints and limited port capacity can translate into wider delays across global supply chains.
As explained by Eleanor Hadland, Senior Associate, Ports and Terminals and Philip Damas, Managing Director, Head of Supply Chain Advisors, it is not just a short-term weather-related issue. The global average for ship waiting times has nearly doubled between the first 7 months of 2019 and the first 7 months of this year.
Both ship waiting times and total port call durations have increased since 2019, but a larger share of a vessel’s time in port is being spent waiting for a berth rather than being handled at the terminal, pointing to congestion pressures before arrival alongside. Waiting for a berth contributed to the 31% jump in average time spent by a containership in a port between 2019 and this year, with significant variations by region
So, containerships are demonstrably less productive in ports and spend more time waiting for a berth than they were before the Covid pandemic.
In a company’s financial presentation on 13 August, Vincent Clerc, CEO of A.P. Moller-Maersk, said that container port capacity is insufficient and causing congestion in several regions, including Europe, the East Coast of South America, West Africa and the Middle East, in a context of strong container export growth from Asia. “This growth and increasing trade imbalances comes on the heels of about 15 years since the financial crisis, where investment into terminal capacity has lagged,” he said.
But Drewry’s view is that the higher risk of port congestion is linked to several industry trends and constraints, some of which are outside the control of port operators. Here are some of the key factors:
A terminal running at 90% berth utilisation takes roughly one week to recover from a one-day disruption. A terminal running at 75% utilisation can recover in two days. The difference between those two operating points, in normal years, could be the difference between a competitive and an uncompetitive return on capital, Drewry port consultants said in the latest Ports and Terminals Insight.
Drewry would also argue that ocean carriers follow the same primary objective as terminal operators: focus on costs and on returns, not on supply chain resilience. Carrier strategies to maximise returns such as blank sailings, ad hoc sailings and extra loaders can result in high peaking factors at major ports, which is a major contributor to yard congestion or waiting time at ports.
Furthermore, Drewry’s analysis of port capacity, port throughputs and port utilisation from our global databases show that, based on 9 major container ports, terminal operators on average expanded capacity by 21% between 2019 and 2026, below the growth of 28% in volumes during the same period.
Singapore expanded its port capacity slightly faster than volume, whereas Shanghai, Santos, Jawaharlal Nehru Port and Qingdao did not.
The Santos situation of port congestion can be attributed to delays in the Santos “STS10” concession, landside transport constraints and very strong demand growth. In China and in Europe, the largely private-sector terminal operators have increased the utilisation of their capacity and increased capacity more slowly than volume.
In the port of Rotterdam, capacity was kept static, as one of the smaller container terminals was closed down in 2020 when volumes declined and competition from larger terminals increased. This is normal, private-sector investment behaviour.
As stated, Drewry does not see a single, global trend towards “under-investment” in port capacity but a stronger focus on asset utilisation, which increases the risk of port congestion.
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