Congestion in Singapore, the world’s second-busiest container port, has reached a critical level, compounding the shortage of ships and containers. Data from Inertia indicates that containerships have to wait up to seven days to berth in Singapore, recently seeing up to 450,000 TEU of vessels in the queue. This bottleneck at Singapore is primarily due to the diversions caused by the Red Sea crisis and shipping lines skipping the less busy Port Klang in Malaysia. Normally ships berth upon arrival or within half a day when arriving at Singapore. This discrepancy will likely cause chaos to the supply chains of the BCOs, and their downstream partners, tied up in this congestion.

Linerlytica’s report today states: “The severe congestion has forced some carriers to omit their planned Singapore port calls, which will exacerbate the problem at downstream ports that will have to handle additional volumes. The delays have also resulted in vessel bunching, which is causing spillover congestion and schedule disruptions at downstream ports.”

Asian ports are the most congested, with ports in South-east Asia accounting for 26% of global bottlenecks, while north-eastern Asian ports make up 23%. As congestion in Singapore has a considerable impact on the reliability of Asia-Europe services, trading of China’s container futures closed at a higher price of $4,209/TEU for the EC2406 contract, which expires on 24 June. The price is 6% higher than on 20 May and a 25% premium on the Shanghai Containerized Freight Index.

Not only in Singapore and Asia but globally port congestion is worsening and has tied up 2 million TEU of ships, nearly 7% of the fleet. Giving credence to the rate hikes seen across the industry. This also shows the disruption and chaos to supply chains isn’t isolated and confined to one region but instead a global problem. Limiting the available options BCOs have to realign their supply chains. And it is unlikely that congestion in Asia or globally will be rectified quickly, with The Consultancy expecting port congestion to worsen into June. This has forced operators to secure containers and vessels well beyond their normal time horizons, with some booking out to beyond September.

This critical situation underscores the need for visibility supply chain software, providing real-time data insights to assist BCOs and LSPs in making business-critical decisions to counteract the impacts on their respective supply chains.

 For BCOs, real-time data insights can help manage and mitigate the impacts of delays by providing comprehensive tracking of shipments across multiple transportation modes. This capability allows BCOs to anticipate bottlenecks, reroute cargo proactively, and maintain optimal inventory levels, thus avoiding stockouts and ensuring timely delivery to customers. Enhanced visibility also facilitates better collaboration with suppliers and other stakeholders, enabling quicker adjustments to production schedules and more informed decision-making to counteract disruptions.

LSPs similarly benefit from improved visibility by gaining the ability to monitor shipments in real time, allowing them to provide more accurate delivery estimates and improve customer satisfaction. With detailed insights into port conditions and transit times, LSPs can optimize route planning and resource allocation, ensuring efficient use of assets and minimizing delays. Furthermore, the integration of advanced analytics and predictive tools in visibility software enables LSPs to identify potential risks early and implement contingency plans, such as securing alternative transportation modes or adjusting schedules to maintain service levels despite disruptions.  

By leveraging these capabilities, both BCOs and LSPs can enhance their resilience against the pervasive challenges posed by global port congestion. Additionally, real-time tracking ensures transparency across the supply chain, enhancing coordination and communication among all parties involved, ultimately leading to improved efficiency and reduced operational costs.

The current challenges facing container ports around the western Mediterranean highlight the crucial role of supply chain visibility software in assisting Beneficial Cargo Owners (BCOs) and Logistic Service Providers (LSPs) to navigate disruptions effectively. Port executives report nearing full capacity, leading to overflowing storage yards and vessel berthing delays, primarily due to increased traffic following Houthi attacks on ships in the Red Sea.

With many analysts concluding that these delays will force companies to hold extra stock, thus increasing inventory costs. Additionally, there’s a risk to the supply of components for manufacturers, exacerbating the challenges faced by retailers and manufacturers in maintaining efficient supply chains.

Supply chain visibility software would provide real-time data insights to BCOs and LSPs, enabling them to monitor port congestion, vessel schedules, and rerouting options. With access to such information, stakeholders can proactively adjust their logistics strategies, optimize routing decisions, and manage inventory levels to mitigate the impact of disruptions on their supply chains.

For instance, as shipping lines redirect traffic via alternative routes such as the Cape of Good Hope, visibility software would enable BCOs and LSPs to track vessel movements and anticipate potential delays. They can then explore alternative transportation modes or reroute cargo to less congested ports, thus minimizing disruptions and ensuring timely delivery of goods.

Moreover, with the surge in trans-shipment traffic at ports like Algeciras and Tangier-Med, supply chain visibility software would provide insights into terminal capacities and productivity levels. Armed with this information, stakeholders can optimize port operations, allocate resources efficiently, and mitigate the risk of congestion-related delays.

In conclusion, the current challenges facing container ports in the western Mediterranean underscore the critical need for supply chain visibility software to empower BCOs and LSPs in making informed decisions to counteract disruptions. By providing real-time data insights, visibility software enables stakeholders to proactively manage port congestion, optimize routing decisions, and maintain supply chain resilience amidst evolving market conditions.

Global ocean carriers, including MSC, CMA CGM, and Cosco, have initiated direct container shipping services from Asia to Mexico, reflecting the rising container volumes and increased Chinese investments in Mexico. 

Cosco Shipping Lines and its subsidiary OOCL introduced the Transpacific Latin Pacific 5 (TLP5) line, offering direct connections between China, South Korea, Japan, and Mexico. This move aims to enhance network coverage in emerging markets, with transit times ranging from 15 to 20 days from Qingdao, China, to Ensenada and Manzanillo, Mexico. Utilizing eight ships of 4,000 to 6,000 twenty-foot equivalent units, the TLP5 signifies a significant development in Asia-to-Mexico trade. 

CMA CGM introduces the M2X – Mexico Express Service, providing streamlined shipments from the Far East to Mexico’s West Coast. With a weekly fixed-day schedule and port rotations including Tianjin, China; Qingdao; Busan; Ensenada; Manzanillo; Lazaro Cardenas; Yokohama; Busan; and Tianjin, the M2X aims to cater to market dynamics in the region. Operating eight ships of undisclosed capacity, CMA CGM emphasizes the importance of meeting the growing demand for efficient shipping solutions. 

MSC launches a loop shuttle service connecting Asia to Mexico, augmenting coverage and frequency in response to market needs. Port rotations include Qingdao, Ningbo, Shanghai, Busan, Manzanillo, Lazaro Cardenas, and Qingdao, showcasing MSC’s commitment to providing reliable shipping services. 

The surge in import container bookings from China to Mexico, coupled with an 11% year-over-year increase in Chinese direct investments in Mexico to $135 billion in 2023, underscores the growing importance of Asia-to-Mexico shipping routes. As global manufacturing shifts away from China to locations such as Mexico, the need for greater visibility in supply chains becomes even more critical. By harnessing such technology, BCOs and LSPs can make informed decisions to counteract the impacts on their supply chains. Visibility software enables them to optimize routes, anticipate disruptions, and adapt to dynamic market conditions effectively. 

In conclusion, as manufacturing diversifies to regions like Mexico, it highlights the evolving dynamics of global trade. With the introduction on shipping routes from Asia to Mexico, the complexity of supply chains is bound to increase to new hights. Necessitating the need for  advanced tools for monitoring and managing logistics operations. Visibility software offers a holistic view of the supply chain, allowing BCOs and LSPs to identify inefficiencies, mitigate risks, and enhance overall performance, ensuring seamless operations and maintaining competitive advantage.