Southeast Asian cargo explosion continues! Singapore transit port under pressure

The dividends of RCEP continue to be released, and the trade heat between China and ASEAN remains high. Coupled with the opening of pre stocking for overseas year-end promotions, the Southeast Asian shipping market has officially entered the traditional peak season for shipments. The Port of Singapore, which was originally the most important transit hub in the Asia Pacific region, has recently experienced increasing transit pressure, with storage yards becoming saturated and feeder ships frequently departing late, posing real challenges to the delivery of goods for domestic and foreign trade and logistics enterprises. Many shippers only look at the ocean freight quote and ignore the potential risks of transit ports. After the goods arrive in Singapore, they cannot connect to the second leg branch line, only to realize that the delivery time is out of control and additional fees are coming one after another.

As the heart of Asian maritime transportation, Singapore Port undertakes a large amount of transshipment cargo in Southeast Asia, as well as goods from multiple countries such as Vietnam, Thailand, Indonesia, and the Philippines. It highly relies on this port to complete the connection between main and branch lines. Since August, there has been a concentrated outbreak of regional cargo volume, coupled with the influx of incremental containers caused by the diversion of some long-distance shipping routes. The utilization rate of port yards continues to rise, and berth and quay resources are tight. The direct manifestation is that the waiting time for ships to dock is prolonged, the storage cycle of containers at transit ports is longer, and the delayed departure of branch ships has become the norm. The shipping schedule for some transit goods has been postponed by 57 days.

This kind of congestion is not an isolated phenomenon, but will form a domino effect that spreads throughout the entire supply chain. The first leg of the large ship arrived in Singapore on time, but the containers could not be quickly unloaded, sorted, and connected to the second leg of the feeder ship; Once you miss the scheduled branch flight, you will need to wait for the next one and the goods will be stranded at the transit port. For shippers, this is not just a matter of receiving goods a few days late, but can also lead to a series of chain problems: delayed delivery at the destination port, facing customer deductions and order default risks; Long term occupation of port storage space by containers, resulting in storage fees and demurrage fees; Some of the goods were temporarily unloaded by the shipping company, further extending the overall delivery cycle.

At the same time, the operational fluctuations of surrounding destination ports have in turn increased the pressure on Singapore's transit. Occasional disturbances occur at the Ho Chi Minh Port and Linchaban Port terminals, limiting their container receiving capacity. The unloading efficiency of feeder ships decreases after they arrive at the port, and the turnover of feeder ships slows down, which in turn affects the pace of receiving goods from Singapore. Many foreign trade enterprises have reported that for the same route, it takes about 7 days to complete the transfer during the off-season, but now the overall cycle has been extended to 12-15 days, resulting in a significant deviation between the actual delivery time and the contract agreement.

At the market level, tight cabin space also brings about fluctuations in freight rates. The spot freight rates of Southeast Asian routes continue to rise, and there is a clear phenomenon of cabin booking competition. Many shippers only compare the shipping cost when comparing prices, ignoring the route structure: some low-priced options actually require transit through Singapore, and during peak seasons, the uncertainty of transit can consume the cost savings of freight rates and even cause greater losses. Especially for live goods and dangerous goods, the more transit links there are, the more risk points for document verification and port operations. Once stranded at the transit port, the difficulty and cost of handling will be higher than for general cargo.

Faced with the uncertainty brought by Singapore's transit, foreign trade and logistics practitioners can effectively manage risks from several dimensions.

Firstly, prioritize the evaluation of direct routes and reduce reliance on transit. If the value of the goods is high and the delivery time is rigid, try to choose domestic direct shipping schedules to destinations such as Ho Chi Minh City, Linchaban, Manila, etc., skip the Singapore transit link, and fundamentally avoid the risk of second leg ship connection failure. Although freight rates may be slightly higher, the value of time stability in peak season environments is much higher than simply the difference in freight rates.

Secondly, if it is necessary to transit through Singapore, sufficient time must be reserved for buffering. Do not schedule the shipment based on the customer's final delivery date. It is recommended to reserve an additional 7-10 days of flexible time in the overall plan. At the same time, during the booking stage, it is necessary to confirm with the logistics company the names and schedules of the first and second leg ships, the schedule density of the second leg branch line, and the emergency response plan in case of delay. Do not arrange production and shipment based solely on the information of the first leg ship.

Thirdly, closely monitor the pace of material replenishment and cut-off, and try to complete the submission of materials as early as possible. The cut-off time of shipping companies during peak season is often unexpectedly advanced, and the delay in SI replenishment will directly affect the allocation of transit port space. The information is complete and accurate, reducing the need for document changes and avoiding additional detention risks in already congested transit ports due to document issues. For the export of dangerous goods, it is even more important to verify the complete set of maritime declaration materials in advance to ensure that the documents in the transit process match.

Fourth, establish alternative plans and do not bet all cargo volume on a single route. Different shipping companies and transit hub schemes can be compared synchronously, and some cargo volumes can be diverted to other transit channels. After shipment, keep track of the ship's dynamics. Once there are signs of delays in transit ports, synchronize with overseas buyers as soon as possible, manage expectations well, and avoid customers filing claims due to delayed receipt.

The demand in the Southeast Asian market will continue to rise in the second half of the year, and it is difficult to completely alleviate the transit pressure at Singapore Port in the short term. For overseas enterprises, sea freight competition is no longer just about competing for low prices. Supply chain resilience and risk prediction ability are becoming the key to order fulfillment. During peak season shipments, visible shipping costs are crucial, while invisible transit risks are worth paying close attention to for every shipper and freight forwarder.

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