Typhoons push global port congestion to record levels, threatening freight rates

A succession of typhoons battering major Chinese ports has deepened global port congestion, with North Asia emerging as the epicenter. As more container ships pile up at anchorages, the effective supply of vessels available to carry cargo is shrinking — raising the prospect of upward freight rate pressure on routes where demand remains firm.

The Korea Ocean Business Corporation released a report Friday titled "Deepening Global Port Congestion and Its Impact on the Container Market."

According to the report, a port bottleneck that began in Northern Europe has spread through major transshipment hubs in the Middle East and Asia and into North Asia. Cargo volumes rose earlier than usual ahead of the peak season, and congestion worsened as vessel arrivals clustered and port operations were disrupted across multiple regions.

The situation was compounded by a string of typhoons that struck major Chinese ports in July and August. Ships delayed in China arrived in bunches at subsequent ports of call such as Busan and Singapore, or failed to arrive on schedule, causing disruptions at one port to ripple outward to the next.

Cargo throughput also climbed. Chinese ports handled about 182.92 million TEU in the first half of this year — one TEU equals one 20-foot container — up 5.9 percent from the same period last year. The corporation said that with cargo volumes already elevated and port disruptions compounding one another in a chain reaction, clearing the backlog of waiting vessels and unprocessed cargo could take considerable time.

The number of container ships stranded at ports has swelled to record levels. According to shipping analytics firm Linerlytica, container capacity waiting to berth at global ports reached 4.31 million TEU last month, with 51.4 percent of that concentrated in North Asia. At the Port of Shanghai alone, more than 34.8 percent of capacity was unable to berth.

When vessels waiting at anchorage zones are included, the Clarksons measure of waiting capacity reached 11.13 million TEU — an all-time high. The corporation noted that while the two firms use different counting methodologies, both point in the same direction: global port congestion has reached an exceptionally elevated level.

Vessel schedules are also suffering. According to Sea-Intelligence, the global container shipping on-time rate fell 6.2 percentage points, from 62.6 percent in June to 56.4 percent in July, while the average delay lengthened from 5.31 days to 6.06 days over the same period.

The core concern is that port congestion translates directly into a reduction in effective vessel supply. When ships sit idle at ports for extended periods, round-trip voyage times grow longer. Even as new vessels enter the market, the capacity actually available to move cargo shrinks — a dynamic that can push freight rates higher on routes where demand holds steady.

The corporation said that even if operations at major Chinese ports return to normal, the current congestion is unlikely to clear quickly. It identified the extent to which the disruption spreads to major transshipment hubs — including Busan, Singapore and Port Klang — as a key variable for the container market going forward.

"Recent port congestion has grown beyond a temporary operational setback at individual ports into a major variable affecting the effective capacity and service reliability of the global liner network," said Kim Jong-woo, head of the corporation's Marine Industry Information Center. "We will closely monitor the normalization of major Chinese ports and whether congestion spreads to subsequent ports of call, including Busan."