Singapore boosts container handling capacity as more ships call (2024)

SINGAPORE – In line with a national plan to expand Singapore’s port capacity, the first of three additional berths at a new megaport in the Republic began operating on July 1 amid congestion at the local port terminals, as more container ships waited for their turn to berth.

The two other Tuas Port berths will commence operations in October and December, Transport Minister Chee Hong Tat said in his replies to several parliamentary questions on July 2.

The new berths are part of the phased opening of the $20 billion Tuas Port, where a total of nine container berths have already opened, including the one made operational on July 1.

Earlier in 2024, port operator PSA also reactivated some of the berths and yard space at its Keppel and Tanjong Pagar city terminals, which had been closed as operations move to Tuas Port by 2027.

Its Pasir Panjang terminal will remain open to support the transition to Tuas Port, which will be able to handle 65 million twenty-foot containers when fully completed in the 2040s, making it the world’s largest automated port.

PSA has been ramping up container handling capacity to ease waiting times for incoming container vessels at the Singapore port terminals, about 90 per cent of which are arriving off-schedule, compared with an average of about 77 per cent for 2023, Mr Chee said.

This is because sailings between Asia and Europe are being diverted to a longer route around the Cape of Good Hope in South Africa to avoid the violence now taking place in the Red Sea. Many African ports are also ill-equipped to handle more frequent sailings, adding to the delays.

PSA, which runs a portfolio of 66 deep-sea and coastal terminals worldwide to support its cargo network, does not operate any terminals in Africa. As a result, vessels now have less predictable and transparent schedules, and many more ships are arriving in Singapore at the same time.

Container lines are also using Singapore as a transhipment port to unload cargo bound for other ports in the region, and rearrange containers on their vessels before sailing back to Europe.

“These have lengthened the time container vessels stay in our port for cargo operations, which in turn increased the waiting time for incoming vessels, leading to congestion at our container berths,” Mr Chee said.

Despite this, the total volume of containers passing through the local portincreased to 16.9 million containers between January and May, up 7.7 per cent from 15.7 million containers during the same period in 2023.

Mr Chee noted that “the strong growth in container throughput and the reliance on our port to turn around transhipment containers reflect the global shipping industry’s confidence in Singapore as a trusted hub port”.

He added that capacitywill continue to be scaled up in the months ahead to meet anticipated demand, and said the authorities will work to ensure there are enough workers to keep expanded operations going.

But he warned that it is unlikely that the Red Sea crisis will ease anytime soon, and added that disruptions could also be compounded by an increase in container volumes as companies bring forward export schedules out of Asia, and in preparation for major holidays in the second half of the year.

So far though, the situation has not affected a recovery in Singapore’s trade and manufacturing sectors, said Deputy Prime Minister Gan Kim Yong in written replies to parliamentary questions on July 2.

Mr Gan, who is also Minister for Trade and Industry, noted that on a year-on-year basis, total trade expanded by 14.2 per cent in May, with exports up by 12.6 per cent and imports up 16 per cent.

Singapore’s manufacturing output also increased by 2.9 per cent during the same period.

“Nevertheless, we recognise that port congestion here and in other ports around the world has led to longer shipping and transit lead times, which has in turn resulted in delays in shipments of imports and exports,” he said.

He added that the authorities are cooperating to minimise the impact to Singapore’s trade and manufacturing activities and uphold its reputation as “a reliable, efficient and trusted logistics and transportation hub”.