Last week, we discussed the significant impact of U.S. President Joe Biden’s steep tariff increases on Chinese imports, particularly how these measures have disrupted supply chains in Singapore.
New data reported by The Straits Times highlights these disruptions. Container xChange, an online container trading platform, reported that average container prices in Singapore have surged by 26% from October 2023 to May 2024. The cost of a 20 ft container has increased from US$950 in October 2023 to US$1211 in May 2024.
The primary cause of these higher container prices is a shortage of containers. This shortage is not only driven by intensified demand from China but also by another significant event from October of last year.
Houthi Militants Attacks Vessels in Red Sea
Since October 2023, Houthi militants have launched repeated drone and missile attacks on vessels transiting the Red Sea, demanding an end to the invasion of the Gaza Strip. The ongoing attacks has resulted in significant instability in the supply chain.
In order to avoid the Suez Canal which is near the Red Sea, many container ships have opted for the longer route around Africa’s Cape of Good Hope. This has therefore caused further disruptions in global shipping schedules.
Uncertain Supply Chain Outlook
Amid these disruptions, Drewry Shipping Consultants reports that many vessels now operate on a “sail-first-then-wait” basis, arriving at ports even when berths are unavailable. This issue is particularly evident in Singapore, where unscheduled vessel arrivals contribute to congestion.
The outlook for 2024 remains uncertain, with global shipping schedules in disarray and a shortage of container handling capacity. This unpredictability leads to longer transit times and increased congestion at major ports like Singapore.
Environmental Impact
The environmental impact of these disruptions is also concerning. Increased congestion means longer waiting times and higher fuel consumption, resulting in greater carbon dioxide emissions. This poses a significant challenge for global environmental efforts in the coming year.
Impact on the Tile Manufacturing Industry
Supply chain disruptions have also affected the tile manufacturing industry. At Heritage Ceramics, we are closely monitoring shipping schedules to keep our customers informed. We remain vigilant, ensuring clear communication and timely updates as we navigate these challenges.
*This article is referenced from several reputable news sources, like The Straits Times.
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