Impact of COVID-19-related Port Closures on Global Maritime Industry Outlook

Mr Saktiandi Supaat asked the Minister for Transport in light of the COVID-19 situation leading to port closures in China (a) what is the Ministry’s assessment of the global maritime outlook and risk scenarios; and (b) how will overseas port closures affect Singapore’s port operations, logistics sector and supply chain resilience.

Mr S Iswaran: The global maritime industry has remained resilient during the COVID-19 pandemic which has allowed for cross border flow of goods to continue. However, the outlook remains fluid in the short to medium term as the pandemic situation worldwide is still evolving. Containment measures for COVID-19 by overseas ports to bring the COVID-19 situation under control contributed to port closures and congestion, causing further vessel delays and exacerbated the situation in many ports which are already facing tight capacity constraints.

As the world’s largest transhipment hub port, Singapore is affected by these global disruptions. Congestion in upstream ports resulted in vessels arriving off-schedule in Singapore. This has led to bunching and more peaks and troughs in port operations. In addition, due to changes in the connections for transhipment cargo, PSA and the shippers need to re-plan and execute additional container movements.

The terminal closures in the Port of Shenzhen in late May to mid-June and the Port of Ningbo-Zhoushan in August this year had compounded the problems of delays and capacity for sea freight. Fortunately, the closures were time-limited and both terminals have since reopened. These two ports collectively accounted for approximately 8% of Singapore’s imports from China. Their closures did not have a significant direct impact on Singapore as our supply chains are sufficiently diversified.

PSA has taken firm action to minimise the impact on Singapore’s port operations and logistics. For example, with support from the Maritime and Port Authority of Singapore (MPA) and the unions, PSA opened more berths and yards for operations and deployed more port workers to handle surges in container volumes. PSA worked with shipping lines who had to skip ports to enable them to catch up on their operations in Singapore to make up for lost time.

As our port is highly digitalised, stakeholders in the logistics sector and supply chain ecosystem receive real-time information about vessel arrivals and departures from PSA terminals through a system called Portnet, allowing them to quickly respond to schedule changes. PSA has also been supporting shippers and cargo owners to track their cargo closely through digital platforms and expedite connections for urgent cargo.

Through these efforts, Singapore has not been too badly affected by the disruptions. Customers have benefited from our connectivity and reliability, which further strengthens our position as a hub port. Singapore’s container throughput grew by 4.8% from January to July 2021, compared to the same period in 2020; and by 2.8% compared to 2019 before COVID-19 began.