Europe's shipping bottlenecks expected to persist into July
Port congestion is worsening at key gateways in northern Europe and other hubs, according to a new report that suggests trade wars could spread maritime disruptions to Asia and the U.S. and push up shipping rates.
Waiting times for berth space jumped 77% in Bremerhaven, Germany, between late March and mid-May, according to the report on Friday from Drewry, a maritime consultancy in London. The delays rose 37% in Antwerp and 49% in Hamburg over the same stretch, with Rotterdam and the U.K.'s Felixstowe also showing longer waits.
Labor shortages and low water levels on the Rhine River are the main culprits, hindering barge traffic to and from inland locations. Compounding the constraints is U.S. President Donald Trump's temporary rollback on 145% tariffs on Chinese imports, which has pulled forward shipping demand between the world's largest economies.
"Port delays are stretching transit times, disrupting inventory planning and pushing shippers to carry extra stock,' Drewry said. "Adding to the pressure, the transpacific eastbound trade is showing signs of an early peak season, fueled by a 90-day pause in U.S.-China tariffs, set to expire on Aug. 14.'
Similar patterns are emerging in Shenzhen, China, as well as Los Angeles and New York, "where the number of container ships awaiting berth has been increasing since' late-April, it said.
Rolf Habben Jansen, CEO of Hamburg-based Hapag-Lloyd, said on a webinar last week that, although he's seen recent signs of improvement at European ports, he expects it will take "another six to eight weeks before we have that under control.'
Still, Torsten Slok, Apollo Management's chief economist, pointed out in a note on Sunday that the U.S.-China tariff truce reached almost two weeks ago hasn't yet unleashed a surge in ships across the Pacific.
"This raises the question: Are 30% tariffs on China still too high? Or are U.S. companies simply waiting to see if tariffs will drop further before ramping up shipments?' Slok wrote.
EU-U.S. dispute
U.S. tariffs — combined with sudden threats and truces — make it difficult for importers and exporters to calibrate their orders, causing unseasonal swings in demand. For shipping lines, those translate into delays and higher costs requiring freight rate hikes.
The latest blow to visibility came Friday, when Trump threatened to hit the European Union with a 50% tariff on June 1, a move that could roil transatlantic trade.
"The additional policy uncertainty will be a deadweight cost to global activity by adding risks to decisions on expenditures,' Oxford Economics said in a research note on Saturday. Germany, Ireland, Italy, Belgium and the Netherlands are the most vulnerable given their ratios of U.S. exports to GDP, it said.
Bloomberg Economics said in a research note Friday that "additional tariffs of 50% would likely reduce EU exports to the U.S. for all products facing reciprocal duties to near zero — cutting total EU exports to the U.S. by more than half.'
Mounting uncertainty about whether Trump would follow through on such a big trade threat or postpone it like he did with China is adding to shipping pressures.
Carriers including MSC Mediterranean Shipping, the world's largest container line, had already announced general rate increases and peak season surcharges, starting in June, for cargo from Asia.
In the weeks ahead, those are likely to boost spot rates for seaborne freight, the cost of which is still underpinned by geopolitical turmoil.
Cargo ships are still largely avoiding the Red Sea, where Yemen-based Houthis started attacking vessels in late 2023, and sailing around southern Africa to ferry goods on routes that connect Asia, Europe and the U.S..
Avoiding 'massive congestion'
On the webinar, Habben Jansen said it is still not safe to traverse the Red Sea and indicated that any eventual restoration of regular journeys through the Suez Canal would have to be gradual, perhaps taking several months, to avoid flooding ports with vessel traffic.
"If we would from one day to another shift those ships back through Suez, we would create massive congestion in many of the ports,' Habben Jansen said. "So our approach would be that if we can do it, that we do it over a longer period of time so that the ports do not collapse, because that's in nobody's interest.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kyodo News
12 hours ago
- Kyodo News
U.S. asked Japan to raise defense spending to 3.5% of GDP
KYODO NEWS - 8 minutes ago - 20:15 | All, Japan, World U.S. President Donald Trump's administration has asked Japan to raise its defense spending to 3.5 percent of gross domestic product, a request that will likely prompt Tokyo to call off a planned high-level meeting with Washington, a Japan-U.S. diplomatic source said Saturday. The request was made recently by Elbridge Colby, U.S. undersecretary of defense for policy, the Financial Times has reported, citing people familiar with the matter. Colby, a seasoned strategist, had previously pressed Japan to increase its defense spending to 3 percent of its GDP. The increased demand will likely lead Japan to cancel a planned meeting of the countries' foreign and defense chiefs, which was scheduled in Washington before Japan's House of Councillors election, expected on July 20. The meeting would have been the first since Japanese Prime Minister Shigeru Ishiba and Trump took office in October and January, respectively. Kyodo News reported in late May that Japan and the United States were considering holding the so-called two-plus-two security talks in Washington this summer. Japan and the United States had not formally said such talks, as held in July last year in Tokyo, would take place. In 2022, after Trump's first term, Japan decided to double its annual defense budget to 2 percent of GDP by 2027, a dramatic move in postwar security policy under the country's war-renouncing Constitution. But Trump continues to complain that the U.S.-Japan security treaty is one-sided, with his administration apparently planning to ask Tokyo to pay more for American troops based in the Japanese archipelago once bilateral negotiations over his tariffs proceed.
19 hours ago
U.S. Demands Japan Raise Defense Spending to 3.5 Pct of GDP: FT
Washington, June 20 (Jiji Press)--The administration of U.S. President Donald Trump has urged Japan to increase its defense spending to 3.5 pct of its gross domestic product, higher than the U.S. side's earlier demand for 3 pct, the Financial Times reported Friday. The latest request has caused a backlash from the Japanese side, resulting in the postponement of a so-called two-plus-two security meeting between the two nations' foreign and defense ministers, which had been arranged for July 1, according to the report. Elbridge Colby, U.S. undersecretary of defense for policy, pushed for the higher spending hike, "sparking anger in Washington's closest Asian ally," the British newspaper said. The upcoming election for Japan's House of Councillors, expected to be held on July 20, also influenced the decision to push back the two-plus-two meeting, as the Japanese side showed concern about the possible impact of the meeting on the election's outcome, the report said. In a similar move, the U.S. government asked Australia to increase its defense spending to 3.5 pct of GDP, provoking a backlash from Australian Prime Minister Anthony Albanese. [Copyright The Jiji Press, Ltd.]
The Mainichi
a day ago
- The Mainichi
US reportedly asked Japan to raise defense spending to 3.5% of GDP
WASHINGTON (Kyodo) -- U.S. President Donald Trump's administration has asked Japan to raise its defense spending to 3.5 percent of gross domestic product, a request that angered Tokyo and led it to put off a planned high-level meeting with Washington, the Financial Times reported Friday. The request was made recently by Elbridge Colby, U.S. undersecretary of defense for policy, the newspaper said, citing three people familiar with the matter, including two officials in Tokyo. Colby, a seasoned strategist, had previously pressed Japan to increase its defense spending to 3 percent of its GDP. The higher demand prompted Japan to cancel a meeting involving foreign and defense chiefs from the two countries, which the paper said was due to take place in Washington on July 1. The meeting would have been the first since Japanese Prime Minister Shigeru Ishiba and Trump took office in October and January, respectively. Kyodo News reported in late May that Japan and the United States were considering holding the so-called two-plus-two security talks in Washington this summer. Japan and the United States had not formally said such talks, as held in July last year in Tokyo, would take place. Citing one of the officials, the newspaper said the decision to cancel the July 1 talks was also influenced by the timing of Japan's upper house election, set for July 20. In 2022, after Trump's first term, Japan decided to double its annual defense budget to 2 percent of GDP by 2027, a dramatic move in postwar security policy under the country's war-renouncing Constitution. But Trump continues to complain that the U.S.-Japan security treaty is one-sided, with his administration apparently planning to ask Tokyo to pay more for American troops based in the Japanese archipelago once bilateral negotiations over his tariffs proceed.
