Port Congestion in Europe Threatens Global Trade Flows

Port congestion is worsening at key entry points in Northern Europe and other logistics hubs, according to a new report, which suggests that trade wars could disrupt maritime shipping routes to Asia and the U.S. while driving up freight rates.

Waiting times for berths increased by 77% in Bremerhaven, Germany, between late March and mid-May, according to data released on Friday (May 23) by Drewry, a London-based maritime consultancy. Delays also rose by 37% in Antwerp and 49% in Hamburg, while Rotterdam (Netherlands) and Felixstowe (U.K.) also reported longer wait times.

A shortage of labor and low water levels on the Rhine River are largely responsible for the delays, disrupting barge traffic between ports and inland destinations. Making matters worse, the temporary suspension of 145% U.S. tariffs on Chinese imports by President Donald Trump has brought forward shipping demand between the world’s two largest economies.

“Port delays are lengthening transit times, disrupting inventory planning, and forcing shippers to build up excess stock,” said Drewry. “Adding to the strain, eastbound transpacific trade is already showing signs of an early peak season, driven by a 90-day tariff truce between the U.S. and China, set to expire on August 14.”

Similar congestion patterns are emerging in Shenzhen, China, as well as in Los Angeles and New York, where the number of container ships waiting to berth has been increasing since late April.

Rolf Habben Jansen, CEO of Hapag-Lloyd, stated in a recent webinar that, although there are early signs of improvement at European ports, it may take “another six to eight weeks” to fully resolve the situation.

Still, Torsten Slok, chief economist at Apollo Management, noted in a report released on Sunday (May 25) that the U.S.–China tariff truce has yet to trigger a surge in Pacific shipping volumes.

“This raises the question: Are the 30% tariffs on China still too high? Or are U.S. companies just waiting to see if they’ll fall further before ramping up shipments?” Slok wrote.

Frequent changes in tariff policy are making it difficult for importers and exporters to plan their orders, creating off-season demand fluctuations. For shipping companies, this translates into delays and rising costs, which in turn drive up freight rates.

The latest blow to global trade predictability came on May 23, when Trump threatened to impose a 50% tariff on the European Union starting June 1. Over the weekend, however, he postponed the deadline to July 9 after a call with European Commission President Ursula von der Leyen.

With just over six weeks before potentially higher tariffs come into effect, transatlantic cargo volumes are expected to rise as “shippers are increasingly incentivized to move goods to the U.S. before tariffs hit,” said Emily Stausbøll, senior shipping analyst at Xeneta, a Norway-based freight platform.

Further policy uncertainty is expected to weigh on global activity. According to Oxford Economics, the unpredictability “will be a deadweight cost for global activity, increasing the risks tied to spending decisions.” The most vulnerable countries, based on the ratio of exports to the U.S. as a share of GDP, include Germany, Ireland, Italy, Belgium, and the Netherlands.

Bloomberg Economics warned that “a 50% tariff could virtually eliminate EU exports to the U.S. of all affected goods, potentially slashing more than half of Europe’s exports to the U.S.”

Rising uncertainty over whether Trump will follow through with such threats—or delay them again, as seen with China—is adding pressure to the global shipping industry.

Shipping giant MSC Mediterranean Shipping Co., the world’s largest container carrier, has already announced general rate increases and peak season surcharges starting in June for cargoes originating in Asia.

In the coming weeks, these measures are expected to increase further spot market freight prices, which are already under pressure from geopolitical tensions.

Meanwhile, container ships continue to avoid the Red Sea, where Houthi rebels in Yemen began targeting vessels in late 2023. Most vessels are instead rerouting around the southern tip of Africa to connect Asia, Europe, and the U.S.

In his webinar, Habben Jansen reiterated that sailing through the Red Sea is still unsafe, and any return to regular routes via the Suez Canal must be gradual—possibly over several months—to avoid port congestion from sudden traffic surges.

“If we were to reroute all those ships back through the Suez Canal overnight, we would create massive congestion at many ports,” he said. “Our approach, if feasible, is to phase the return over time so that ports aren’t overwhelmed, as that’s in no one’s interest.”

Source: Valor Econômico

Sharing is caring!