Red Sea diversions create Western Mediterranean port congestion

The mass diversion of container ships away from the Red Sea since December has raised fears of congestion across west Mediterranean container ports, as carriers from Asia drop boxes destined for the eastern Mediterranean.

Instead of entering the Mediterranean Sea dead end, created by the effective closure of the Suez Canal, Ultra-large container ships from the Far East are offloading containers at western Mediterranean ports such as Barcelona, with smaller feeder vessels transporting them to final central and eastern Mediterranean destinations.

Transhipment traffic in Barcelona was up year on year by 22%, 64% and 63% in January, February and March, while Algeciras, Valencia and Las Palmas grew at 7%, 18% and 33% in Q1 2024.

And while the ports managed the first quarter’s throughput, they are operating at (or are close to) operational capacity, which means that any continuation or increase in volumes could lead to a dangerously high level of utilisation and potentially serious congestion.

Alternatives, to spread volumes out, include the Moroccan hub of Tanger Med, but its utilisation is already sitting at 83%, so even a relatively small increase in volumes could fill it up.

The southern Portuguese port of Sines has capacity to handle an additional 1.4m teu, while the ports of Malaga and Castellon may also be worthy of consideration, to avoid a potential supply chain bottleneck, with storage yard capacity drying up at ports in the western Mediterranean.

The seven-day average vessel waiting time at Barcelona increased two days due to increased cargo flow, lowered productivity, IT issues and bad weather. Shipping lines are asking customers to pick up both their import units and empty containers as early as possible, due to congested line-up and increased waiting times.

One of the two container terminals at Algeciras confirmed that their facility was “quite full” and warned that “capacity is very limited”, leading them to restrict the amount of cargo accepted, to avoid severe congestion.

There are two potentially significant negative outcomes due to the current Mediterranean situation:

First, transshipment networks require more ships for the feeder services and carriers may remove ships from other trades, particularly those in North Europe, which could create a capacity squeeze and push rates up.

Second, port congestion creates a de-facto reduction of available vessel capacity, which leads to an increase in blank sailings, because there is a schedule gap when vessels are unavailable, which squeezes capacity and pushes up rates.

If you have any questions or concerns about the issues outlined in this article, or would like to discuss any aspect of your Mediterranean supply chain, please EMAIL our Chief Commercial Officer, Andy Smith.