Experts Warn of Port Congestion Yet Again with a Rising Tide of Car-Carrying Ships

In a warning echoing through the maritime corridors, Lasse Kristoffersen (CEO, Wallenius Wilhelmsen) has raised concerns over an impending surge in car-carrying vessels, poised to flood the European ports with vehicles and deepen congestion woes at terminals already buckling under the strain. Just recently, a leading international daily reported the transformation of numerous European car import terminals into congested ‘car parks’ following a notable surge in vehicle exports from China.

What Kristoffersen said also underscores the gravity of the situation – the scenario could have been worse if there were sufficient capacity to ferry all the vehicles demanded by manufacturers. “We’re not able to lift all the volumes that our customers want,” he said.

While the last decade has witnessed some lows in the capacity available for shipping cars across the world, the sudden 17% surge in the output from manufacturing companies has aggravated the situation. As a result, there is a frenzy among operators as they mobilize to cater to this demand. Orders for 198 new ships have been placed, marking a substantial 42% increase in capacity, and are expected to be fulfilled by the end of 2027.

What Kristoffersen foresees is a mismatch between the gradual increase in shipping capacity and the inadequate expansion of port facilities. He anticipates a further deterioration in congestion at ports, cautioning that terminals and distribution networks are poised to become the next bottleneck in the supply chain.

Amid this backdrop, industry behemoth MSC recently made a significant foray into the car carrier sector with a notable cash offer for Gram Car Carriers, signaling a strategic pivot towards capturing opportunities in this evolving landscape.

While some players are grappling with the port congestion crisis, in a genius move, some others are taking proactive steps to avoid the looming challenges. There have been strategic investments in dedicated private terminals in key regions such as China, Australia, South Korea, and the United States, among others.

Moreover, the industry’s resilience is being tested by the volatile geopolitical landscape, with disruptions in key shipping routes exacerbating the challenges. Kristoffersen highlighted the impact of diverting sailings between Asia and Europe to circumvent terror threats in the Red Sea, as well as concerns surrounding the Strait of Hormuz following recent incidents involving maritime security.

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