Hapag-Lloyd, as a German shipping company, has suspended cargo shipments to the ports of Manila, Batangas, and Subic Bay since September 29, 2023, due to severe traffic and a shortage of storage capacity for empty containers. This decision was made due to serious obstacles in the return of containers.
Current Challenges in the Supply Chain
Hapag-Lloyd is the only major shipping company to announce such a wide suspension. Other shipping companies continue their services to the Philippines, although CMA CGM has also announced a two-week empty trip due to changes in its fleet. These issues relate to an unsustainable trade imbalance in the Philippines, where the number of loaded containers is significantly higher than the number of unloaded containers.
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Impact on Drivers and Cargo Services
The General Manager of the Philippine Ports Authority, Jay Santiago, has urged foreign shipping lines to create more empty container storage to quickly resolve this logistical issue. Reports indicate that truck drivers are facing unusual delays in returning containers. Mary Zapata, president of the Confederation of Philippine Truckers Associations, stated that some operators have waited up to 40 days for the return of empty containers.
These delays cause trucks and chassis to become immobilized, preventing operators from collecting new imports and increasing costs in the supply chain. These issues led to industrial strikes earlier this month, and the Philippine Bureau of Customs acknowledged the severe pressure on truck drivers, customs brokers, importers, and exporters.
Hapag-Lloyd's recent operational update indicates that these problems extend beyond traffic at the ports. The company reported that the waiting time for ships in Manila to get their turn is between two to four days, and the waiting time for ships that have missed their port window is four to seven days. However, the waiting time at Subic Port has been reported to be less than 12 hours.
Philippine investment analysts at AB Capital have warned that the greater risk is that other shipping lines may follow Hapag-Lloyd's lead, which could turn a ground container bottleneck into a broader disruption in the country's international trade.
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