Singapore's logistics growth hit by twin shipping crises

Attacks in Red Sea and drought-plagued Panama Canal cause delays, raise costs

Simultaneous crises in two of the world's major shipping canals have caused delays, raised costs and disrupted supply chains - and the effects were seen in a slowdown in Singapore's logistics growth in December 2023.

The Singapore Logistics Growth Index (LGI) dipped by 0.9 point to 52.4 points that month, from 53.3 points the month before. The related transport capacity index fell to 51.9 in December, from 53.6 in November. Published by the Logistics Institute of Singapore, the index is based on data compiled from surveys of logistics professionals managements in more than 1,000 companies. 

The institute's report on Jan 15 attributed the drop to slower expansion rates in the indexes of transportation and warehousing, a slower contraction in the employment index, and a faster expansion in the indexes for business volume and inventory.

Mr Stephen Poh, director-general of the Logistics Institute of Singapore, said: "The latest LGI readings indicate rising logistics costs of the global economy. The Red Sea shipping crisis has caused sharp increases in shipping costs and delivery delays."