The Strait of Malacca, one of the world’s busiest shipping lanes, is reaching a breaking point. Stretching roughly 800 kilometers between Indonesia and the Malay Peninsula, this narrow passageway connects the Indian Ocean to the South China Sea and funnels nearly a quarter of the world’s traded goods—everything from oil and coal to palm oil and car parts.
Its importance is immense. It links major production hubs in Asia to markets in the Middle East, Europe, and beyond. But with traffic hitting new highs and port systems straining to keep up, global trade is starting to feel the pressure.
A Shortcut Under Stress
Serving as the shortest maritime route between the Indian and Pacific Oceans, the Strait of Malacca is a vital artery. In 2024, the strait recorded a new all-time high of 94,301 transiting ships—a 5.5% increase from the previous year. In 2023, the strait carried around 23.7 million barrels of oil per day, surpassing the Strait of Hormuz as the world’s largest oil transit route.
Singapore, which anchors the strait’s southern end, has seen vessel traffic surge. May alone saw nearly 1,000 ships dock at the city-state—up from just 639 in April. The result? Delays are piling up. Ships that previously waited a day or two now often linger up to a week before unloading.
According to Tan Hua Joo, shipping expert at Linerlytica, “Typically, the waiting time for getting a berth is less than a day, and in most cases, it’s berthing on arrival, but right now ships are waiting up to a week.”
These delays aren’t just a nuisance—they cost money. Between February and April 2024, container shipping rates from China jumped 88%. The ripple effects hit businesses and consumers alike. Electric vehicle (EV) makers, which rely on just-in-time delivery of parts, are especially vulnerable. One late shipment can stall an entire factory.
“As the automotive market continues to grow across Asia, it’s alarming to see so many in the industry reporting delays in critical shipping channels like the Strait of Malacca,” said Ronald Kleijwegt, CEO of Vinturas. “Delays and lost shipments shouldn’t be happening in today’s world, where technology can ensure all the cogs in a supply chain are secure and streamlined.”
Bottlenecks and Backlogs
Part of the problem lies in the strait’s geography. At its narrowest point in the Phillips Channel near Singapore, it shrinks to just 1.96 nautical miles wide. The Traffic Separation Scheme spans 250 nautical miles and includes six major chokepoints, with an average depth of just 23 meters. The southern stretch is particularly hazardous, riddled with sandbanks and islets that shift with currents.
The congestion is real. In 2017, Klang VTS recorded an average of 231 vessels per day—almost one every six minutes. As traffic has grown since then, so too has the risk. Collisions are more likely in poor weather, and the route is frequently blanketed in haze from seasonal forest fires in Sumatra. Add to that strong ocean currents and fog, and you have a volatile mix.
“The most difficult stretch for navigation… is in areas spanned by the TSS … with six choke points and an average depth of about 23 metres,” explains RSIS maritime law expert Mohd Hazmi bin Mohd Rusli. Silting and shifting sands make these shallow zones especially treacherous.
Southeast Asia’s Supply Chain Boom
As Southeast Asia’s economies expand, the pressure only mounts. Vietnam, Indonesia, and Malaysia are becoming manufacturing powerhouses, producing electronics, EV components, textiles, and more. And most of their goods flow through the Strait of Malacca.
With more products come more ships, further crowding the strait. And it’s not just Singapore feeling the strain. Ports across the region are being tested—and not all are ready.
The Philippines, for example, has more international seaports than most of its ASEAN neighbors, but still lags behind in cargo throughput and container volume. According to Kris Francisco of the Philippine Institute for Development Studies, “The conflicting role of government agencies has contributed to the low quality of services and the inefficient functioning of ports.”
The country’s fragmented port system and overlapping regulatory bodies have created logistical inefficiencies that undercut its potential role in regional shipping.
Security Still a Concern
On top of infrastructure issues, maritime security remains a persistent threat. In 2024, Asia recorded 107 incidents of piracy and armed robbery at sea—a 6% increase over the previous year. The Straits of Malacca and Singapore saw a modest 2% decline, but the danger remains real, particularly for oil tankers and cargo vessels.
The Philippines is no stranger to these risks. Waters around the Sulu and Celebes Seas have long been hotspots for piracy and insurgent activity. Recognizing this, Indonesia, Malaysia, and the Philippines launched joint patrols in 2017, improving maritime coordination in these vulnerable areas.
Geopolitical tensions add another layer of complexity. Disputes in the South China Sea involving China and various Southeast Asian nations, including the Philippines, threaten to spill over into surrounding maritime zones. Meanwhile, the broader U.S.-China rivalry looms large over the region’s stability.
Environmental Damage and Clean-Up Efforts
With increased shipping comes environmental degradation. Ballast water discharge spreads invasive species, oil spills risk long-term marine damage, and vessel emissions pollute coastal ecosystems. Navigation mishaps are more likely in such crowded waters, raising the stakes further.
Singapore is trying to lead on this front. In 2024, the country used 880,000 tonnes of biofuel at its ports—a 69% increase from the year before. LNG use also quadrupled, and stricter rules on ballast water and ship waste have been implemented.
But regional coordination is still lacking. Environmental protections remain patchy across ASEAN, and enforcement varies from port to port.
The Push for Modernization
Governments are taking steps to address these challenges. Singapore is building the Tuas Mega Port—the world’s largest fully automated container terminal. It will use robotics and smart tracking to streamline cargo handling and increase capacity.
Malaysia is expanding Port Klang, while Indonesia is upgrading the Port of Belawan. The Philippines is also attempting to modernize its outdated port system, but progress has been slow due to bureaucratic roadblocks and underinvestment.
Real-time tracking and route optimization tools are helping shipping companies adapt. Some are now unloading cargo earlier at alternate ports or skipping stops entirely to stay on schedule. These workarounds offer short-term relief but don’t solve the underlying congestion problem.
The High Cost of Disruption
A blockage in the Strait of Malacca wouldn’t just stall regional shipping—it would ripple across the global economy. Rerouting ships around Indonesia would add over 4,600 kilometers to journeys and up to a week of extra sailing. The U.S. Energy Information Administration estimates that nearly half of the world’s shipping fleet would need to reroute, driving up fuel costs and vessel demand.
Recent disruptions in the Red Sea due to security issues raised global vessel demand by 3% and container ship demand by 12%. A similar incident in the Strait of Malacca would be far more damaging.
For countries like the Philippines, which imports energy and exports labor through seafaring, the impact would be especially severe.
What Lies Ahead
The Strait of Malacca is set to become even more critical in the years ahead. But without major upgrades to ports, stronger regional coordination, and serious investments in digital infrastructure, the current trajectory could jeopardize trade, energy access, and supply chain resilience across Asia.
As Southeast Asia continues to grow, how its leaders manage this crowded, fragile corridor may determine not just the fate of the strait—but the shape of global trade in the decades to come.
Reference : The Strait of Malacca Near Breaking Point: Supply Crisis