LA container imports jump as US east coast ports slump
Propelled by an 18% jump in box traffic in March, the port of Los Angeles ...
By Alison Koo
Intra-Asia rates continue to rise – despite sluggish cargo volumes – as operators continue to use volatile bunker prices to justify emergency fuel surcharges.
Korea Ocean Business Corporation’s Container Composite Index (KCCI) shows that, as of 27 April, Busan-South-east Asia rates averaged $1,097 per 40ft, up $12 from a fortnight ago.
And compared with average rates of $933 per 40ft in March, this is a 16% increase, a level not seen since last June, when rates averaged $1,129.
The KCCI Busan-South-east Asia averages are calculated based on freight rates for the Busan-Vietnam, Indonesia, and Singapore routes.
On 1 May, Drewry’s Intra-Asia Container Index registered a 6% hike on rates a fortnight ago, averaging $918 per 40ft.
The inceased rates belie the weak cargo demand. Korea Customs figures for March show container traffic between South Korea and eight South-east Asian countries down 6% year on year, to 353,600 teu, continuing a post-Chinese New Year decline.
Both export and import volumes weakened: exports fell 4% year on year, to 174,400 teu; while imports dropped 8%, to 179,200 teu.
By country, all except Indonesia showed negative growth. Vietnam, South Korea’s largest trading partner on South-east Asian routes, recorded a 9% year-on-year decline, to 111,300 teu. Its third-largest trading partner, Malaysia, saw an 8% drop, to 51,500 teu, and Thailand, the fourth-largest trading partner, recorded a 10% decline to 48,200 teu.
Indonesia, on the other hand, recorded a 13% jump in container trade, to 55,900 teu.
Meanwhile, the higher oil prices have brought inflationary pressures, causing consumers to tighten their belts. And the spike in oil prices is also driving up freight rates, with shipping lines justifying $100 emergency fuel surcharges and $50 low-sulphur surcharges on top of GRIs.
This is despite bunker prices having cooled from an initial surge that saw prices pass $1,000 per tonne. Shipping lines have argued that as long as the Strait of Hormuz remains closed, they must cover themselves against unexpected fuel price hikes.
Drewry Supply Chain Advisors head Philip Damas told The Loadstar: “GRIs were supported by the effect of Middle East disruptions and bottlenecks on intra-Asia capacity and Asian ports.”
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