India-Gulf container rates plunge as capacity returns and cargo backlogs ease
Container shipping rates from India to the Persian Gulf have significantly softened from the peaks ...
© Alfonsus Anom Sudijono
By Alison Koo
China is cultivating trade ties with Southeast Asia and Europe in the face of intensifying tensions with the US, and this will only expedite the trend towards near-shoring and regionalisation, said a Chinese container industry executive.
Speaking at a conference last week, the executive said that in the first five months of 2025, China’s exports hit a record high as shippers front-loaded to beat US President Donald Trump’s “Liberation Day” tariffs.
“Exports to Southeast Asia and Europe increased, effectively countering the decline in exports to the US. China’s industrial competitiveness has been continuously enhanced, while we’re accelerating innovation, exporting more high-value products.
“Industries are shifting from China to Asean with rising labour costs, promoting the rapid growth of China’s foreign direct investment in Asean. Increasingly, Chinese enterprises are growing their Asean presence.”
Container Trade Statistics’ latest figures show that in April, Far East-Europe shipments were up 2% y-o-y to 1.86m teu, while Far East-North America shipments fell 13% to just under 1.86m teu. Intra-Asia trade dipped 3%, but far exceeded long-haul volumes, at 3.52m teu.
In Maersk’s global market update (summer), released today, the Danish line’s commercial chief Karsten Kildahl alluded to US shippers’ increasing decoupling from China.
Mr Kildahl said: “In recent years, we have seen a deliberate strategy from many of our large US customers to reduce import dependency from China. Many apparel and fashion customers have now reached single-digit China dependency, whilst other commodities like home improvements have a significantly higher level of Chinese manufacturing due to the nature of the goods. This is not just a short-term tactical reaction to escalating geopolitical tensions, but rather a long-term strategic move to future-proof supply chains and remain resilient.”
China and Asean have formed a close cooperation in the fields of electronics, garments and automobiles. For example, exactly a year ago, Chinese electric vehicle maker BYD opened its first manufacturing plant in Southeast Asia, launching an EV factory in Rayong, Thailand. In 2022, Chinese smartphone maker Xiaomi began producing mobile phones in its factory in Vietnam.
The executive said: “This portends a continuous growth of Asean’s trade with China, and China’s market share of the export of intermediate goods exports has increased significantly. The rise of emerging economies has changed the international logistics pattern, and the demand for intermediate goods logistics is more complex than that of end-products. This will reshape the flow of container logistics, diverting container movements to China and Asean.
“The “Belt and Road” initiative has diversified China’s logistics channels, and increasing protectionism from the US will change global shipping patterns. It’s likely that the proportion of ocean-going container shipping routes will decrease, and be substituted with more land-sea linkages and multimodal transportation.”
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