News / Intra-Asia lanes gain capacity and rates soar as Middle East loses out

Intra-Asia rates are now more than 80% higher than before the US/Israel conflict against Iran, as bottlenecks hinder shipping lines’ attempts to move vessels out of the Middle East and refocus on Asia.

Drewry’s Intra-Asia Container Index shows that on 29 May, average intra-Asia rates were 7% above the previous fortnight, at $1,008 per 40ft, a year-on-year increase of 54%.

The China-India route led the way, with rates gaining 49%, to $1,753 per 40ft, followed by Indonesia-China, up 22% to $83 per 40ft.

The Shanghai Containerised Freight Index shows the Shanghai-South-east Asia rate went up to $607 per teu on 29 May, from $585 on 22 May. Compared with the same period a year ago, rates are now 38% higher.

As the conflict against Iran has limited seaborne transport to the Middle East, shipping lines have been refocusing on the growing lanes between East Asia, South-east Asia and the Indian subcontinent and today, Cosco launched its South-east Asia India Service 2, connecting Qinzhou, Xiaochan Beach, Haiphong, Singapore, Mundra, Singapore, Hong Kong, and Qinzhou.

The service will turn in 35 days and will deploy five 3,300-4,400 teu ships, starting with the 4,250 teu Xin Tai Cang from Qinzhou today. It will offer the first direct connection between Haiphong and India.

Also, from 21 June, Gold Star Line (GSL) will back out of its joint Far East-Western India service with KMTC Line, Evergreen and Emirates Shipping Line (ESL) to team with Global Feeder Shipping to offer a revised New India Express service, covering Shanghai, Ningbo, Dachan Bay, Port Klang, Nhava Sheva, Hazira, Mundra, Port Klang, Haiphong, and Shanghai.

The loop, which removes Colombo and Singapore calls, will continue to turn in six weeks, using five 4,300-5,600 teu ships.

KMTC Line, Evergreen and ESL will continue their cooperation, but with six 5,500-9,500 teu vessels calling at Shanghai, Ningbo, Shekou, Port Klang, Nhava Sheva, Hazira, Mundra, Port Klang, and Shanghai. Calls at southern China have been moved from Dachan Bay to Shekou, while Colombo is dropped.

Drewry Shipping Consultants MD Philip Damas told The Loadstar capacity on the North Asia-Middle East and South-east Asia-Middle East routes had collapsed by 70.6% and 67% year on year, respectively.

He added: “This structural retreat is likely a response to ongoing geopolitical friction and operational realignments that have coincided with a demand spike. In contrast, other regional corridors are seeing supply injections as carriers pivot toward manufacturing hubs with higher reliability.”

Capacity on South Asia-North Asia and South Asia-South-east Asia routes has grown 43% and 51% in the year to April.

Mr Damas commented: “These increases are however being blunted by operational bottlenecks. Port utilisation in major hubs like Singapore remain at critical levels, with rolling pools of displaced containers forcing carriers to prioritise westbound traffic, which in turn slows the repositioning of empty units into South Asian corridors.”

Xeneta’s chief analyst, Peter Sand, told The Loadstar that Asian exporters were driving the redrawing of routes.

He said: “Networks are adjusted not only away from calling Jebel Ali/Damman or the like. but also internally in Asia. This should not be mistaken for a lower level of capacity, but merely network disruption and changes.”