Cautious air cargo shippers delay tenders amid signs rates may have peaked
Air cargo shippers are increasingly delaying tender decisions and extending existing contracts, rather than locking ...
By Alison Koo
Intra-Asia rates have corrected this month, due to a combination of factors.
Drewry’s Intra-Asia Container Index (IACI) registered a 13% drop to $704 per 40ft in the first fortnight of July, compared with the last two weeks of June.
The assessment was based on 18 routes, including Busan-Shanghai, Ho Chi Minh City-Shanghai, Jakarta-Shanghai, Shanghai-Singapore, and Shanghai-Tanjung Pelepas.
Xeneta’s senior shipping analyst, Emily Stausboll, told The Loadstar rates varied across intra-Asia routes, and that average spot Vietnam-Shanghai rates had been down 16% since 20 June, but Shanghai-Singapore rates went up.
IACI showed that this month, Ho Chi Minh City-Shanghai rates had fallen 32%, while Shanghai-Singapore rates were generally flat.
Ms Stausboll said: “That’s why it is so important for shippers to monitor and benchmark their rates against the market at port level, and not just rely on regional data.”
Front-loading by US shippers to beat the implementation of tariffs is virtually over, meaning the usual Q3 peak season may not happen.
Ms Stausboll explained: “A lot of intra-Asia volumes are semi-manufactured goods which are ultimately exported out of the region. We expect to see lower export volumes out of Asia in the coming months, due to the front-loading that has already taken place.
“This means reduced manufacturing and reduced intra-Asia container shipping demand, therefore easing pressure on capacity and pushing freight rates downwards.”
On 11 July, the Shanghai Containerised Freight Index showed the Shanghai-SE Asia rate flat at $451 per teu, but this was a 40% year-on-year drop.
The intra-Asia lane has also seen a capacity influx. Sub-panamax and feeder ships withdrawn from foundering transpacific and Russia-bound routes have been redirected to intra-Asia and Red Sea routes, noted Linerlytica.
The North Asia-SE Asia lane has 717 ships of approximately 1.7m teu, down 2% from June, but still 12% higher year on year.
Intra-South-east Asia routes showed the highest year-on-year capacity injections, with 140 ships of nearly 277,000 teu active in the trade, a 40% increase on July 2024.
On 11 July, the Korea Ocean Business Corporation’s Container Composite Index registered a 12% weekly drop in the South Korea-SE Asia rate, to $1,053 per 40ft.
A manager at South Korean feeder operator Dongjin Shipping said that while South Korea’s exports to South-east Asia were strong, imports were weak, due to lower consumption in South Korea.
Korea Customs figures show container traffic between South Korea and eight South-east Asian countries in May was 365,000 teu, up 5% year on year. However, growth was mostly negative this year, dragged down by sluggish imports.
On the other hand, South Korea’s exports to South-east Asia reached a record high, of 1.78m teu, in the first five months of the year.
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