Intra-Asia Freight Rates Surge Amid Early Peak Season and Capacity Constraints

Heightened geopolitical tensions in the Middle East, coupled with an early peak shipping season, are increasing pressure on Intra- Asia container markets. While regional trade lanes remain operational, disruptions to global shipping schedules and higher operating costs have contributed to congestion and elevated freight rates across major Asian ports.

Congestion Grips Major Asian Hubs

With the increasing adoption of long-haul routes that traverse Africa by global ocean carriers, there has been an increased level of transshipment through major Asian ports. Major ports such as Singapore and Port Klang are facing the challenge of congestion and delays as a result of the new routes adopted. This problem has also been experienced in Chinese ports, especially in Shanghai, Ningbo, and Qingdao due to the recent closure of channels owing to bad weather conditions.

Freight Rates Rise Amid Early Peak Season

Freight rates across several Intra- Asian trades lanes have risen sharply as exporters advance shipments ahead of the traditional peak season and carriers contend with tighter vessel availability. Higher bunker fuel prices, operational delays and schedule disruptions have further increased transportation costs, while stronger demand from the manufacturing supply chains has further supported the upward trend in regional freight markets. As a result, Rates from Shanghai to Jawaharlal Nehru Port (JNPT) increased by approx. 30% per 40-foot container, reflecting stronger demand and tighter vessel availability. Similarly, Shanghai to Laem Chabang climbed 10% per 40-foot container, while Shanghai to Tanjung Pelepas rose 11% per 40-foot container, highlighting the strong pricing environment across the key regional routes.

Carriers Launch New Regional Services

To adapt to the shifting logistics landscape and bypass congested anchorages, ocean carriers are rapidly deploying new Intra-Asia services:

• Recently, COSCO Shipping introduced their latest SEI2 Service that has set up a new connection between South China, Northern Vietnam, and Western India. The service stops at various ports such as Qinzhou, Haiphong, Singapore, and Mundra.

• A major development in the Indonesian container network has been the introduction of a new weekly liner at the Port of Kuala Tanjung in North Sumatra by Samudera Indonesia. This vessel links up with the ports of Penang and Singapore, providing a marine express route that bypasses the busy port of Jakarta.

Short-Term Outlook

The Intra-Asia markets will remain turbulent for some time. Shippers cannot take the region’s stability for granted anymore, with the burden of geopolitical instability falling heavily on long-haul voyages. Fuel costs remain high amid congestion at key ports, necessitating a rethink of inventory placement, adjustment to higher freight costs within the region, and early booking of cargo space during peak season.