Container carriers are capitalizing on a tightening intra-Asia market, driven by robust Chinese demand and typhoon-related disruptions that have led to blank sailings. These conditions have led to peak season rate increases, with hikes between $100 and $1,000 per TEU, depending on the route.
Rates on major intra-Asia lanes softened prior to China’s Golden Week in early October, along with other regional holidays, as production slowed. However, the last two weeks have seen a sharp reversal as demand surged post-holidays, according to industry sources.
Spot rates from China to Dubai, which had fallen to $700 per FEU in early October, recently rose to about $1,200 per FEU. Similarly, spot rates from China to India have surged over the past month, with rates from Shanghai to Nhava Sheva or Mundra (West India) now at $1,800 per TEU and $2,100 per FEU, a steep rise from $500 and $600, respectively, in early September.
However, Drewry’s intra-Asia container index, which monitors rates across 28 routes, has not fully reflected these hikes, instead showing a 15% decrease to $500 per FEU as of mid-October. Only routes between Busan and Shanghai, and Shanghai and Yokohama, showed rate increases during this period.
Capacity Cuts Due to Port Congestion
Typhoons affecting southern and eastern China, Vietnam, South Korea, and Japan in recent weeks have disrupted port operations, causing delays and reducing capacity. CMA CGM recently reported terminal delays in the Philippines due to Typhoon Trami.
Industry sources attribute the recent rate boost to cargo backlogs from blank sailings in September and increased Indian import demand due to the Hindu festival season running through November. Capacity between India and Asia-Pacific has tightened as carriers repositioned excess capacity from the China-India lanes to Middle East routes.
Early signs of rate strengthening emerged even before October. SITC International reported an average revenue per TEU of $691 in the third quarter, up from $632 in the first half of the year.
Additional rate hikes are anticipated if planned GRIs and surcharges proceed. CMA CGM’s CNC Line is implementing a $100 per TEU increase starting Oct. 28 across Southeast Asia, Japan, South Korea, and Bangladesh. Maersk is also introducing peak season charges between $1,000 and $1,500 per FEU on dry and reefer cargo from North Asia, including China, Vietnam, Singapore, and the Philippines, to South Asia starting Nov. 4.
