Drewry, a global leader in maritime research and consultancy, has launched the Intra-Asia Container Index (IACI). This new index is designed to track container freight rates across major Intra-Asia trade lanes, giving shipping stakeholders a critical tool to monitor one of the world’s most active and volatile container markets.
Sharp Decline in Intra-Asia Rates
The new index was introduced at a time when Intra-Asia rates have been under pressure. According to the inaugural report from Drewry, average spot rates on most Intra-Asia container routes dropped sharply in the first two weeks of September 2024. The IACI shows that the composite spot freight rate fell by 25%, bringing the average cost down to $668 per 40-foot container. This marks a significant 35% decline since the recent high of $1,025 recorded in late July.
The volatility in spot rates is not entirely unexpected, given the fluctuations in regional demand that have characterized the market recently. As container shipping growth increasingly shifts from long-haul intercontinental routes to intra-regional trades, such as Intra-Asia, understanding these regional dynamics is crucial.
What is the IACI?
The IACI is modeled after Drewry’s well-established World Container Index (WCI), which has been a key industry resource for monitoring East-West trade lanes. Much like the WCI, the IACI will serve as an open-access tool, allowing various stakeholders, including shippers, forwarders, and analysts, to keep tabs on this critical market. However, where the WCI focuses on global container trade, the IACI hones in on the nuances of regional trading within Asia.
The IACI is a volume-weighted index that tracks spot container freight rates across 18 major Intra-Asia trade lanes. These routes include key ports in China, Japan, South Korea, and Southeast Asia, as well as connections with India and the United Arab Emirates. The index measures freight rates in USD per 40-foot container and is updated fortnightly.
Trade routes such as Shanghai to Busan, Jakarta to Shanghai, and Jawaharlal Nehru Port to Shanghai are just a few of the lanes monitored under this new index.
A Growing Focus on Intra-Asia Trade
“Intra-Asia has become increasingly important in recent years,” says Philip Damas, Managing Director at Drewry. “When we launched the World Container Index 13 years ago, most attention was on intercontinental trades, but now we’re seeing a shift toward more regionalized markets. Monitoring these trades has become essential.”
The growth in Intra-Asia trade volumes has been one of the standout features of the global shipping landscape. Intra-regional trade now accounts for a substantial share of global container movements, driven by robust economic activity in East Asia, Southeast Asia, and South Asia. As companies look to shorten supply chains and tap into emerging markets, Intra-Asia trade is becoming a focal point for both carriers and shippers alike.
However, this shift has also introduced new challenges. With growing competition and capacity, volatility in spot rates has increased. As Drewry’s new index suggests, these rates can swing dramatically within short periods, making it more difficult for businesses to forecast logistics costs.
Drewry’s Comprehensive Offering
The IACI is just one of several new initiatives Drewry has planned for the Intra-Asia market. The firm will also be launching an annual subscription service called the Intra-Asia Container Market Insight in early October 2024, which will provide in-depth analysis and insights on this crucial trade area. The service will be available online for $2,275 annually and will complement the IACI by offering a more detailed look into regional developments, trends, and forecasts.
Drewry will also host a webinar on October 10, 2024, to brief industry stakeholders on recent developments within the Intra-Asia container market. The session promises to offer valuable insights from the newly launched Container Market Insight service and will be available for replay on Drewry’s website.
A Broader Perspective on Global Shipping
While the introduction of the IACI is focused on Intra-Asia trade, it is part of Drewry’s broader strategy to offer comprehensive insights into the maritime industry. The consultancy has been a trusted source of market intelligence for over 50 years, with expertise spanning across maritime research, financial advisory, and supply chain benchmarking.
Their ability to provide granular data on both global and regional markets gives them a unique advantage in helping clients navigate the complex and ever-evolving shipping industry.
The launch of the IACI further solidifies Drewry’s position as a leader in shipping intelligence, offering tools that not only inform but also guide business decisions in a sector that is increasingly driven by real-time data and regional market dynamics.
Source: Drewry
