The Intra-Asia container freight market saw a notable decline in the past fortnight, with the regional composite index dropping 8% to $615 per 40ft container, reflecting weakening demand and shifting trade dynamics.
According to the latest data from Drewry Supply Chain Advisors, the Intra-Asia Composite Index (IACI) is a volume-weighted index tracking spot container freight rates across 18 major Intra-Asia trade lanes to and from China. The index includes key routes spanning North/East Asia (Japan, South Korea, and Taiwan), Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam), and South/West Asia (India and the United Arab Emirates). The recent decline signals continued volatility in the regional trade environment.
The decrease in rates is attributed to softer market demand, easing congestion, and increasing competition among carriers. Industry analysts suggest that carriers are facing mounting pressure to adjust pricing strategies as capacity remains ample and economic headwinds impact shipping volumes.
Key Trade Lane Performance
Spot freight rates across major Intra-Asia trade lanes have reflected this downward trend. While exact figures for each route have yet to be fully disclosed, sources indicate that some corridors have seen steeper declines than others.
Market participants highlight that the reduction in rates may also be linked to seasonal fluctuations following the Lunar New Year period, a time when trade activity typically slows down. Additionally, shifts in manufacturing hubs and changing supply chain strategies have influenced demand patterns, particularly as companies look beyond traditional sourcing locations in China.
Industry Perspective
Freight forwarders and shippers are closely monitoring the market as they assess the impact of these rate changes on logistics planning. “While rate drops can provide cost relief to shippers, they also indicate a softening market, which could lead to longer-term pricing adjustments,” said a senior industry executive.
In contrast, some carriers are adopting capacity management strategies to stabilize rates, including blank sailings and route optimizations. However, with competitive pressures persisting, maintaining profitability remains a challenge.
Source: Drewry
