- Drewry’s Intra-Asia Container Index rose 8% in early June but remains 27% below last year.
- Increased vessel capacity across Asian routes is driving competition and pressuring rates.
- Ongoing volatility expected as supply outpaces demand despite short-term rate spikes.
Drewry’s latest data shows that regional capacity on Intra‑Asia trade lanes has expanded notably, leading to increased pricing pressure on spot freight rates. In the first half of June, Drewry’s Intra‑Asia Container Index (IACI) rose by 8%, reaching $707 per 40-foot container. While this marks a short-term rise, the rate remains 27% lower compared to the same period last year, highlighting continued softness in the market.
Capacity Growth Outstripping Demand
The surge in capacity is largely being driven by increased vessel deployment and changes in trade patterns. Shipping lines are adding more tonnage to meet perceived demand, but in many cases, this supply is exceeding actual cargo volumes. This mismatch has led to intensified competition among carriers, forcing them to lower rates to fill slots.
Several external factors—such as ongoing port congestion in parts of Asia, shifts in trade routes due to new U.S. tariffs, and unpredictable demand cycles—have added complexity to the rate landscape. Although temporary spikes in rates can occur due to congestion or rerouting, the underlying trend remains bearish.
Market Outlook: Expect Continued Volatility
Looking ahead, Drewry expects ongoing rate volatility across Intra‑Asia trades. While capacity growth appears stable, the surplus supply is likely to outweigh demand for the foreseeable future. This means that short-term rate increases may be quickly offset by longer-term declines unless carriers adopt aggressive capacity management measures.
Impact on Shippers and Carriers
The extended period of softer rates could present cost-saving opportunities for cargo owners moving goods within Asia. On the other hand, carriers may find their profit margins squeezed unless they optimize network efficiency or pull capacity from overserved routes. Intra‑Asia shipping remains a vital segment of global container trade, and its dynamics will be closely watched in the coming months.
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Source: Drewry
