Container shipping rates on intra-Asia trades have fallen to their lowest level in four years, according to Drewry’s Container Freight Rate Insight.
Drewry’s Intra-Asia Freight Rate Index fell 10% in the three months to January 2015 to reach $900 per 40ft, its lowest level since Drewry first started publishing the index in March 2011. The index has depreciated 7% in the last 12 months.
Intra-Asia Freight Rate Index being impacted by the slowdown in the Chinese economy
The Intra-Asia Freight Rate Index is a weighted average of spot container freight rates across multiple routes serving intra-Asian trades, excluding South Asia and Middle Eastern trades.
“Drewry’s Intra-Asia Freight Rate Index, which is typically stable, is now being impacted by the slowdown in the Chinese economy and cargo demand on these key trade lanes,” said Stijn Rubens, senior advisor at Drewry Supply Chain Advisors. “Shipping lines have also been deploying larger ships and introducing new services, which has only increased the pressure on Intra-Asia freight rates.”
The collapse in intra-Asian pricing contrasts with a recovery in global container freight rates over the same period. Drewry’s Global Freight Rate Index, a weighted average across the main deepsea trades, which excludes intra-Asia and intra-Europe trades, climbed 11% in the three months to January to reach $2,135 per 40ft.
Drewry said that much of the rise was supported by stronger rates on East-West headhaul trades, but pricing on North-South routes, particularly those serving South America and Africa have weakened in recent months.
“We expect the decline in intra-Asian rates to stabilise as trade picks up following the Chinese New Year holiday period,” added Rubens. “But longer term, rates on these routes will remain under pressure so long as carriers continue to cascade unwanted tonnage on these once buoyant trades.”