Rising rates on intra-Asia routes to five-year highs amid a capacity crunch born of an acute shortage of empty containers, has commanded fresh attention in the market, say carriers and shippers alike.
The tightness in supply has mainly been caused by the global container shortage, carriers redeploying boxes and ships to main line services, and a regional economic recovery, reports IHS Media.
The rebound and resurgence of box volumes has encouraged carriers including Wan Hai Lines, Gold Star Line, Ocean Network Express, and OOCL to launch a raft of new services, say sources.
“Market rates for destinations in Vietnam, Thailand, and Malaysia are now the highest for five years,” Danny Hoffmann, managing director of Hong Kong headquartered Gold Star Line, a Zim unit.
“Carriers are assigning containers and vessels to the long-haul trades as a top priority. With the trans-Pacific, Africa and Australia markets booming from the second half of 2020, most carriers have started to void intra-Asia sailings, pulling vessels to put them as extra loaders on these trades. As a result, market capacity has been squeezed.”
Said Peter Sundara, vice president of Hong Kong’s LF Logistics: “Rates have risen mainly on the back of a lack of 40-foot containers and a capacity crunch caused by blank sailings.”
Mr Sundara said the situation has been exacerbated by main line carriers redeploying containers and vessels to the main transpacific and Asia-Europe trades.
“The east-west trades are better paying in terms of yield management so mainline carriers will naturally prioritise 40-foot boxes for these trades compared with intra-Asia services,” he said.