05 Aug Freight rates hit pandemic high across Asia
Ongoing Red Sea diversions, which have created longer shipping distances and times, are resulting in continual freight rate increases that continue unabated across numerous trade routes.
The subsequent disruptions, including vessel bunching and port processing delays, are being experienced at both ends of the Asia-Europe trade routes, reverberating to ports across Asia such as Singapore to create congestion and the associated reduced capacity with carriers rolling cargo or omitting port calls to maintain schedule reliability.
Further compounding these conditions are the increasing exports from Southeast Asia. All culminating and further fuelling intra-Asia freight rates, which have seen various prices hit 30-month highs on some trades from China.
According to online rate benchmarking platform Xeneta, spot rates from Shanghai to Bangkok and Vietnam are at their highest since December 2021, with rates from Shanghai to Bangkok near to $1200 per FEU and Shanghai to Vietnam near to $1000 per FEU, all rates not seen since the COVID years.
To further aggravate matters, there is a shortage of vessels, especially those of 4,250 TEUs or more, and it appears that operators are seeking not only higher charter rates, but also longer periods of a year or more, which will subsequently create more upward price pressure on freight rates.
Meanwhile, these capacity issues have led to operators to explore alternative transportation modes such as sea, air, rail and road for regional intra-Asia trades and intra-Asia to the Middle East and India.
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