Intra-Asia Container Index - 09 Jul

Intra-Asia spot freight rates by major route ($USD/40ft)

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IACI eases as the peak season appears to have come to an end

• The Drewry Intra-Asia Container Index (IACI), the benchmark widely referenced by procurement teams, decreased 4% to $993 per 40ft container. Freight rates continue to fall, particularly on the Shanghai–Jawaharlal Nehru Port, Manila, and Ho Chi Minh City routes. This marks the third consecutive decline in the index, indicating that the early peak-season demand surge is easing, while congestion at Southeast Asian ports continues to improve.
• Spot rates on trade lanes connecting China with Southeast Asia and South Asia softened again this week, indicating that the early peak-season volume surge is nearing its end and upward pressure on freight rates is easing. Rates from Shanghai to Jawaharlal Nehru Port fell for a third consecutive week, declining 13% to $1,883 per 40ft container. Meanwhile, rates from Shanghai to Manila dropped 10% to $497 per 40ft container, extending the declines seen over the previous two weeks as congestion at Manila port eased, with average vessel waiting times falling by 7.8 hours WoW in Week 27. Rates from Shanghai to Ho Chi Minh City also decreased 6% to $858 per 40ft container. Trade tensions between the US and China continue to drive supply chain diversification. Manufacturers are expanding production capacity across Asia and driving further Capacity additions continue, with China United Lines (CULines) expanding its Far East–West India/Pakistan network through the launch of its new South Korea–China–India (KCI) service, with the first sailing scheduled for 17 July. The new service complements CULines' existing Western India offerings while introducing direct South Korea–West India/Pakistan connections, further strengthening regional connectivity. Drewry expects freight rates to remain broadly stable in the coming weeks.
• On trade routes from Southeast Asia, spot rates, which typically remain stable, recorded modest movements this week. Rates from Ho Chi Minh City to Shanghai increased $4 to $69 per 40ft container, while rates from Laem Chabang to Shanghai fell $9 to $220. CNC, CMA CGM's intra-Asia shipping arm, has revised its Japan–South China–Thailand–Cambodia ‘JTX’ service by replacing the Shekou call with Shantou, providing a direct connection from South China to Thailand and Cambodia. The updated rotation also adds Batangas in the Philippines, strengthening CNC's intra-Asia network and enhancing regional connectivity and shipment flexibility. Drewry expects freight rates to remain stable in coming weeks.
• The intra-Asia container freight market has remained resilient this year, with the index up 41% YoY, supported by early peak-season demand and higher shipping costs driven by geopolitical disruptions. However, the market has started to soften as the peak season draws to a close. Although the US and Iran reached an interim agreement, uncertainty over its implementation persists as hostilities continue, keeping geopolitical risks in the Middle East elevated and market sentiment cautious.