The intra-Asia shipping market is experiencing a vessel shortage with smaller container ships being reassigned to more profitable long-haul routes. Consequently, it has increased freight rates significantly.

Data from the Shanghai Containerized Freight Index shows that Shanghai-Southeast Asia rates have increased from $756 per TEU on July 12. According to the Korea Ocean Business Corp’s Composite Container Index, it is now approximately $1,413 per TEU.

The situation has prompted concern among industry stakeholders, including the Korea Shipowners Association, Korea International Trade Association, and domestic feeder operators like Sinokor, Namsung, and Pan Ocean. In discussing capacity shortages faced by exporters, the group discovered intra-Asia shipping costs have quadrupled since last year.

Lucratively high freight rates on deep-sea routes from Asia to Europe, the U.S., and South America are encouraging regional carriers to move smaller vessels to deep-sea routes. Foreign operators are more likely to reassign vessels to long-haul lanes, while South Korean feeder operators are focusing on their traditional routes.

Source: The Loadstar