Freight rates for intra-Asia routes skyrocketed

Intra-Asia shipping routes, from China to Vietnam, Thailand, Bangladesh and Sri Lanka, are all seeing high demand, as factories in the region have recently reopened after shutdowns and need more raw materials from China.

Port of Shanghai, China

Port of Shanghai, China

A Shanghai-based forwarder told The Loadstar that up to 90% of container ships leaving Chinese ports were delayed. The main reason is due to congestion at the destination ports.

This forwarding company added: "After a period of soft rates for almost two months, sea freight prices have gone upwards again."

“The overall volume ex-China is less, but the overseas disruption to logistics chains and port handling efficiency is the major issue behind the big price increases.”

“Normal pre-pandemic prices to those destinations were around $200-$300, while the highest level last year was $2,000 – now, some rates are over $3,000,” said the forwarder.

At the same time, forwarders in China and Australia are also looking for short-term rates from shipping lines.

This forwarding company said that shipping lines do not offer long-term prices to forwarders. “They offer for two weeks only, except for some very exceptional cases.”

But shipping lines do offer long-term contract pricing to direct customers, depending on their volume and support for the shipping line. In other words, shipping lines are ignoring forwarders.

Incoming forecasts, a forwarder - ocean freight specialist - said January could remain a busy month if Europe continues to have demand for rapid test kits. If not, the market could drop, as most shippers normally cannot stand the current high rates.

The market for the Lunar New Year, and the usual quiet time of the year when the festivities are underway, also look precarious compared to previous years.

The forwarder noted: "But due to the Beijing Olympics and strict quarantine regulations, it is likely that this year the Chinese government will again encourage people to reduce non-essential travel, which means Some factories can still produce goods during the Lunar New Year period. Therefore, we may not see a quiet market as usual."

Read more: