Intra-Asia box rates climb $46 as smaller SE Asian ports choke

Intra-Asia container freight rates jumped $46 this week, taking the Drewry Intra-Asia Container Index (IACI) to $1,504 per 40ft, as congestion at smaller South-east Asian ports outweighed easing conditions at the major Chinese gateways and transhipment hubs.

Typhoon Champi and persistent congestion across South-east and South Asian ports are providing the temporary lift. But the timing matters. Slack season is kicking in, and carriers' bid to push through rate hikes looks, in the words of the trade, "doomed".

The picture splits cleanly in two. Spot rates from Greater China to North-east, South-east and South Asia were mostly stable during the week, because the big ports — those in China and Singapore — managed to absorb the congestion. The smaller South-east Asian gateways did not. Vessel delays and operational constraints there kept rates elevated on several tradelanes.

The numbers tell the story. Rates from Shanghai to Ho Chi Minh City, Jakarta and Laem Chabang remained high and kept climbing. At the end of October, Jakarta–Shanghai rates rose 9% week on week, to $81 per 40ft. The Shanghai Containerised Freight Index on Friday showed the Shanghai–South-east Asia rate up 2% from 30 October, to $1,164 per teu.

What is breaking at Tanjung Priok?

Jakarta's primary port, Tanjung Priok, is struggling to cope with vessel bunching. Sudden, unscheduled multi-ship arrivals instantly overwhelm the port's bottlenecked roads and container depots, which already sit at full capacity.

One forwarder at Taiwan's Dimerco told The Loadstar Jakarta's landside logistics had not caught up with improvements in terminal capacity. There's a reason for that gap. In August, Indonesian state-owned terminal operator Pelindo preliminarily launched Terminal 2 Petikemas. But construction of New Priok Eastern Access — the new road meant to fix access — only started in July and will take 20 months to finish.

The landside drag hits shippers' wallets directly. The Dimerco forwarder said: "Slow turnaround makes shipping lines reluctant to absorb the costs of repositioning empty containers. This local equipment shortage drives up the prices for available containers."

So the mechanism is simple. Ships bunch. Trucks queue. Empties don't move. Equipment gets scarce. Shippers pay more for the boxes that remain.

How bad is Ho Chi Minh City?

Worse, and quickly. Average vessel waiting times at Ho Chi Minh City have climbed from eight to 22 hours over the past fortnight. Yet the rate effect is muted on this lane — rates from Shanghai held unchanged, at $44 per 40ft.

By contrast, improving conditions at the major ports produced modest rate cuts on some routes. Shanghai–Singapore fell 3%, to $1,889 per 40ft, while Shanghai–Tanjung Pelepas slipped 2%, to $2,053 per 40ft.

Where is new capacity arriving?

One operator is adding tonnage to the Straits–Indonesia trade. Pacific International Lines (PIL) is scheduled to launch its new JKS service today. The fortnightly loop deploys two vessels of between 1,900 and 2,600 teu, calling at Singapore, Laem Chabang and Jakarta.

For shippers moving boxes between the Straits and Indonesia, the extra fortnightly sailing adds a modicum of optionality on a corridor where Jakarta's landside mess is inflating equipment costs. For carriers, added capacity into a softening season cuts against the rate momentum congestion has been supplying.

The forward question is whether the congestion premium survives the calendar. Big ports are absorbing pressure, waiting times at Ho Chi Minh City are rising, and Tanjung Priok's road fix is 20 months from completion — but with slack season underway, the drivers propping up intra-Asia rates look increasingly temporary.