Intra-Asia Services Struggle as Smaller Ships Diverted to Long-Hauls

The cascading of smaller box ships to more-lucrative long-haul lanes has created a shortage of vessels for intra-Asia trades.

A meeting of representatives of the Korea Shipowners Association, Korea International Trade Association and domestic feeder operators, such as Sinokor, Namsung and Pan Ocean, heard that the lack of tonnage was giving exporters a hard time, as it had driven intra-Asia rates to rise fourfold from last year.

The Shanghai Containerised Freight Index showed that, on 12 July, the Shanghai-South-east Asia rate stood at $756 per teu. Now, the Korea Ocean Business Corp’s Composite Container Index shows the rate at around $1,413/teu.

As freight rates on routes from Asia to Europe, the US and to South America reach levels not seen since the pandemic, regional carriers are again making opportunistic ventures into these long-haul lanes, and have reassigned vessels from intra-Asia services. This is particularly true for foreign operators, while South Korean feeder operators tend to concentrate on their traditional routes.

Taiwanese intra-Asia carrier TS Lines’ 2,900 teu pair, TS Tacoma and TS Melbourne are being diverted from the Korea-China-Port Klang-Singapore and Far East Chennai services to join SeaLead Shipping’s Asia-US West Coast service

The KITA representative said: “As the number of ships being deployed on ocean-going routes increases, concerns are being raised about a shortage of ships on some routes within Asia. We ask domestic shipping companies to prepare in advance to support local shippers.”

The feeder operators believe the problem might be due to some shippers using foreign operators to move their goods, as they are more inclined to venture into ocean-going routes.

They said: “We have been deploying newly built vessels to increase slots. We’re also striving to solve the recent shortage of containers, but the cooperation of shippers is also necessary.”

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