In what is the world’s largest trade by volume, and deployed capacity, it was an anomaly that the intra-Asia trades did not have a dedicated spot index to match the other major tradelanes out of Asia to Europe and the US.
Philip Damas, MD and head of Drewry supply chain advisors, told Seatrade Maritime News: “The IACI will bring clarity and transparency to the market in the world’s largest trade.”
Geopolitical tensions are affecting supply chains in ways that, perhaps, politicians had not considered or intended when imposing import tariffs on Chinese goods.
Reacting to the tariffs imposed in consumer countries China, the manufacturing centre of the western world, at least, is increasingly sending semi-manufactured goods to markets such as Vietnam where the products are finished and shipped to consumer markets tariff free.
Damas further noted that container market growth has now moved from intercontinental to intra-regional trades, and therefore, “monitoring these trades is now far more important than was the case 13 years ago, when we launched the World Container Index.”
In the first IACI was published on 17 September the trade is seeing rates tumble as demand has tailed off from the June to August peak season. The index will be published fortnightly.
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Drewry market analysis indicated that there was considerable volatility in intra-Asia spot rates over recent years, with rates rising strongly this summer and now correcting downwards sharply with softening regional demand.
Average spot rates decreased 25% to $668 per feu container in the last two weeks and has declined 35% since its peak of $1,025 per feu in the second half of July.
“Port congestion has reduced and demand has softened,” said Damas in what is now a highly interconnected market.
The consultancy said that IACI is a volume-weighted index of spot container freight rates on 18 large Intra-Asia trade lanes to and from China, three North/East Asian countries (Japan, South Korea and Taiwan), five South East Asian countries (Indonesia, Malaysia, Philippines, Thailand and Vietnam) and two South/West Asia countries (India and the United Arab Emirates).