China shipping to Southeast Asia sees prices surge tenfold as reopening demand picks up

Already taxed by the coronavirus pandemic, intra-Asian shipping routes have entered their traditional peak season

Reopening and work resumption in Southeast Asia, as well as ongoing disruptions in the global logistics network, have contributed to record high prices

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As a result of sustained elevated demand, including for raw materials from China, congestion continues to worsen at major Southeast Asian ports. Photo: Reuters

Published: 5:00am, 10 Dec 2021Updated: 5:29am, 10 Dec 2021

Shipping rates from China to surrounding Asian countries have soared amid the peak season ahead of the Lunar New Year, adding fuel to an already overheated global shipping market disrupted by the coronavirus pandemic.

The Southeast Asian routes of the Ningbo Containerised Freight Index, which reflects the spot rate of container ships departing from the Ningbo-Zhoushan port – the world’s largest port by cargo tonnage – recorded a price surge in the past month and reached an all-time high, with freight costs to Thailand and Vietnam rising 137 per cent from the end of October to the first week of this month, while the Singapore-Malaysia freight costs also increased by 49 per cent.

A 20-foot container, shipped from Shenzhen to Southeast Asia, cost about US$100 to US$200 before the pandemic, but the price has since surged tenfold, from US$1,000 to US$2,000, said Yan Zhiyang, a manager with a logistics company based in Guangdong province.

High rates and congestion are ultimately the results of a consumer-spending shift from services to goods that began early in the pandemic

Judah Levine, Freightos

“Shipping costs to various destinations have risen and fallen repeatedly. Sometimes the export demand for a specific place suddenly rises and pushes up the rates immediately, and when the demand cools a bit, the rates drop. But in general, the freight costs have gone up multiple times,” Yan said.

Meanwhile, freight costs to South Korea also quickly picked up in the past two months, according to Zhou Jie, who manages a freight-forwarding company based in Dalian, a coastal city in northeast China.

“Generally, the prices of other routes have been soaring since the beginning of the year, but the route to South Korea started to rise quickly in the past two months, and now it has reached US$1,600 per 20-foot container, compared with US$200 during normal times,” Zhou said.