SE Asia Rates Outpace U.S. West Coast: A Supply Chain Shift

A notable phenomenon has recently emerged in the shipping market: container freight rates on some major Southeast Asia routes have continued to rise, now periodically exceeding the rate levels of the traditional mainline route—the U.S. West Coast.

According to market quotes provided by several freight forwarders, the current rate for a 40-foot container (FEU) from Shanghai to Indonesia has reached $2,000, while rates to Vietnam are approximately $1,500/FEU, and to Malaysia and Singapore around $1,200/FEU. Compared to the current Shanghai to U.S. West Coast rate range of $1,300–$1,500/FEU, rates on some Southeast Asia routes have now overtaken them.

Changes in freight rate indices confirm this trend. The China Containerized Freight Index (CCFI) released by the Shanghai Shipping Exchange shows that as of December 12, the Southeast Asia route index stood at 1073.82 points, a significant increase of 23.3% compared to a month ago. In contrast, the U.S. West Coast route index was 798.95 points, down 5.6% over the same period. This situation, where short-haul route rates exceed those of long-haul routes, is uncommon in the market.

Analysis suggests this round of unusual rate movements is closely tied to adjustments in global supply chain layout. Influenced by factors such as uncertainty in U.S. trade policy, the trend toward supply chain diversification under the "China Plus" strategy has accelerated. This has driven significant growth in transportation demand for raw materials and semi-finished products exported from China to Southeast Asia. As a key destination for shifting manufacturing processes, logistics demand within Southeast Asia remains robust, pushing up route freight rates.

Faced with strong market demand and attractive freight levels, shipping lines are actively adjusting capacity deployment. For example, Evergreen Marine, Yang Ming Marine Transport, and Wan Hai Lines jointly launched a new direct service from North China to Indonesia in November to accommodate rapidly growing trade between the two regions. The Chairman of Yang Ming Marine Transport recently stated that the company would optimize its fleet configuration, deploying more new capacity into niche markets with strong cargo demand and favorable freight performance, such as intra-Asia routes.

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