SIMIC

Record freight rates are also being supported by capacity constraints caused by port congestion and supply chain challenges, shipping executives and analysts say.

Intra-Asia carriers including Thailand's Regional Container Lines (RCL) and Hong Kong-listed SITC International Holdings have seen huge gains in average revenue per TEU since the beginning of this year.

Others, such as Taiwan's Wan Hai Lines and the pack of South Korean regional players led by market leader Korea Maritime Transport Company (KMTC), have reported surging profits and revenues.

Yu Du, research analyst at Drewry Shipping Consultants in Shanghai, said congestion constraining capacity, increasing demand, and disruption in supply chains are all key factors for the surge in rates.

"Another key reason for the jump in intra-Asia freight rates - shipping lines have moved their capacity, including vessels and empty containers, to the more lucrative east-west trades like trans-Pacific and Asia-Europe, leading to the capacity shortage in intra-Asia," Mr Yu said.

Intra-Asia is the world's largest container shipping market with total volumes forecast to grow 3.7 per cent a year to 2025, from 41.4 million TEU in 2021, according to consultant Seabury.

Highlighting the impact on Thailand's RCL, managing director Sumate Tanthuwanit said average revenue per TEU climbed to US$720 in the first quarter, up 86 per cent year on year, due to "prolonged port congestion and reduced global capacity."

This resulted in an "amazing performance" as net profit surged 180 per cent to a record $237 million in the first quarter from a year earlier, Mr Tanthuwanit said in a statement. Volumes climbed 11 percent to 572,000 TEU in the same period, he added.

Hong Kong-listed SITC said average revenue per TEU jumped to $1,242 in the first quarter, compared with $827 for the whole of last year and $768 for the first quarter 2021. Revenue soared 66 per cent to more than $1 billion in the first quarter, from $619 million a year earlier. Volumes rose 5 per cent to 729,836 TEU between January-March from 696,550 TEU last year.

Wan Hai Lines said last week that operating revenues had almost doubled to $3.5 billion in the first four months of this year compared with $1.8 billion in the same period last year. South Korea's KMTC saw a nine-fold surge in net profit last year to $1.2 billion, while revenue climbed 90 per cent to $3 billion, the carrier said in a recent filing to South Korea's corporate registry.

The gains in freight rates from Japan to Southeast Asia have been fuelled by a reduction in the number of calls by mainline carriers who have dropped ports, including Yokohama, on trans-Pacific and Asia-Europe services in an effort to restore schedule reliability.

The gap has been partially filled by regional and mainline carriers launching new intra-Asia services or enhancing existing loops with additional calls. These include Wan Hai Lines, which has launched its CI7 service connecting South China, Vietnam, and the east coast of India; and SITC, which launched new services to Malaysia, Myanmar, and the Russian Far East.

Explaining the impact of higher demand on the intra-Asia trade, Drewry's Mr Yu said exports from Vietnam increased 14 per cent in the first quarter this year, including a 48 per cent month-on-month surge in March from February.

"The first quarter and March figures for Vietnam have always witnessed high growth rate, but we may see Vietnam exports increasing further in April due to the lockdown in Shanghai," Mr Yu said.