The traditionally robust intra-Asia container shipping market is showing signs of instability as a significant surge in effective shipping capacity, coupled with softer demand growth, begins to impact freight rates. New data from Drewry’s latest Intra-Asia Container Market Insight reveals a concerning trend that could redefine the region’s shipping landscape.
Total effective shipping capacity deployed by carriers across all intra-Asian trades escalated by 8% between April and May 2025, representing an increase of 646,000 twenty-foot equivalent units (kteu). This substantial injection of capacity is now jeopardizing the relative stability that has long characterized most intra-Asian trade routes.
The top five intra-Asia routes alone witnessed an average capacity increase of 9% over the same period. Routes such as Southeast Asia-Greater China and North Asia-Greater China experienced double-digit growth in deployed capacity, while other routes saw slower, but still significant, increases. In stark contrast, traffic volumes on these top five routes rose by a modest 4% during April and May, indicating a growing imbalance between supply and demand.
The Greater China-to-North Asia trade, one of three main routes generating over 5 million teu annually, absorbed the largest monthly increase in effective capacity in May. Carriers boosted effective capacity on this headhaul route to 595 kteu, adding 41 kteu (+7.3%) compared to April. The backhaul direction saw an even more pronounced increase of 83 kteu (+9.6%). As a direct consequence, headhaul utilization levels for Greater China-to-North Asia plummeted from a healthy 84% in April to just 74% in May, leading to an immediate faltering of spot rates. Drewry anticipates further softening of freight rates in the coming weeks.
Similarly, the Southeast Asia-to-Greater China trade experienced a massive 15.4% monthly increase in capacity, adding 226 kteu. Drewry warns that once this substantial capacity turns to the headhaul, likely in the coming month, it could trigger a cascade of freight rate reductions across other interconnected trade routes within Asia.
Drewry’s Intra-Asia Container Index (composite), which provides a weighted average of spot rates across 18 major trade routes in Asia, reflects this downward pressure. The index has declined by 27% year-to-date, reaching US$707 per 40ft container as of June 1-15, 2025.
