Unusual market dynamics see shipping lines pushing through emergency fees despite falling cargo volumes
As of late April, rates on the key Busan–Southeast Asia corridor averaged 1,097per40ftcontainer-a161,097per40ftcontainer-a16528 per teu, an 18% year-on-year increase.
On the surface, this rally makes little sense. Container traffic between South Korea and eight Southeast Asian countries dropped 6% year on year in March, marking a continued post-Chinese New Year decline. Import volumes to the region fell 8%, while exports ran 4% weaker. By country, the picture is red across the board: Vietnam-the largest trading partner on those routes-saw volumes tumble 9% year on year to 111,300 teu, Malaysia gave up 8% to 51,500 teu, and Thailand contracted 10% to 48,200 teu. (Indonesia was the sole outlier, posting a 13% jump in container trade to 55,900 teu.)
So what's behind the rate spike? Bunker prices, pure and simple.
In late February, hostilities broke out between the US, Israel and Iran, triggering the closure of the Strait of Hormuz-a waterway that handles about 20% of the world's oil supply. Bunker fuel prices in Asia, which already tend to run higher than in Europe and the US due to the region's reliance on Middle Eastern imports, have more than doubled since before the conflict.
The math is brutal. A Namsung representative told The Loadstar: "Since the US/Israel–Iran conflict, bunker prices have tripled, from 400to400to1,200 per tonne. If we don't have surcharges, we can't maintain our profits." Shipping lines have responded by rolling out emergency fuel surcharges (EFS) ranging from 30to30to150 per container, layered on top of low-sulphur surcharges (50)andgeneralrateincreases(GRIs)thathavehit50)andgeneralrateincreases(GRIs)thathavehit400 on lanes like South Korea–Indonesia.
Drewry's Intra-Asia Container Index, which excludes terminal handling charges, registered a 6% hike as of 1 May, averaging $918 per 40ft. While that marked a slight dip from high levels seen in previous weeks, the index was still 26% higher year on year. "GRIs were supported by the effect of Middle East disruptions and bottlenecks on intra-Asia capacity and Asian ports," noted Philip Damas, head of Drewry Supply Chain Advisors.
Meanwhile, analysts project global container demand will grow only around 2.5% this year, weighed down by tariff uncertainty, while record newbuild vessel deliveries keep supply loosely balanced at best.
Green shipping: a long-term hedge
One longer-term trend worth watching is the accelerating shift toward low-carbon marine fuels. Asia-based container operators are now rapidly scaling up dual-fuel fleets, with major lines like COSCO taking delivery of methanol-retrofitted vessels capable of substantially reducing sulfur emissions. Ports across the region-from Shanghai and Ningbo to Hong Kong-are ramping up green methanol and LNG bunkering infrastructure, though widespread adoption is still years away.
When fully deployed, these investments could help decouple freight rates from the wild swings of conventional bunker markets. But for now, as one industry insider put it, "shippers just have to pay."
How XMAE Logistics navigates the storm
At XMAE Logistics, we've been watching this playbook unfold in real time-and helping our clients navigate around the worst of it. Headquartered in Xiamen, a Special Economic Zone prized for its streamlined customs clearance, tax incentives and integrated multimodal transport options, we're positioned right at the heart of Asia's most dynamic shipping lanes.
Here's how we turn market chaos into client advantage:
- Real-time rate visibility. Our digital logistics platform tracks bunker price movements and carrier surcharge announcements by the hour. We see EFS and low-sulphur surcharges coming before they hit your invoice, so there are no nasty surprises.
- Emergency response, built in. When fuel costs spike and carriers impose fresh fees, we've already modeled the impact across multiple routings. Our team proactively re-routes cargo-switching between transshipment hubs (think Singapore, Port Klang, Kaohsiung) to bypass congestion and limit surcharge exposure.
- Volume leverage, locked in. As an established NVOCC with long-term rate and bunker agreements across Southeast Asia, North America, Europe, the Middle East, India–Pakistan, Japan–Korea and Australia, we don't pay spot-market premiums that get passed straight to you.
- Capacity guaranteed. Tight capacity between China and Southeast Asia is driving up local charges and squeezing space-particularly out of South Korea. Our contracted agreements with leading carriers mean your cargo moves when it needs to move, without scrambling for empty slots.
- One-to-one support that cuts through the noise. Every client works with a dedicated account manager who understands your lane, your cargo profile and your unique constraints. No call centers, no generic advice-just real people solving real problems.
Fuel surcharges may be here for the foreseeable future. But paying more than you have to? That's optional.
Need a second opinion on your current carrier contracts? Reach out to XMAE Logistics for a free, no-obligation rate audit. We'll show you exactly where bunker surcharges are landing-and where we can cut them back.
XMAE Logistics – Xiamen
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