If you've been watching intra-Asia container rates over the past couple of months, you might have noticed something odd. After a steady six-week slide that had everyone breathing a sigh of relief, the downward trend suddenly stopped. And the culprit? A familiar one: oil.
The Drewry Intra-Asia Container Index (IACI) remained stable at USD 956 per 40-foot container in early August. Then, just last week, it jumped 6% to hit $1,028 per FEU – a six-week high. That's the second consecutive weekly increase, and it's driven by one thing above all else: surging bunker fuel costs.
Here's what's actually happening.
The fuel shock that won't go away
Remember when bunker prices cooled off a bit after the initial Iran conflict spike? That respite didn't last. Following renewed hostilities in the Strait of Hormuz, fuel prices have soared dramatically once again. Low-sulphur fuel oil averaged $856 per tonne on May 28 – up 68% from mid-February. And according to some reports, the metric ton price of bunker fuel, which was around $600 before the conflict, has exceeded the $1,300 band.
Maersk's numbers tell the story clearly: its average bunker price rose 44% to $777 per fuel-oil-equivalent tonne, while total bunker costs increased 36% to $2.1 billion in the second quarter. Hapag-Lloyd estimated the conflict resulted in around $600 million in additional costs in Q2 alone.
That's real money. And it has to go somewhere.
How fuel is pushing intra-Asia rates back up
Here's the twist: intra-Asia rates had been sliding for six weeks. Demand was softening, peak season was winding down, and things were looking moderately calm. Then the fuel shock hit, and carriers wasted no time.
According to Drewry, carriers plan to apply emergency fuel surcharges ranging from USD 38 to USD 75 per TEU on regional short-haul routes starting from the first week of August. These aren't small numbers for short intra-Asia legs. On top of that, shipping lines have been justifying $100 emergency fuel surcharges and $50 low-sulphur surcharges on top of general rate increases.
Drewry's MD Philip Damas put it simply: oil prices are the most critical factor in intra-Asia rates right now. The IACI is now more than 80% higher than before the start of the Iran conflict. And as long as the Strait of Hormuz remains unstable, there's no sign of softening spot rates.
Demand is weak – but rates are rising anyway
This is the part that doesn't make intuitive sense. Cargo volumes aren't exactly booming. Korea Customs figures for March showed container traffic between South Korea and eight Southeast Asian countries down 6% year on year. Both export and import volumes weakened.
Yet rates keep climbing.
That's because this isn't a demand-driven rally – it's a cost-driven one. Shipping lines are using volatile bunker prices to justify emergency fuel surcharges, regardless of what cargo volumes are doing. And with the Strait of Hormuz still closed and regional tensions showing no sign of easing, carriers are covering themselves against unexpected fuel price hikes.
To make matters worse, port congestion across China is adding another layer of pressure. Typhoon Dolphin – the third and strongest tropical storm to hit China in five weeks – forced vessels to seek refuge and added to congestion around East Asian ports. Approximately 2.4 million TEU of containership capacity is currently waiting outside Chinese ports, with average waiting times reaching 87 hours at Shanghai.
What this means for your supply chain
Here's the reality: when oil prices spike and carriers pass those costs down, you're the one who ends up paying. Emergency fuel surcharges, GRIs, and general rate hikes all add up – and they hit your bottom line whether demand is strong or weak.
But here's the good news: not all logistics partners handle this the same way.
1. This is where experience actually matters
At Xiamen AE Global, we've been moving freight through exactly this kind of volatility since 2018. We're a government-licensed company with IATA, FIATA, FMC, and NVOCC credentials – which means when bunker prices spike and carriers scramble to impose surcharges, we have the global network and the relationships to protect our clients from the worst of it.
2. Real relationships, real leverage
With over 100 overseas agents worldwide, we don't just watch the rate indices from a distance. We work directly with our partners on the ground to understand what's really happening with capacity and pricing on each intra-Asia trade lane. When carriers announce emergency fuel surcharges, we know about it – and we negotiate from a position of strength.
3. Visibility that cuts through the noise
We've invested heavily in technology that gives our clients real transparency – not just a tracking number, but actual insight into what's happening with rates, capacity, and alternatives. When fuel costs spike and surcharges land, we don't wait for you to find out the hard way. We alert you immediately and present options.
4. Local knowledge where it counts
Based in Xiamen – right at the heart of Asia's busiest trade lanes – we understand the intra-Asia market better than most. We've moved over 12,000 TEUs in a single year with a 98.6% on-time delivery rate for our SME clients. That's not luck – it's relentless execution and a network that doesn't fall apart when the market gets complicated.
The bottom line
The intra-Asia freight market is being reshaped by forces outside anyone's control. Geopolitical conflict in the Middle East is driving bunker prices to levels not seen since the 1970s. Carriers are passing those costs down through emergency surcharges. And port congestion across China is adding yet another layer of disruption.
For shippers, that means one thing: you need a logistics partner who understands the market dynamics, has the relationships to secure competitive rates, and can help you navigate the volatility – not just absorb it.
At Xiamen AE Global, we don't just move boxes. We help our clients stay ahead of the curve – whether that's negotiating better rates, finding alternative routing options, or simply making sure your cargo gets where it needs to go without paying a premium for the privilege.
Because when fuel prices spike and the market turns chaotic, you don't need a spectator. You need a partner who's already in the game.
Ready to protect your supply chain from rising fuel costs? Contact Xiamen AE Global today – and let's talk about smarter logistics for a volatile market.
