Intra-Asia trade tipped to reach 50.7m TEU by 2013

Asia - New free trade deals and China acting as a regional resource centre will push intra-Asia trade to reach 50.7 million TEU by 2013, said a report.

According to a recently published Drewry Shipping Consultants report, intra-Asia trade amounted to some 28.6 million TEU in 2007, accounting for one-fifth of total global trade. The report believes that with China acting as a regional resource centre and with new free trade deals emerging, intra-Asia trades will continue to grow at a robust pace in the short to mid-term to reach 50.7 million TEU by 2013.

The report said intra-Asia trade is dominated by both niche, regional and global operators operating ships as small as 150 TEU up to 4,000 TEU or more. Local players such as Temas Line and Winland Shipping currently compete with pan-regional operators such as Regional Container Lines and Samudera as well as global carriers like K Line and Yang Ming.

Current trends include regional players expanding into the deep-sea markets and larger vessels being deployed on the core China/ASEAN axis, the report said. This resulted in a number of global ocean carriers launching more of their own intra-Asia services for their feeder requirements.

However, these developments have not necessarily been healthy for all participants in this market since they have expanded supply, undermined freight rates and damaged regional players' profitability, Drewry said.

The company warns that rising fuel costs and variable charter rates will continue to plague players in the region, and will be well-advised to be flexible and diversify their business portfolios to remain profitable. Shippers should also be aware that transit times are gaining in importance with raw materials and semi-finished products moving from SE Asia to China.