Australia’s international container trades are increasingly and irreversibly dominated by Asia. And despite regular overtures by potential new entrants, the routes to/from North & East Asia and South-East Asia remain in the hands of the box business big names. DCN takes a look at the state of play.
Shipping is often described as the purest of free markets, where assets roam the world in search of opportunity and profit, and barriers to entry are low, especially in tramp trades.
But the situation is a little more restricted for container aspirants: even short-sea services, such as trans-Tasman, require three ships to maintain the bare-minimum weekly frequency. And for South-East Asia, it’s five vessels. For North & East Asia, at least six and more likely seven or eight, depending on port coverage.
That’s a big ask for a new, solo, entrant; intruders must find partners or a way to elbow their way into an exiting consortium or vessel sharing agreement. Strangely, they are rarely welcome.
The seabed is littered with the carcases of those who tried and failed. Great Southern Shipping. Asean Sea Lines. BAL Container Line. SYMS. Hainan Pan Ocean. And those who just gave up, or were forced to: RCL, Hanjin, ZIM (several times), Djakarta Lloyd, STX. Doubtless I’ve forgotten a few.
And then there are those swallowed in the never-ending process of consolidations. COSCO absorbed China Shipping Container Line, and then OOCL (so far retaining its identity but increasingly unified). UASC – and soon ZIM – by Hapag-Lloyd. Hamburg Süd by Maersk, having itself acquired Fesco. NYK, MOL and “K” Line became ONE. Further back in history CMA CGM acquired ANL and later USL, Hapag-Lloyd picked up CP Ships, Maersk took P&O Nedlloyd, and so on. All previously active in Asia-Australia trades.
And then there is the signature organic growth of MSC, now with 1,000 container ships in its fleet and thousands of TEU in capacity ahead of all competitors.
What does all this mean for Australia? More on this later.
Meanwhile, the last 12 months has had more ups and downs than a politician’s ironclad guarantee.
Let’s start with a simple comparison: the China Containerized Freight Index (CCFI), as published by the Shanghai Shipping Exchange, reflects average indexed freight rates (all inclusive spot and long-term rates, excluding THC) of 15 different carriers for shipments from Dalian, Fuzhou, Guangzhou, Nanjing, Ningbo, Qingdao, Shanghai, Shenzhen, Tianjin and Xiamen. The overall index (01/01/1998 = 1,000).
For Australia/NZ the June 2025 index stood at 874.73. By June this year it had increased by 44.1% to 1,260.06.
The Ningbo Containerized Freight Index (NCFI), as published by the Ningbo Shipping Exchange, reflects the fluctuation of freight rates of international container shipping market by calculating and recording the container freight rates change information of 21 routes departing from Ningbo-Zhoushan port, including composite Index and 21 Indexes of branch routes. The overall index (03/03/2012 - 09/03/2012 = 1,000),
For Australia/New Zealand, the average rate per FEU had soared 159.3%, from USD 1,127.50 in June 2025 to USD 2,923 in June 2026.
For South-East Asian services, after sticking at plus or minus 3% seemingly forever, the Xeneta index for main ports to main ports suddenly took off towards the end of June this year and at the time of writing was sitting at USD 3,079/FEU, compared to USD 1,654/FEU back in March. Late last year it sat at 2,205/FEU before beginning its steady decline.
DCN sought to put context around these trends and consulted trusted participants, insiders and observers who, as the mainstream press would put it, “have been granted anonymity as they’re not authorised to speak publicly”.
“If you ask me to sum up the North-East Asia and South-East Asia trades over the past 12 months, I'd say one thing first, it's impossible to talk about one without the other anymore. Carriers move capacity to wherever demand is strongest, services are adjusted and what happens in one region quickly flows into the other. The two trades are incredibly interconnected,” one proffered.
“The year really kicked off around last year's Golden Week, followed by the usual lead-up to Chinese New Year. As always, we saw the seasonal rush before factories closed, but instead of settling into a predictable pattern afterwards, the market kept shifting. New services were introduced, carriers adjusted networks and capacity moved around to follow demand. Now we're into Q3 and already looking towards Q4, and the market feels very different again.
“Weather certainly hasn't helped. Typhoons across North Asia, congestion at several key ports and ongoing schedule reliability issues have all contributed to delays throughout the year. Even when the immediate disruption had passed, it often took weeks for vessel schedules and equipment availability to recover.”
Carriers move capacity to wherever demand is strongest, services are adjusted and what happens in one region quickly flows into the other. The two trades (North-East and South-East Asia) are incredibly interconnected.
The Trump tariff announcements added another layer, creating a rush of cargo into the US ahead of implementation dates, he commented. That drove trans-Pacific rates higher and sparked plenty of discussion that vessels and equipment could be pulled from other trades, including Australia. In reality, there was probably more speculation than actual impact on our services, but it certainly kept everyone watching the market a little more closely.
“Looking at forward bookings now, demand appears to be easing and we're already seeing some of the temporary congestion surcharges disappear. As always, the market sets the rate. If there's one takeaway from the past 12 months, it's that uncertainty has become the new normal. The market can turn remarkably quickly, so flexibility and forward planning have never been more important.”
From a prolific shipper, the Australian/Asian trade routings are all suffering from profound weather/geo-political events resulting in serious port congestion and schedule delays /port omissions/vessel changes on a scale not seen for some time.
“It’s a while since we have seen this level of continuous disruption not to mention the odd vessel cutting and running on the Australian coast leaving behind distressed partners and their clients. This might be a particularly long tunnel before we see light given a lot of the port congestion/vessel waiting time is a biproduct of events from February in the Gulf.
“Who would have thought that some lines would bypass Singapore but that is what has been happening. Of course, all these actions are to get back on schedule to provide shippers/importers the promised 'schedule reliability' that is the gold standard they all strive to achieve.”
Maersk sits amongst the top four in all Asia-Australia trades
Liner services connecting South-East Asia with Australia's east coast have remained largely unchanged over the past two years, with the only notable network change being MSC's replacement of the Capricorn service with the Koala service in 2024, several contributors noted.
Despite the relatively stable service structure, capacity across the South-East Asia to Australia trade lane has tightened significantly in recent months. Shipping lines have reported elevated levels of container rollovers at key South-East Asian load ports, reflecting strong demand and limited vessel space, one reported.
The tightening market initially emerged following the US–Iran conflict in late February, which disrupted East–West trade lanes and connecting cargo flows. Since then, market conditions have evolved, driven by increased sourcing activity from South-East and South Asia manufacturing hubs and sustained export demand from the region.
Global sourcing strategies continue to diversify away from China, including to Vietnam, Cambodia and Thailand. As production shifts further into these markets, reliance on intra-Asia shipping networks and South-East Asian transhipment hubs has increased. For example, industry sources highlighted that Singapore is congested with berth delays of up to three days with a large roll pool.
Agreeing with our first observer, he said additional pressure has also resulted from the continued expansion of services via Australia's west coast from South-East Asia hubs, with these networks increasingly handling cargo originating from both South-East Asia and North & East Asia to Fremantle and Port Adelaide.
“Consequently, many carriers are issuing freight quotations subject to vessel space availability. Current market indicators suggest that capacity constraints are likely to persist through Australia's traditional peak shipping season, increasing the risk of further container rollovers and longer lead times.”
Our third analyst suggests the MSC Koala Service coming in from Singapore to Fremantle/Adelaide/Melbourne, then directly to Jakarta/ Shanghai/Hong Kong/Singapore provides some competition to the ASAL direct service into Jakarta “but we hear the congestion at Jakarta is causing some concern within MSC.
“The southbound call (AAX-S) coming into Melbourne as first port continues providing a very poor transit alternative for Melbourne exporters back to Port Kelang/Tanjung Pelepas/Singapore, which we believe is an ongoing issue within the group.
“Happily, for Melbourne exporters Maersk (with a downturn in the NZ export market) have again brought on their seasonal Southern Star service, re-badged ‘Melbourne Star’, for the third year in a row. With eight sailings until early October with competitive transit times back to Singapore 13 days and Tanjung Pelepas 11 days, Victorian exporters would be thinking if only it was transit competitive all year!!”
Embracing our opening theme, the shipper rues the ‘competition’, or lack of it.
Bravery in the shipping business comes in many forms and new entrants into this trade area need loads of it given the tight grip of the current incumbents. So when we heard rumours that PIL and Evergreen were looking at some sort of 'shuttle' service from WA to Asia we were filled with hope of some increased competition. Alas we hear that events in the Gulf have put this firmly on the back burner but then there are rumours that others are showing interest in this part of the world.
Indeed, DCN has been peppered with speculation about proposed new services that have so far failed to eventuate. Amongst the bigger names, such as Evergreen, HMM and Yang Ming, are some newcomers including Unifeeder/DP World Shipping, YM affiliate Interasia Lines, and perennially interested in this region, X-press Feeders.
Turning to North & East Asia, it appears that the A3 loops (ANL/Cosco/OOCL) continue to control approximately 50% + of the market, DCN was told, despite the enhancement by MSC of their Wallaby service and along with A3’s new express service and Maersk’s speed-focused Qilin, both initiated to take advantage of the Southbound surge.
“As the big lines continue to dominate, the smaller lines have a big task in front of them to remain relevant, as the loss and non-replacement of SeaLead in the CA2 consortia indicates.
“We think a change is now taking place in relation to current Northbound marketing by the lines driven by the high freight rates Southbound. They have all been reasonably disciplined in contract and non-contract Northbound pricing in recent years but the imperative now seems to be to get as much equipment back into North Asia/China, with some lines now openly seeking to negotiate for extra volume; interesting to see how long this lasts.”
The shift in southbound rates from both South-East Asia and North & East Asia still has observers mystified, and some carriers’ local offices as well.
“Happiness abounds amongst carriers as rates are at the highest levels for years and yet no one can define ‘why’, other than an earlier peak season,” we were told. “There’s been no mention of angst from importers on the freight increases nor allocation reductions amongst contract shippers.
“This situation also leads to all slots being full of paying cargo, preventing the back loading of empty reefer containers and thus creating shortages for export cargoes back in Australia. Already there are signs that this might be happening.
“Our understanding is that rates will soften a little as we move into August and beyond but this is all relative to the tonnage on the berth. Should that be further disrupted by unexpected events and blank sailings then the current levels around USD 2,200/TEU for smaller carriers and USD 2,600TEU for larger carriers from China could rise again.”
So, space out of Asia is tight, congestion is rife, competition is limited – but shippers are putting up with things? It’s no wonder carriers rule the roost. Let’s move on to the most cynical of our contributors.
“Shipping is supposed to be an open market, but it’s easier to get into the Svalbard [Global] Seed Vault than the North & East Asia-Australia container trade. If the insanely obstructionist regulatory regime doesn’t get you, the oligopolistic market certainly will,” DCN was told.
“We’re a long way from anywhere, so if you’re a shipping line wanting to offer a competitive service to the East Coast, as a minimum, you will need five ships. It is very unlikely you’d risk deploying five vessels to a brand-new trade on your own, so you’ll need partners. In a breathtakingly tight tonnage market, your partners will need to be able to access similarly sized tonnage, all at the same time,” they said.
“Then, you’ll need to enter a 10-12 week, multi-step labyrinthine Governmental registration process, and if Feds and industry bodies deem you worthy, you’ll be permitted entry.
Over the last two years, the top four lines in the North & East Asia-Australia trade have increased their capacity from around 55% to 65% of the total market. Their ability to control the trade is greater now than it has ever been.
“Meanwhile, the incumbent carriers can plot the new entrants’ downfall; adding tonnage, adjusting schedules, deploying extra loaders, ‘closing’ the market and pulling up the drawbridge as they go. Welcome to the trade.
“Good luck if you’re a new shipping line wanting to enter our trade, the odds are stacked against you,” they asserted.
As much as customers have always bemoaned the perceived profiteering of shipping lines, it has normally been the rawest of markets. Freight rates are traditionally determined by only two factors: volume of cargo and volume of capacity: “Lines are like bakers and have to make and sell their bread fresh every day.
“Over the last two years, the top four lines in the North & East Asia-Australia trade have increased their capacity from around 55% to 65% of the total market. Their ability to control the trade is greater now than it has ever been.
“Are we at the tipping point where capacity control is materially affecting freight rates? It’s not at the big four banks, or Coles and Woolies levels, but we’re heading in that direction. The average SCFI rate, across slack season and peak, over the last two years has been around USD 1300/TEU. That’s a million miles above the pre-COVID average. (NB. I don’t have the numbers but I understood the 10-year pre-Covid average was USD 800/TEU in peak and USD 400/TEU in slack).”
“Geopolitical shenanigans have led to a dearth of tonnage, with the Red Sea and Persian Gulf hoovering up effective capacity,” our critic bemoans. “Available tonnage is the most moveable of capital and will find the highest return globally. Of course, the biggest carriers tend to get first dibs on newly off-charter tonnage” and this is tending to perpetuate the concentration, they say, pinpointing another cause of world domination by the Big Four and the consequences for Australian trades and shippers.
The final word goes to our realist:
“To quote the great Midnight Oil ‘the rich get richer and the poor get the picture’.”