Intra-Asia Freight Rates End Six-Week Slide: IACI Rises to USD 970/FEU as Emergency Fuel Surcharges of USD 38–75/TEU Emerge on Short-Haul Trades

Drewry’s Intra-Asia Container Index (IACI) increased 1% to USD 970/FEU in the week ending August 6, 2026, bringing an end to six consecutive weeks of declines.

However, the modest increase in the composite index does not fully capture the divergent developments across the market. Freight rates from China to South Asia and the Gulf have risen significantly amid tensions in the Strait of Hormuz, while rates on several Southeast Asian and Northeast Asian routes have fallen sharply as port congestion eases.

Notably, carriers have also begun imposing Emergency Fuel Surcharges (EFS) on selected intra-Asia routes. On short-haul trades where base freight rates may be only tens or a few hundred dollars per FEU, a surcharge calculated on a per-TEU basis can have a meaningful impact on total transportation costs.

Key Takeaways

●    The IACI reached USD 970/FEU in the week ending August 6, up 1% week on week and ending a six-week consecutive decline, according to Drewry.

●    The market is clearly divided: Shanghai–Nhava Sheva increased 8% to USD 1,767/FEU, while Shanghai–Jebel Ali rose 7% to USD 7,143/FEU. In contrast, Shanghai–Laem Chabang plunged 23% to USD 687/FEU and Shanghai–Kaohsiung fell 7% to USD 1,333/FEU.

●    Ho Chi Minh City–Shanghai remained unchanged at USD 65/FEU for a second consecutive week, according to Drewry. Meanwhile, Phaata’s Ho Chi Minh City–China index stood at USD 102/FEU on August 7, down 11.57%.

●    Carriers have begun imposing EFS of USD 38–75/TEU on selected intra-Asia routes. CMA CGM introduced a USD 75/TEU surcharge for dry containers from August 1, while ONE will apply USD 38/TEU to dry containers on short-sea routes from August 15.

●    Intra-Asia service networks continue to be reshaped. PIL will launch its Indonesia Thailand Service (ITS) from September 5, while SITC is restructuring three services connecting China, Vietnam and East Malaysia.

IACI Edges Higher, but the Intra-Asia Market Is Increasingly Fragmented

The 1% increase in the IACI to USD 970/FEU in the week ending August 6 does not represent a uniform trend across the market.

Drewry recorded rate increases on most of the routes it tracks, while Shanghai–Kaohsiung and Shanghai–Laem Chabang were the two trades to record significant declines.

On the western side of the region, tensions in the Gulf continue to put upward pressure on transportation costs. Shanghai–Nhava Sheva rates increased 8% to USD 1,767/FEU, while Shanghai–Jebel Ali rose 7% to USD 7,143/FEU. 

Notably, Jebel Ali rates had already increased 6% the previous week, marking the second consecutive week of gains.

By contrast, rates on several Southeast Asian and Northeast Asian routes declined sharply as port congestion eased.

Shanghai–Laem Chabang rates fell 23% to USD 687/FEU, while Shanghai–Kaohsiung declined 7% to USD 1,333/FEU. According to Drewry, average vessel waiting time at Laem Chabang fell from 15.33 hours to 11.6 hours in Week 31. At Kaohsiung, waiting time dropped from 14.78 hours to 7.32 hours.

As vessel waiting times at ports decline, vessel turnaround improves and effective shipping capacity is released. This is one of the factors contributing to lower freight rates on these trades.

Meanwhile, operations at Shanghai faced pressure in the opposite direction. Average vessel waiting time increased from 77 hours to 94.8 hours in Week 31, as southern and eastern China were affected by Typhoons Noul and Bavi.

Vietnam–China Freight Rates Continue to Diverge

For cargo originating in Vietnam, Ho Chi Minh City–Shanghai rates remained unchanged at USD 65/FEU, marking the second consecutive week without a change.

It is important to note, however, that this is the rate for a specific port pair under Drewry’s methodology. The IACI also excludes Terminal Handling Charges (THC) at both origin and destination.

Meanwhile, Phaata’s August 7 data showed that its Ho Chi Minh City–China index, calculated across multiple destination ports in China, stood at USD 102/FEU, down 11.57%.

The two figures reflect different measurement scopes and can therefore be used as complementary indicators: freight rates on the Ho Chi Minh City–Shanghai port pair remained flat, while the broader Vietnam–China trade continued to face downward pressure.

EFS Begins to Have a Direct Impact on Transportation Costs

One of the most notable developments during the week was not the movement of freight indices, but the introduction of Emergency Fuel Surcharges (EFS).

According to Drewry, carriers have begun applying EFS of USD 38–75/TEU on selected short-haul routes in the region as tensions in the Strait of Hormuz push up fuel costs.

CMA CGM is applying an EFS of USD 75/TEU for dry containers and USD 90/TEU for reefer containers on intra-regional services, effective August 1, 2026, and calculated based on the cargo loading date.

Meanwhile, ONE has announced an EFS of USD 38/TEU for dry containers and USD 50/TEU for reefer containers on short-sea services, effective August 15, 2026.

Therefore, the USD 38–75/TEU range represents the difference between carriers’ surcharge levels, rather than a range within a single carrier’s tariff.

There are three points to consider when assessing the impact of EFS.

First, EFS is calculated per TEU, while the IACI is expressed per FEU. These are different units and cannot simply be added together.

Second, EFS falls outside the scope of the IACI calculation. Therefore, a trade where the freight index is flat or declining may still see an increase in total transportation costs because of the additional surcharge.

Third, both CMA CGM and ONE state that the surcharge will remain in effect “until further notice,” meaning no specific end date has been announced.

Fuel costs are an important factor behind the move. In its late-July assessment, Drewry said WTI crude oil prices in July 2026 increased 24% from the previous month to approximately USD 84 per barrel.

Intra-Asia Service Networks Continue to Be Reshaped

Alongside freight-rate movements, carriers are also adjusting their regional service networks, potentially affecting vessel schedules and routing options for Vietnamese shippers.

PIL has announced the launch of its Indonesia Thailand Service (ITS), with the first sailing scheduled to depart Port Klang on September 5, 2026. The service will operate with three vessels and connect six ports across four countries.

The rotation is:

Port Klang – Singapore – Laem Chabang – Bangkok – Laem Chabang – Singapore – Port Klang – Semarang – Surabaya – Port Klang.

Tonnie Lim, Commercial Director at PIL, said the new service “expands PIL’s coverage across Asia and improves transit times for customers.”

According to Drewry, PIL will join OOCL and Gold Star Line on the existing ITS service, replacing Yang Ming after the carrier withdrew from the cooperation. However, this information has so far been reported only by Drewry and has not been publicly confirmed by the parties involved.

SITC Restructures China–Vietnam–East Malaysia Services

More relevant to Vietnamese cargo is SITC’s restructuring of three services connecting China, Vietnam and East Malaysia.

Under the revised network, Qinzhou will be added to the CVM service while being removed from CVM2. Ho Chi Minh City and Bintulu will be shifted to the CMI2 service.

The three new rotations are:

●    CVM: Nansha – Shenzhen (Shekou) – Ho Chi Minh City – Batam – Kuching – Phuoc An – Qinzhou – Nansha.

●    CVM2: Nansha – Shenzhen (Shekou) – Kota Kinabalu – Muara – Nansha.

●    CMI2: Yangpu – Qinzhou – Phuoc An – Jakarta – Bintulu – Ho Chi Minh City – Yangpu.

For Vietnamese ports, Ho Chi Minh City and Phuoc An will continue to appear on both the CVM and CMI2 services. 

This maintains connectivity options, but also changes the port rotation and transit times to individual markets.

The End of the Decline Does Not Necessarily Mean a Reversal

At USD 970/FEU, the IACI remains approximately 12.9% below its peak of USD 1,114/FEU recorded in the third week of June 2026.

In other words, this week’s increase indicates that the prolonged decline has paused, but it is not yet sufficient to conclude that the market has entered a new upward cycle.

Drewry expects intra-Asia freight rates to remain relatively stable over the coming weeks. According to the research firm, the impact of higher fuel costs could be partly offset by weaker demand following the peak season.

However, risks remain on both sides. Any further escalation in the region could disrupt operations and create additional upward pressure on freight rates.

According to Phaata, Vietnamese shippers should look beyond movements in the IACI during August and focus on the overall structure of transportation costs.

Freight rates on several major China-bound routes are flat or declining, but EFS is being added on a per-TEU basis and currently has no specified end date. For shipments moving on short-haul routes with low base freight rates, the surcharge can account for a significant share of total transportation costs.

Therefore, when preparing transportation budgets for the coming quarter, companies should not monitor base freight rates alone. They should assess freight rates, EFS and other applicable surcharges together.

Recommendations for Importers and Exporters

●    Assess transportation costs on an all-in basis rather than focusing solely on base freight rates. On short-haul routes with low freight levels, an EFS of USD 38–75/TEU can create a significant difference between transportation options. Companies should ask service providers to break out the base freight rate and each applicable surcharge before making a decision.

●    Confirm the cargo loading date when calculating EFS. CMA CGM applies the surcharge based on the cargo loading date from August 1, while ONE will apply it from August 15. Therefore, a shipment booked before the effective date may still incur the surcharge if the cargo is actually loaded after that date.

●    For cargo to South Asia and the Gulf, prioritize capacity reliability. Shanghai–Nhava Sheva and Shanghai–Jebel Ali rates have increased consecutively, primarily due to geopolitical factors. In the short term, there is no clear basis for expecting rates to fall rapidly.

●    For cargo to Thailand and Taiwan, take advantage of the room for negotiation. Shanghai–Laem Chabang rates fell 23% in one week as port congestion improved, creating additional room for companies to renegotiate freight rates or contract terms for the coming quarter.

Recommendations for Logistics Providers

●    Update intra-Asia rate sheets weekly rather than monthly. The divergence between trades within the same week is substantial, ranging from a 23% decline to an 8% increase, meaning monthly rate updates can quickly become uncompetitive.

●    Prepare a clear explanation of EFS for customers. When customers question why freight indices remain flat while total costs increase, logistics providers should clarify three factors: EFS is calculated per TEU, IACI is calculated per FEU, and IACI excludes THC.

●    Review vessel schedules on East Malaysia and Indonesia services. SITC’s network restructuring and PIL’s launch of the ITS service from September 5 will provide additional options, but may also change transit times and port rotations.

●    For customers using Phuoc An Port, verify the actual vessel schedule. Following the restructuring, Phuoc An will appear on both the CVM and CMI2 services. Logistics providers should confirm the specific sailing schedule before committing to transit times with customers.

Frequently Asked Questions

What is the IACI and which trades does it cover?

The IACI is Drewry’s spot container freight-rate index for intra-Asia trades. It consists of 18 individual trade lanes and a composite index, updated weekly since January 2, 2026.

IACI rates are expressed in USD/FEU and exclude Terminal Handling Charges (THC) at both origin and destination. The 18 tracked trades include two directly related to Vietnam: Ho Chi Minh City–Shanghai and Shanghai–Ho Chi Minh City.

How does the USD 38–75/TEU Emergency Fuel Surcharge apply to my cargo?

The applicable surcharge depends on the carrier and how the carrier classifies the specific trade.

CMA CGM has announced an EFS of USD 75/TEU for dry containers and USD 90/TEU for reefer containers on intra-regional services from August 1, 2026. ONE has announced USD 38/TEU for dry containers and USD 50/TEU for reefer containers on short-sea services from August 15, 2026.

As the carriers have not published detailed conversion tables for every individual port pair within the information referenced above, companies should confirm the applicable EFS for their specific trade directly with the carrier or forwarder.

Will intra-Asia freight rates continue to rise or fall in the coming weeks?

Drewry expects intra-Asia freight rates to remain relatively stable in the near term, as the impact of higher fuel costs may be offset by weaker demand following the peak season.

The 1% increase this week merely ended six consecutive weeks of declines and is not yet a strong enough signal to confirm a reversal in the market trend. At USD 970/FEU, the IACI remains approximately 12.9% below its peak of USD 1,114/FEU recorded in the third week of June 2026.

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Source: Phaata -  Where Shippers & Logistics Providers Connect

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