Micky Mellon's side produced their best league performance at the Greenhous Meadow for many weeks as they retained the tempo from Saturday's dramatic Cup win against Sheffield Wednesday.
But despite dominating the game and creating numerous chances, they suffered a 10th home league defeat of the season as Southend hit them twice on the break through Will Atkinson on 24 minutes and Stephen Hendrie 11 minutes from time.
Andy Mangan gave Town the ideal start to the second half but Salop couldn't find a way through the Shrimpers' defence and highly-ratyed keeper Daniel Bentley.
Sunday's clash at relegation rivals Fleetwood now takes on even more significance.
Shrewsbury Town (3-5-2): Leutwiler 7; Smith 7, Whitbread 8 (Vernon 81), Knight-Percival 7; Grimmer 8, Wallace 6 (WHALLEY 33, 8), Wellens 7, Black 7, Brown 7; Akpa Akpro 7, Mangan 7.
Subs not used: Sadler, Vassell, Ogogo, Clark, Halstead (gk).
Southend (5-3-2): Bentley; O'Neill, Bolger, Barrett, Thompson, Hendrie; Atkinson, Payne (McQueen 68), Leonard; Mooney (Loza 67), Hunt (Timlin 49).
Subs not used: Worrall, Hurst, Kamara, T Smith (gk).
Referee: Christopher Sarginson (Staffs).
Town were the better side in the first half and were deservedly applauded off at the break, but they had nothing to show for it as they trailed to Atkinson's opener which came against the run of play.
In an open game played at a high tempo, Shrewsbury started on the front foot and had several chances to take the lead.
But it was Southend who threatened first when Ryan Leonard was allowed to surge from halfway to the edge of the box then curl a shot straight at Jayson Leutwiler.
Town hit back and from James Wallace's corner, Jean-Louis Akpa Akpro's far-post header lacked power and was held by keeper Daniel Bentley.
Salop were having some joy from set-pieces and from another Wallace corner Akpa Akpro's shot was blocked after Whitbread headed it on.
Town missed a golden chance to take the lead in the 21st minute when Andy Mangan flicked the ball on to put Wallace clean through, but he could only slice wide from just inside the box.
And Shrewsbury were made to pay heavily for the miss when Southend took the lead in the next attack against the run of play.
Will Atkinson's curling shot seemed to go through Leutwiler right down the centre of the goal after Jack Payne was tackled by Ian Black.
Town tried to hit back and Zak Whitbread's header was blocked by Bentley from point-blank range after Knight-Percival crossed.
But the Shrimpers remained a threat on the break and a minute after the half hour mark, Stephen Hendrie's low left-foot drive whistled just past Leutwiler's right-hand post after Town half cleared a cross.
Town were forced into an early change in the 33rd minute when Wallace, who had been struggling with a knock for a few minutes, was replaced by Shaun Whalley.
And although Black thumped a rising left foot drive a yard over the bar from 25 yards from Jack Grimmer's pull back, Town were a fraction away from conceding a second goal five minutes from the break.
It was all their own doing too as Nathaniel Knight-Percival gaves the ball away to David Mooney and Payne's deflected 25-yarder hit the base of the post, his rebound sailing inches over.
Southend threatened again on 43 minutes when Hendrie's flick-up-and-volley was tipped away by Leutwiler after Whitbread headed away a cross.
But again Town responded and Whalley got to Junior Brown's cross first at the near post but could only steer it wide.
Southend continued to exploit Town's struggle to close down quickly enough and Ryan Leonard's rising drive was tipped upwards by Leutwiler.
Town had the perfect start to the second half when they equalised, but despite taking the game to the Shrimpers, they struggled to build on it.
Mangan scuffed home for his third goal in six games since returning to the club after Whitbread headed on Black's free kick then Akpa Akpro won it deep in the area.
Shrewsbury continued to look for a second goal, though their threat was mainly from set-pieces as they struggled to open up a determined Southend rearguard in open play.
Knight-Percival had the next chance, his shot from Whalley's corner saved on the line by Bentley before Adam Thompson blocked his follow-up.
Then Jack Grimmer's low cross flew right across the box with Akpa Akpro and Mangan unable to apply the finishing touch.
Town were handed what appeared to be a helping hand in the 65th minute when substitute Michael Timlin - who only came on in the 50th minute - was sent off for a second bookable offence after catching Grimmer very late. He'd earlier been booked for clashing with Black.
From the resulting free kick swung in by Black, the ball dropped for Knight-Percival, but he could only hook it well over.
Town continued to force the pace and attack and on 71 minutes, a superb show of pace from Akpa Akpro saw him outrun a defender from Wellens's chip but his angled shot was held by Bentley.
Back came Shrewsbury again on 77 but Whalley's shot was smothered by Bentley after Wellens's effort was blocked.
And Town were made to pay for their wastefulness in front of goal as Southend again hit them on the break in clinical faashion.
This time Hendrie got between Whitbread and Knight-Percival at the far post to fire into the roof of the net from sub Jamar Loza's cross.
Town tried to hit back again and they piled forward in search of a second equaliser.
But the final ball wasn't good enough and their final sniff of goal saw Whalley drive at the defence and shoot but Thompson slid in to block.
It was unfortunate on the home side who were much improved on their recent league performances at the Meadow, but again lefty empty-handed.

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