Freight rate surge shocks Indian importers on Asia routes
NEW DELHI : Indian importers sourcing goods from Asia, especially from China, are facing a steep hike in container freight rates, underscoring the ongoing volatility in the shipping market.
Market data reveals that spot rates on intra-Asia-India trade lanes have surged more than twofold in the past month. For instance, freight charges for shipments from Shanghai to Nhava Sheva have risen sharply, with rates now at $1,600 per TEU (twenty-foot equivalent unit) and $1,900 per FEU (forty-foot equivalent unit), compared to $800 and $900, respectively, a month ago.
This sharp increase poses additional cost pressures for importers, amplifying supply chain challenges. Indian importers are grappling with sharply rising freight costs for goods from Asia, as container rates continue to surge amid volatile market conditions.
Rates from key Asian ports to India have climbed dramatically. Singapore-to-Nhava Sheva shipments are now priced at $1,250 per TEU and $1,550 per FEU, compared to mid-October averages of $700 and $1,000. Similarly, Hong Kong-to-Nhava Sheva bookings have doubled, reaching $1,600 per TEU and $1,900 per FEU, up from late-October levels.
These rate hikes highlight the intensified cost pressures across intra-Asia-India trade lanes, further complicating supply chain logistics for importers. Industry sources report a significant capacity crunch in the Asia-India trade lane over the past two weeks. This comes after several regional and mainline carriers, which had temporarily increased capacity to benefit from the earlier surge in China’s exports, redirected their vessels to other routes. Some of these ships have been reassigned to Red Sea and Mediterranean trades, further straining availability.
Adding to the concerns, CMA CGM has informed Indian customers about three scheduled blank sailings on its AS9 (Asia-Subcontinent Express) service in December. The affected sailings include the Zhong Gu Nan Ning, ONE Matrix, and TS Keelung.
In an advisory, CMA CGM (India) stated, “Customers are requested to plan their shipments accordingly,” further underscoring the growing challenges for importers navigating the tightening capacity on Asia-India routes.
Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO), said that, “Such an impressive double-digit growth in merchandise exports, amidst continuing global economic uncertainties, is definitely an encouraging sign of revival”.
The surge in Indian apparel exports may, to some extent, be attributed to the challenges currently disrupting Bangladesh’s garment industry, according to industry sources. This shift appears to have provided an opportunity for Indian exporters to bolster their performance in the global market.