Freight rates for Indian exports continue to cool ahead of carriers’ GRI attempts for US services
MUMBAI : Container carriers serving Indian trades are seeing no letup in the erosion of export freight rates amid a slowdown in cargo volumes, according to the latest market analysis.
On the westbound India-Europe trade, average contract rates from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) or Rotterdam (the Netherlands) have dropped to US$950 per 20-foot container and US$1,050 per 40-foot container, from US$1,000 and U$1,100, respectively, at the end of February.
For West India-Genoa (the West Mediterranean) shipments, contract rates have fallen to US$850/20-foot box and US$950/40-foot box, from the February averages of US$1,000/20-foot box and US$1,100/40-foot box.
Eastbound cargo (imports into India) prices for these port pairings have remained steady month-on-month, with the exception of the Mediterranean trade. According to the analysis, rates are hovering at US$1,250/20-foot container and US$1,350/40-foot container for bookings from Felixstowe/Rotterdam to West India. However, rates for shipments from the West Mediterranean (Genoa) to West India have plunged to US$900/20-foot box and US$1,006/40-foot box, from US$1,100 and US$1,306, respectively, in February.
Average short-term contract rates for the India-US East Coast trades have continued to cool, albeit at a slower rate than in the past months ahead of a new round of general rate increases (GRIs) scheduled by major carriers. The analysis shows that rates for shipments from Nhava Sheva/Mundra to New York now stand at US$1,502 per 20-foot box, versus US$1,750, and US$1,970 per 40-foot box, versus US$2,485, and at US$1,373/20-foot container, versus US$1,552, and US$1,741/40-foot box, compared with US$1,997, for container loads moving to the US West Coast (Los Angeles).
For the West India-US Gulf Coast (Houston) trades, rates on average have seen a steeper slide – down to US$1,735 per 20-foot and US$2,735 per 40-foot container, from US$2,635 and US$3,535, respectively, during February.
Major carriers, such as MSC, CMA CGM and Hapag-Lloyd, have announced an average GRI of US$500 per TEU from the end of this month (29 March). It remains to be seen if this push will succeed, even partially, amid ongoing demand challenges.
However, on the US-India trades (return leg), short-term contract rates have seen a 10-20% increase, on average, from the levels maintained by major operators last month.
According to the CN analysis, rates have now climbed to US$908/20-foot box, from US$805, and US$1,125/40-foot box, from US$1,025, for shipments from USEC (New York); to US$2,509/20-foot box, versus US$2,409, and US$ 3,243/40-foot box, versus US$3,043, for bookings from USWC (Los Angeles); and to US$1,870/20-foot and US$2,093/40-foot box from the US Gulf Coast, compared with US$1,670 and US$1,643 a month earlier, into West India (Nhava Sheva/Mundra).
Rates on intra-Asia trades out of India have dropped measurably month on month, the CN analysis shows. For West India-Yantian (South China), rates are now at US$200/20-foot box and US$300/40-foot container, down from US$240 and US$364, respectively, and for West India-Central China (Shanghai) trades, rates have crashed to US$50/20-foot box and US$70/40-foot, from US$75 and US$100, respectively, a month ago.
Average contract rates for bookings from West India (Nhava Sheva/JNPT or Mundra) to Tianjin (North China) have dipped to US$90 per 20-foot container, from US$100, and US$180/40-foot box, from US$200.
For Indian cargo to Singapore, rates have remained unchanged at US$25/20-foot and US$50/40-foot container, month on month.
For Indian shipments to Hong Kong, major carriers are accepting bookings at US$50/20-foot container, versus US$75, and US$70/40-foot container, versus US$100, according to the CN analysis.
March rates for West India-Jebel Ali/Dubai movement have risen to US$100/20-foot container and US$250/40-foot box, from US$75 and US$200, respectively, at the end of February.
Contract rate levels on intra-Asia return leg trades have either seen no changes or have increased slightly for some port pairs, notably from Shanghai and Tianjin, the CN analysis found.
Meanwhile, Indian merchandise exports, by value, declined for the third month in a row in February, down 8.8% year-over-year, according to government data. Still, industry leaders are hopeful about respectable growth in export trade for fiscal year 2022-23, which ends on 31 March.
“India is not only one of the fastest growing economies, but also one of the top performing nations in exports as well,” said A Sakthivel, President of the Federation of Indian Export Organisations (FIEO), in a statement.
Sakthivel added that “The latest figures assume greater significance when seen in the backdrop of global headwinds accentuated by geopolitical uncertainties, rising inflation, contraction in demand and high interest rates.
He went on to point out, “Many countries have shown sharp declines in their exports recently.”
Source : Container News