Freight rates on Indian trades move up amid Suez Canal routing disruptions
MUMBAI : After a long streak of declining trends, container freight rates on major trades out of India have begun to rise amid carrier routing disruptions through the Suez Canal, according to the latest market analysis.
On the westbound India-Europe trade, average short-term contract rates from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) or Rotterdam (the Netherlands) have risen to US$600 per 20-foot container and US$650 per 40-foot container, from US$450 per 20-foot container and US$550 per 40-foot container at the end of November.
For West India-Genoa (the West Mediterranean) bookings, December contract rates have swelled to US$750/TEU, from US$425, and US$700/FEU, from US$550, the analysis shows.
Similarly, eastbound cargo (imports into India) rates for these port pairings have jumped measurably from end-November averages to US$800/TEU and US$950/FEU, from US$650 and US$700, respectively, for bookings from Felixstowe/London Gateway to West India, and to US$850/TEU and US$1,050/FEU, from US$750 and US$850, for shipments from Rotterdam to West India.
For trades from the West Mediterranean (Genoa) to West India, December rates stand at US$500/TEU, up from US$450, with FEU rates remaining steady at US$650/FEU.
Short-term contract prices on the India-US trades have also increased sharply from end-November levels. Average rates in December for shipments from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have hit US$1,500/TEU, from US$1,350, and to US$1,900/FEU, from US$1,550/FEU in November. For Indian container loads moving to the US West Coast (Los Angeles), rates are up to US$1,600/TEU and US$1,900/FEU, from US$1,250/TEU and US$1,550/FEU, respectively, reported last month.
For the West India-US Gulf Coast (Houston) trades, TEU rates have seen a further recovery month-on-month – up to US$1,950/TEU, from US$1,850, and US$2,450/FEU, from US$2,350/FEU, according to the CN analysis.
Short-term contract rates on the US-India trades (return leg) have mostly held firm, except for loads from the US West Coast. December average rates stand at US$375/TEU and US$450/FEU for shipments from the US East Coast to West India and at US$1,100/TEU, up from US$950, and US$1,300/FEU, up from US$1,100/FEU, for US West Coast-West India bookings.
December average rates from the US Gulf Coast to West India have seen no changes, month-on-month, hovering at US$700/TEU and US$1,350/FEU.
Carrier contract rates on intra-Asia trades out of India have seen noticeable increases on certain port pairings, month-on-month, the analysis found. For West India-Yantian (South China), the analysis has put average rates at US$100/TEU and US$200/FEU, up from US$75 and US$150, respectively, while for West India-Tianjin (North China), rates have trended up with carriers quoting US$50/TEU and US$100/FEU, compared with US$35 and US$75, respectively, last month.
For West India-Shanghai (Central China) trades, December rates have continued to be in negative territory, at US$5/TEU and US$10/FEU.
Also, for West India loads to Singapore and Hong Kong, carriers are accepting bookings at as low as US$5/TEU and US$10/FEU.
However, carriers have been able to push rates higher on the West India-Jebel Ali (Dubai) trade -– with December averages reported at US$50/TEU and US$140/FEU, up from US$5/TEU and US$15/FEU.
Meanwhile, Indian export industry stakeholders are anticipating new growth challenges because of supply chain disruptions and associated logistics cost increases, after seeing some encouraging demand signs in recent months.
India’s merchandise export trade by value for October edged down 2.8% year-over-year, a moderate decline from the steep setbacks seen earlier this month, according to the latest government data.
“The softening of the commodities prices from the elevated level in 2022 also contributed to the decline,” Dr. A Sakthivel, President of the Federation of Indian Export Organisations (FIEO), said in a statement.
Dr. Sakthivel, however, further noted: “Almost all countries exports are exhibiting a declining trend, with many witnessing double-digit dips.”
According to FIEO, “The need of the hour is to provide much needed momentum to exports sector through easy and low cost of credit, along with marketing support besides interest equalization to the all sectors of export.”
Dr. Sakthivel further went on to add: “A strategy should be chalked out for promotion of all the labour-intensive sectors of exports in consultation with the key stakeholders of the trade.”
However, the FIEO Chief struck an optimistic tone about the export outlook, noting that annual exports for fiscal 2023-24 would surpass the performance reported last year (2022-23).