MUMBAI : While carrier pricing across major routes has begun to show some signs of softening after hitting stratospheric levels over the past year, there is an outlier: the India-US trade.
According to market research, contract rates for India-US cargo have moved higher this month from the levels seen at the end of March.
Average rates for shipments from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have seen a 20 percent rise, now hovering at about $10,100 per TEU and $12,700 per FEU, up from $8,500 and $10,700, respectively, last month.
For cargo bound for the US West Coast, the increase has been even higher, averaging 30 percent, thus pushing port-to-port rates from Nhava Sheva/Mundra to Los Angeles to about $11,750 per TEU and $14,800 per FEU, from $9,150 and $11,500 during March.
Indian cargo bookings to the US Gulf Coast (Houston) are now being made at about $10,900 per TEU and $13,700 per FEU, climbing approximately between 17 and 18 percent from the average March levels of $9,300 and $11,700, respectively.
April contract rates on the return leg, however, have seen no changes from the prior month — at $950 per TEU and $1,350 per FEU port-to-port from the USEC, at $2,350 and $2,900 from the USWC, and at $1,600 and $1,650 from the Gulf to West India.
Spot rates are generally up between $500 and $1,000 per container, varying from carrier to carrier, sources noted.
While sustained demand is a factor, industry sources say carriers are playing a “cherry picking” policy while signing contracts with shippers or forwarders, meaning prioritizing the ones that they see as more lucrative partners. “It is more about the leverage carriers have over forwarders and [beneficial cargo owners] vis-à-vis new Asia-US contract volume caps in general,” Daniel Krassenstein, global supply chain director of US-based industrial packaging manufacturer Procon Pacific said.
Rates steady on India-Europe
On India-Europe trades, export-import contract rates have remained steady month on month. The JOC analysis pegs average westbound prices from West India to London Gateway at $7,800 per TEU and $8,150 per FEU, while for Rotterdam, those stand at $7,400 and $7,500, respectively. Eastbound shipments on these port pairs are moving at $1,950 and $2,050, on average.
Intra-Asia rates — in both directions — have softened, suggesting a market correction in the offing amid the capacity added by new connections. From West India to South China (Yantian), rates have slid to $500 per TEU, from $700, and to $750 per FEU, from $1,050. For Shanghai, Indian shipments are moving at $400 and $600, respectively, down from $550 and $850. On the reverse direction, TEU/FEU rates currently stand at $2,000 and $3,800 for South China-West India, versus $2,300 and $4,400 in March. Rates are now at $2,200 and $4,000, compared with $2,800 and $4,800 a month ago for Central China-West India connections.
Besides a moderating demand outlook, industry sources say better planning efforts from shippers and carriers have contributed to the supply/demand balance on some trades. But a stabilization at the current levels will present no normalization for cargo owners, already battered by historical rate hikes.