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Indian exporters see fresh GRI notices after brief market stability signals

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NEW DELHI : After a brief period of calm that has seen some sort of freight rate stability, container carriers have begun to hit the Indian market with fresh general rate increases (GRI) in anticipation of the peak season demand.

For Indian shipments to the United States and San Juan in Puerto Rico, rates will increase by US$1,500 per box from 4 July. This will be on top of a peak season surcharge (PSS) of US$500 from the same date for Indian containers moving to the US and San Juan, according to a new customer advisory issued by Mediterranean Shipping Co. (MSC).

“In order to maintain the high level of reliability and efficiency of our services to meet the needs of our customers, MSC will apply PSS effective 4 July 2022 handover, ex-India to the US and San Juan, Puerto Rico,” MSC (India) said.

Industry sources expect vessel space and equipment availability on major trades out of India to become tighter with the peak shipping period setting in and China releasing more volumes in the wake of Covid restrictions easing.

However, carrier officials have noted continual efforts to meet strong export demand from India.

“During the year 2021, the shipping lines repositioned 1.85 million TEU of empty containers from global origins into the country to help improve the availability of containers for exports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (CSLA), said in a statement.

“In the same year, the shipping lines also introduced new services from India which increased the capacity from India to global destinations (including the US) by approximately 33-35,000 TEU a week, thereby improving the space situation of the vessels to that extent. Both these efforts continue in 2022 as well although it is hoped that the infrastructural and operational bottlenecks in the US will be eased by then, which have so far contributed to the congestion.”

Sylvester D’mello, director of operations at digital forwarder Freightwalla, echoed the view that rate levels had become more stable in recent weeks, though they continued to remain way above pre-pandemic averages.

“The freight index around the world is now pointing at the lower end,” D’mello noted.

He went on to explain, “There could be more than one reason for the declining freight rates. Lockdowns at Chinese ports have begun to cease, and the unwinding of ports’ congestion and ease of pressure for space also plays a part in driving down the spot rates. Weakness in rates is also seen in the Asia-West Coast route, reflecting the previous speculation on freight rates.”

Indian port volumes continue to see steady growth, as total container throughput (major/minor ports combined) last month increased to 1.66 million TEU from 1.6 million TEU a year earlier.

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