Maersk raises freight rates to US, Canada from India and West Asia

COPENHAGEN : Maersk has announced a rate increase of $1,000 per container to the US and Canada ports from March 2. The increase is applicable to cargo originating from India and West Asia, and for all types of cargo, according to a trade notice issued by the line.

The steep increase will impact shippers, who are already facing delays in their cargo reaching destinations in the US due to the Red Sea crisis, which started on October 19, 2023.

Industry sources say other shipping lines may follow suit as the detour via the Cape of Good Hope on the southern tip of Africa means a 15 days’ delay in reaching their destination from Asia to Europe, and further to the US.

Usually, the rate increase would be different for boxes of different sizes – a 20 ft or for a 40 ft. However, Maersk has said the rate would be the same for all types, an official of a large freight forwarding company said.

Freight charges for a 20-ft container to the US today costs around $4,200. For suppliers that work on ‘free on board’ (FOB) basis, the rate increase has been eliminated in delivery of goods. In FOB, freight charges are negotiated in India, and it is the buyer’s responsibility to pay. However, the risk is higher while sending goods on cost, insurance, and freight (CIF) basis, where the supplier takes on the cost of shipping, and insurance. Any increase in rate has to be borne by the supplier, said a source.

The Red Sea is critical for maritime trade, especially the movement of goods between Asia and Europe. The canal handles nearly 12 per cent of global trade.