Soaring demand is allowing container lines serving Indian trades to flex their pricing muscles on intra-Asia services, especially out of China.
Container freight rates on trades out of India have begun to rebound after recent downward corrections from the Red Sea crisis-linked highs, according to an analysis of market data for June by Container News.
Simply put, intra-Asia rates into India have generally seen increases of 200% to 250% over the past month, data from market sources reveals.And vessel capacity remains acutely tight, because of fewer sailings and schedule disruptions, often causing cargo rollovers for Indian importers, according to shipper sources
Average spot rates from North China (Tianjin) to West India (Nhava Sheva or Mundra) have exceeded $5,000 for a 40ft container booking, according to market sources.
The rate push is not just for Chinese ports alone. Prices for India-bound shipments from other Far East locations, such as Singapore, Port Klang and Hong Kong have rocketed.
On the westbound India-Europe trade, average short-term contract rates for bookings from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) in April have climbed to US$3,100 per 20-foot container and US$3,200 per 40-foot container, from US$2,700 and US$2,500, respectively, at the end of May.
For Indian loads to Rotterdam (the Netherlands), June rates have stood at US$3,100 per 20-foot container and US$3,200 per 40-foot container, up from US$2,750 and US$2,550 in May.
For West India-Genoa (the West Mediterranean) bookings, rates have risen to US$3,300/TEU, from US$2,700, and US$3,400/FEU, from US$2,800, the CN analysis shows.
Similarly, eastbound cargo (imports into India) rates for these port pairings have also seen gains from end-May averages, to US$1,350/TEU and US$1,550/FEU, from US$1,250 and US$1,400, respectively, for bookings from Felixstowe/London Gateway to West India, while for shipments from Rotterdam to West India, rates have ticked up to US$950/TEU and US$1,400/FEU, from US$850 and US$1,300/FEU, respectively.
For Indian loads to Rotterdam (the Netherlands), June rates have stood at US$3,100 per 20-foot container and US$3,200 per 40-foot container, up from US$2,750 and US$2,550 in May
For trades from the West Mediterranean (Genoa) to West India, June rates have seen no changes month-on-month, at US$800/TEU and US$1,400/FEU.
Short-term contract prices on the India-US East Coast trades have also remained somewhat steady through July. Average rates in June for shipments from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have stood at US$2,100/TEU and US$2,300/FEU. For Indian container loads moving to the US West Coast (Los Angeles), container rates have moved higher in June, to US$2,700/TEU, from US$2,500, and to US$3,000 per FEU, from US$2,900 reported at the end of May.
However, for the West India-US Gulf Coast (Houston) trades, May rates have continued to drop, down to US$3,300/TEU and US$3,600/FEU, from US$3,500 and US$4,000, respectively, at the end of May, according to the CN analysis.
Short-term contract rates on the US East Coast-West India trades (return leg) have held firm month-on-month, hovering at US$550/TEU and US$800/FEU. From the US West Coast to West India, booking rates have soared to US$2,000/TEU and US$2,300/TEU, from US$1,300 and US$1,500, respectively, in late May.
Average rates from the US Gulf Coast to West India have also seen no changes from April averages – hovering at US$1,300/TEU and US$2,050/FEU.
Carrier contract rates on intra-Asia trades out of India have continued to be in negative territory, on some port pairings, the CN analysis found. For West India-Yantian (South China), the analysis put average rates in April at US$25/TEU and US$35/FEU, and for West India-Tianjin (North China), carriers are accepting bookings at as low as US$5/TEU and US$10/FEU.
For West India-Shanghai (Central China) trades, rates have also remained in negative territory, at as low as US$5 per TEU or FEU.
Also, for West India loads to Singapore, carriers are also accepting bookings at as low as US$5/TEU or FEU.
June rates for West India-Jebel Ali (Dubai) bookings have ticked up to US$250/TEU, from US$200, and US$300/FEU, from US$250.
Meanwhile, despite multiple challenges, India’s merchandise export trade has continued to be on a positive note in the new fiscal year 2024-25, which began in April. According to provisional government data, exports by value were up 9% year-over-year to US$38.13 billion.
“The positive growth momentum for the second month in a row during 2024-25 on the back of buoyant order bookings goes to show the resilience of the exports sector and Indian exporting community,” Ashwani Kumar, president of the Federation of Indian Export Organisations (FIEO) said in a statement.
Kumar also noted: “The ongoing Russia-Ukraine war coupled with various major geo political tensions including the Red Sea crisis and Israel-Hamas conflict has also made the international trade scenario much tougher for the Indian exporters.”
He went on to explain: “We further expect exports to show better growth numbers with improved demand coming in from the European Union, the UK, West Asia and the US, which has given boost to the order bookings by over 10 % and has come as a sign of recovery for labour-intensive sectors of exports.”
Kumar also added: “Our exports in all our top ten markets (the US, UAE, the Netherlands, the UK, China, Singapore, Saudi Arabia, Bangladesh, Germany and France) were positive and many of them recorded a healthy double-digit growth.”
According to FIEO: “The need of the hour is to take steps on the liquidity front with deeper interest subvention support and continuation of interest equalisation scheme.”
The association also appealed: “The sector also needs easy and low cost of credit, marketing support, besides conclusion of some of the key free trade agreements with the UK, Peru and Oman soon.”
Sources : Container News + other sources
