With the exception of trades to the United States, container carriers operating out of India have continued to face further significant freight rate declines this month, according to the latest market analysis by Container News.
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 plunged to US$525 per 20-foot container and US$600 per 40-foot container, from US$650 per 20-foot container and US$700 per 40-foot container at the end of June.
For West India-Genoa (the West Mediterranean) bookings, contract rates have slipped to US$650/TEU, from US$725, and US$600/FEU, from US$700, the analysis found.
Eastbound cargo (imports into India) rates for these port pairings have also seen sharp declines, month-on-month. According to the analysis, average rates have eroded to US$750/TEU, from US$950, and US$850/FEU, from US$1,050, for bookings from Felixstowe/Rotterdam to West India, whereas rates for shipments from the West Mediterranean (Genoa) to Nhava Sheva/Mundra have crashed to US$350/TEU, from US$715, and US$475/FEU, from US$850.
Thanks to a new round of general rate increase (GRI) attempts by major carriers from 1 July, contract prices have moved up on the India-US trades, month-on-month. The analysis has found that rates for cargo moving from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have increased to US$1,500/TEU, from US$1,400, and US$1,800/FEU, from US$1,650, and to US$1,550/TEU, from US$1,400, and US$1,900/FEU, from US$1,700, for Indian container loads moving to the US West Coast (Los Angeles).
For the West India-US Gulf Coast (Houston) trades, average rates have seen no changes this month from the end-June levels, hovering at US$1,800 per 20-foot and US$2,600 per 40-foot container, according to the analysis.
Major carriers, including Mediterranean Shipping Co. (MSC), CMA CGM, and Hapag-Lloyd, have filed notices with the Federal Maritime Commission (FMC) for mandatory approval to implement further GRIs for India-US cargo, from early August.
Short-term contract rates on the US-India trades (return leg) have seen significant further month-on-month declines — down to US$475/TEU and US$550/FEU, from US$650 and US$750, respectively, from the US East Coast to West India, while for US West Coast-West India trades, down to US$1,000/TEU and US$1,150/FEU, from US$1,500 and US$1,550, respectively, a month earlier.
Average rates from the Gulf Coast to India have fallen to US$800/TEU and US$1,100/FEU, from the end-June levels of US$1,500 and US$2,050.
Rates on intra-Asia trades out of India have also seen further declines month on month, with the exception of North China bookings, the CN analysis reveals. For West India-Yantian (South China), average rates stand at US$115/TEU, from US$170, and US$2,00/FEU, from US$230, while for West India-Central China (Shanghai), rates have hit rock bottom levels at US$10/TEU, versus US$15, and US$15/FEU, versus US$30, respectively.
For West India-North China (Tianjin) trades, rates have ticked up to US$75/TEU, from US$50, and US$130/FEU, from US$1,00, respectively.
Similarly, for Indian cargo to Singapore, there has been no let-up in the rate slide – down to US$5/TEU and US$15/FEU, from US$10 and US$20, respectively, at the end of June, according to the CN analysis.
For Indian shipments to Hong Kong, rates have slumped to US$10/TEU and US$15/FEU, from US$15 and US$30, respectively, month-on-month.
Average July prices for a TEU booking West India-Jebel Ali/Dubai shipments have dipped to US$50/TEU, from US$75 a month ago, while for an FEU booking, rates have held firm at US$150.
With Indian export trade facing demand headwinds from major global markets, the freight rate pressure is unlikely to ease any time soon.
According to new data released by the Indian Ministry of Commerce & Industry, Indian goods export trade, by value, saw its steepest fall in three years in June, down 22% year-over-year to about US$33 billion.
“Exports have seen declines on the back of a slowdown in growth coupled with demand contraction across the globe,” A Sakthivel, president of the Federation of Indian Export Organisations (FIEO), said in a statement.
Sakthivel further noted, “Major economies, including US and China, have shown downward trend in exports, along with the Eurozone slipping into a recession during the start of the year itself, marking contraction in their GDP or a slow start to their economies, across Europe, including the UK.”
He added, “The slowdown comes in the wake of higher energy prices contributing to curbing demand in Europe’s largest economy and surging inflation.”
Sakthivel went on to explain, “One of the reasons for moderating pace of growth in merchandise exports significantly in 2023 has been because of persistent geopolitical tensions, monetary tightening and recessionary fears which has continuously led to a fall in consumer spendings across the globe especially in advanced economies.”
However, FIEO noted some hopeful signs for Indian exports. “We are of the view that that exports will start showing better growth numbers shortly, as things are expected to improve from Q3 of the calendar year, with fresh orders or order bookings for festival and New Year season beginning to come,” stated the federation.
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