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CN analysis: Freight rates on trades out of India on reverse track after Red Sea-driven upswing

Container freight rates on trades out of India have begun to cool after the Red Sea crisis-driven rocketing, according to the latest market analysis by Container News.

On the westbound India-Europe trade, average short-term contract rates for 20-foot container bookings from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) have dropped to US$2,750 per 20-foot container and US$3,100 per 40-foot container, down from US$3,600 and US$3,900, respectively, at the end of February.

For Indian loads to Rotterdam (the Netherlands), March rates have stood at US$2,750 per 20-foot container and US$3,000 per 40-foot container, down from US$3,600 and US$3,900 respectively a month ago.

For West India-Genoa (the West Mediterranean) bookings, contract rates have cooled to US$3,300/TEU, from US$4,050, and US$3,700/FEU, from US$4,100, according to the CN analysis.

Similarly, eastbound cargo (imports into India) rates for these port pairings have softened from end-February averages, to US$1,800/TEU and US$2,100/FEU, from US$2,550 and US$2,800, respectively, for bookings from Felixstowe/London Gateway to West India, while for shipments from Rotterdam to West India, rates have slumped to US$1,150/TEU and US$1,700/FEU, from US$2,550 and US$2,800/FEU, respectively.

For trades from the West Mediterranean (Genoa) to West India, the analysis put March rates at US$1,100/TEU, up from US$1,050, and US$1,300/FEU, down from US$1,700/FEU.

Short-term contract prices on the India-US trades have also seen downward corrections from the Red Sea crisis-induced highs. Average rates in March for shipments from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have stood at US$3,750/TEU, down from US$4,000, and US$4,350/FEU, down from US$5,500/FEU a month ago. For Indian container loads moving to the US West Coast (Los Angeles), rates have decreased to US$2,400/TEU and US$3,150/FEU, from US$2,500 and US$3,500, respectively, reported at the end of last month.

For the West India-US Gulf Coast (Houston) trades, rates have slid to US$4,000/TEU and US$4,400/FEU, from US$4,500 and US$5,000, respectively, according to the CN analysis.

Short-term contract rates on the US-India trades (return leg) have remained relatively steady month-on-month, with USEC-West India pricing reported at US$550/TEU and US$800/FEU. However, for US West Coast-West India bookings, rates have climbed to US$1,150/TEU and US$1,400/FEU, from US$925 and US$1,250.

Average rates from the US Gulf Coast to West India have also moved up from February averages – at US$1,100/TEU and US$1,600/FEU, versus US$950 and US$1,250.

Carrier contract rates on intra-Asia trades out of India have hit new lows, found the CN analysis. For West India-Yantian (South China), the analysis has put average rates at US$25/TEU and US$40/FEU, down from US$65 and US$50, respectively, while for West India-Tianjin (North China), carriers have revised quotes to as low as US$10/TEU and US$25/FEU, from US$15 and US$30, respectively, last month.

For West India-Shanghai (Central China) trades, rates have continued to be in negative territory, at US$10 per TEU or FEU. Also, for West India loads to Singapore, carriers continue to accept bookings at as low as US$10/TEU or FEU. However, carriers have been able to keep rates in positive territory on the West India-Jebel Ali (Dubai) trade month-on month -– with March averages reported at US$250/TEU, up from US$180, and US$350/FEU, up from US$300.

Meanwhile, Indian merchandise exports by value hit a new monthly high in February year-over-year, presenting hopeful signs for industry stakeholders amid supply chain concerns linked to the Red Sea crisis. According to provisional data, exports rose 12% to US$41.4 billion.

“The last time when the figures showed such a higher growth was in March 2023, when it was at US$ 41.96 billion,” Ashwani Kumar, president of the Federation of Indian Export Organisations (FIEO) said in a statement.

Kumar also noted: “Such an impressive increase in overall exports growth despite the Red Sea crisis, tight monetary stance by the developed world and falling commodity prices posing challenge, not only portrays the dedication and commitment of the sector but also the resilience of the exporting community, who have continuously been braving such odds since Russia-Ukraine war.

The FIEO chief further said: “The exporters have consistently been performing, driving the growth of exports, and also adding to the growth momentum of the economy.”

Kumar went on to add: “However, much will depend on new contracts to be signed with buyers during the new fiscal as the exporters have been absorbing the burden of increased freight costs on old contracts.”

According to FIEO, the need of the hour is to address the Red Sea crisis challenges by ensuring availability of marine insurance, regular supply of containers, and rational increase in freight charges.

The association said: “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, Oman and EU soon.”


Jenny Daniel
Global Correspondent

Contact email: [email protected]





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