Mediterranean Shipping Co. (MSC) has announced a new scale of overweight surcharges for Indian containers moving to Canada, Mexico, Central America and the Caribbean.
The Geneva-based liner has begun charging US$300 per 20-foot dry box from 1 October.
The levy applies to standard containers weighing over 18 metric tons, excluding the tare weight of the equipment.
“MSC has decided to implement a revised overweight surcharge (OVW) for 20DV units having cargo weight above 18 MT per 20DV,” MSC Agency (India) said in a customer advisory.
With slowing cargo volumes, container lines are under severe pricing pressure across trades out of India and this surcharge readjustment is reflected in that new market reality.
Indian container volumes out of major government ports in September slid to 892,000 TEUs from 914,000 TEUs a year earlier, according to new data obtained by Container News. As the growth pace moderated, April-September volumes via major ports ticked up 3.9% year-over-year to 5.7 million TEUs, data shows.
Indian merchandise exports, however, saw a respectable 4.8% increase last month, but exporters remain concerned about the ongoing demand downturn.
“We should not draw solace from the fact that exports of most of the economies are facing contraction, but this is a stark reality,” said A. Sakthivel, president of the Federation of Indian Export Organisations (FIEO). “The coming few months would be quite challenging unless the geopolitical situation improves drastically.”
FIEO also reiterated its demand for a rollback of the goods and services tax (GST) levied on export freight, effective 1 October.
The association noted, “The levy of GST on exports freight has further added to our [exporters’] liquidity woes.”
It went on to explain, “The non-extension of notification relating to GST exemption on freight for exports has caused panic and uncertainty adding to the liquidity challenges of the exporters.”
FIEO added, “Freight rates have gone up by 300-350% from pre-Covid levels and though there is little correction in the freight rates recently, freights are still 200-250% more than at 2019 levels.
Therefore, payment of GST on such high freight rates will affect the liquidity of the exporters to a large extent, particularly as the interest rates have also moved northward with recent hikes by the Reserve Bank of India (RBI).”
Jenny Daniel
Global Correspondent
Contact email: j.daniel@container-news.com
