Market Analysis: Container rates on Indian trade routes continue to decline as demand weakens
1 month ago
Market Analysis: Container rates on Indian trade routes continue to decline as demand weakens
Container freight rates on key export routes from India continued to decline in September, driven by a slowdown in export activity, according to an analysis by Container News.
On the westbound India-Europe route, spot rates from West India’s major ports (Jawaharlal Nehru Port/Nhava Sheva and Mundra) to destinations like Felixstowe, London Gateway, and Rotterdam dropped to $4,100 per 20-foot container (TEU) and $4,300 per 40-foot container (FEU), down from $4,800 and $5,000, respectively, in August.
Similarly, rates for shipments from West India to Genoa in the Mediterranean decreased to $4,000/TEU and $4,200/FEU, compared to $4,800/TEU and $4,600/FEU last month.
In contrast, eastbound import rates into India have shown a month-on-month increase. Spot rates for shipments from Felixstowe, London Gateway, or Rotterdam to West India rose to $1,200/TEU and $1,500/FEU, up from $1,100/TEU and $1,350/FEU in August. Rates from the Mediterranean (Genoa) to West India have remained stable at $1,000 for both TEU and FEU.
On the India-US trade, rates to the US East Coast have plummeted from their July highs. Spot rates for shipments from West India to New York have fallen to $5,100/TEU and $5,200/FEU, down from $8,000/TEU and $9,000/FEU in August. Similarly, West Coast rates to Los Angeles have dropped to $5,300/TEU and $6,300/FEU from $6,000 and $7,000, respectively.
Rates on the India-US Gulf Coast route (Houston) have also taken a significant dip, falling to $5,400/TEU and $5,600/FEU from $8,000 per container in August.
While the return leg from the US East Coast to India saw slight rate increases in September, averaging $650/TEU and $1,000/FEU (up from $550/TEU and $750/FEU), rates from the US West Coast to India declined further, settling at $1,300/TEU and $1,900/FEU, down from $1,900/TEU and $3,200/FEU in August.
Intra-Asia trade rates from India continue to be heavily discounted. Rates for shipments from West India to South China (Yantian) are as low as $30/TEU and $40/FEU, while rates to North China (Tianjin) and Central China (Shanghai) have plummeted to just $5 per container. Rates for shipments to Singapore are similarly low, also at $5/TEU or FEU.
Rates on the West India-Jebel Ali (Dubai) route have softened, with September prices at $550/TEU, down from $625, and $1,050/FEU, down from $1,200 last month.
India’s merchandise export trade saw a 9% decline in August after several months of growth, with exports valued at $34.71 billion, according to provisional government data. The Federation of Indian Export Organisations (FIEO) attributed the drop to ongoing supply chain challenges, including high freight costs, shipping delays, and inconsistent schedules.
FIEO President Ashwani Kumar noted that some exporters have turned to the domestic market due to profitability pressures, further exacerbated by logistical issues like shipping space shortages and price volatility. He remained optimistic about future growth, citing increased demand from key markets such as the European Union, UK, West Asia, and the US in the coming months.
Kumar also called for government support, urging measures such as deeper interest subsidies and a long-term extension of the interest equalization scheme to provide stability for exporters. He emphasized the need for quick action on key free trade agreements (FTAs) with the UK, Peru, and Oman to boost export competitiveness.
Source: Container News