The growth potential for India-US ocean trades is persuading more container carriers to invest in tonnage on the route, with Cosco the latest entrant with its subsidiary, OOCL. The Chinese carrier has deployed six ships, and Hong Kong-listed OOCL four, launching a direct express West India-US east coast connection, reports The Loadstar.
About the ships
The ships are all in the 4,500 teu range, small compared with those on other services by MSC and the Hapag-Lloyd-CMA CGM consortium that range between 8,000 and 10,000 teu.
Marketed by Cosco as AWES and by OOCL as ISE (India-South-east Asia east coast), the joint weekly loop connects Singapore, Laem Chabang, Cai Mep, Mundra, New York, Norfolk and Boston.
With a lone port call in India, Cosco/OOCL are looking to consolidate cargo at Mundra, the Adani’s group’s flagship harbour that thrives on volumes from the northern India hinterlands and regional transhipment loads. The first Mundra call was yesterday.
The new service joins five current weekly sailings between West India and the US east coast and enters the market as freight rates are seeing a rapid slide from the historic highs of end-2021/early last year.
But local industry observers say there is an opportunity for carriers to build volumes because US importers are increasingly diversifying procurement away from China towards other South-east Asia markets, including India.
Between April and November last year, India’s exports to the US, by value, grew to $53bn from $50bn in 2021. In contrast, India’s exports to China crashed 36.8% over the same period, according to data from India’s ministry of commerce.
“Once the US economy gains traction, stocks will need to be replenished. This will boost shipments out of India,” a Mumbai-based freight forwarder told The Loadstar. “And that can leave carriers in a better negotiating position.”
Indian exports to the US are largely garments, food products, machinery, pharmaceuticals and tiles, according to market sources.
Bilateral trade between India and the US hit a new high of $119.42bn in fiscal year 2021-22, up from $80.51bn in 2020-21, representing some 11.5% of New Delhi’s overall global trade. As a result, the US became India’s top trading partner, replacing long-time leader China.
Industry statistics also show India’s ready-made garment (RMG) exports came roaring back in November after months of setbacks.
Naren Goenka, chairman of the Apparel Export Promotion Council of India said: “RMG exports have been witnessing a rough patch in past months, since most of the traditional markets, including the US, have been witnessing recession and global headwinds, leading to shrinking demand on one hand and buyers asking for steep discounts on the other.
“After a few months of slip, RMG exports have again turned positive, signalling the resilience of the industry to adjust to the prevailing challenges,” added Mr Goenka.
RMG movement is a key component of US imports from Asia, with Bangladesh and Vietnam vying with India for market share as sourcing shifts from China.
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Source: The Loadstar