- There has been an “exorbitant” rise in rates since the Covid-crisis began
- A “crazy” price of $22,000 to ship one container from Mumbai to Mombasa
- Many lines have intentionally kept higher rates on various routes to avoid new bookings
With the severe shortage of containers and capacity, Indian forwarders are being quoted “crazy” freight rates by carriers that “won’t honor” contracts, says an article on LoadStar.
Severe space crisis
One Chennai-based forwarder said most carriers have implemented peak season surcharges or general rate increases for July, alongside a “severe space crisis” for US west coast bookings.
Elsewhere, Hapag-Lloyd has announced a $450 rate increase on 20ft containers to West Africa and $500 to South Africa, while CMA CGM will implement a peak season surcharge of $1,250 per teu to east coast Central America.
Rakesh Pandit, CEO of Conbox Logistics, said Indian exporters were already worried about the escalating freight rates, and now they faced a “huge challenge” securing bookings.“All major liners, Maersk, MSC, CMA CGM, Hapag -Lloyd, and Cosco, have very limited space ex-Indian ports, especially to Africa, Oceania, and South America.”
“The lines don’t have space, and whatever space is left they are trying to sell for a premium,” he complained. “Many lines have intentionally kept higher rates on various routes to avoid new bookings. This has been confirmed, unofficially, by many senior staff members of shipping lines.”
The sudden dearth of capacity
Indeed, last week Mr. Pandit was quoted a “crazy” price of $22,000 to ship one container from Mumbai to Mombasa.
Mr. Pandit said there were a number of reasons for the sudden dearth of capacity, including the Pipavav port closure, congestion in Colombo, and a backlog of containers at key Indian export hubs, with limited space for loading, and he added “Many vessels are skipping ports like Mundra, Hazira, Vizag, and Kolkata.”
Meanwhile, the container shortage is compounding the capacity problem, according to the FIEO. “The situation was slowly reverting to close to normal before the second wave, but it has again got worse. The waiting time to get a container has now increased to 10-20 days, while instant availability attracts over 100% premiums,” it said.
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