Container freight rates from India to major international destinations have seen a steady decline in November, despite ongoing export demand challenges. This trend is attributed to market dynamics, geopolitical tensions, and financial hurdles impacting competitiveness.
Freight Rate Trends
India-Europe Trade
- Westbound (Exports): Rates for shipments from West India to European ports have dropped:
- To UK/Rotterdam: $1,650/TEU and $1,900/FEU (down from $1,750/TEU and $2,050/FEU).
- To Genoa: $1,800/TEU and $1,950/FEU (previously $1,950/TEU and $2,150/FEU).
- Eastbound (Imports): Spot rates for shipments from Europe to India have also decreased, reflecting lower costs on both legs.
India-US Trade
- West India to US East Coast: Rates declined to $1,850/TEU and $2,050/FEU, down from $2,200/TEU and $2,500/FEU.
- US West Coast: Significant drop to $3,100/TEU and $3,500/FEU from $3,900/TEU and $4,800/FEU.
- US Gulf Coast: Rates fell to $2,600/TEU and $2,900/FEU, compared to $3,500/TEU and $3,800/FEU.
Intra-Asia Trade
Rates remain negative, with bookings as low as:
- West India to South China (Yantian): $30/TEU and $40/FEU.
- West India to North/Central China (Tianjin/Shanghai): As low as $5 per TEU or FEU.
- West India to Singapore: $5 per TEU or FEU.
Export Challenges
Decline in Export Trade Value
India’s merchandise exports saw a 5% year-over-year decline in November, attributed to:
- Geopolitical Tensions: Issues in the Red Sea route and Gulf region due to rising Israel-Iran tensions.
- Supply Chain Disruptions: Persistent bottlenecks in global trade routes.
- Financial Constraints: Limited trade finance options affecting MSME competitiveness.
Calls for Government Action
The Federation of Indian Export Organisations (FIEO) highlights the urgent need for:
- Liquidity Support: Deeper interest subvention schemes and extended interest equalisation for five years.
- Free Trade Agreements (FTAs): Rapid finalization of deals with the UK, Peru, Oman, and Sri Lanka to create a predictable export environment.
The downward trend in freight rates provides a short-term cost advantage for exporters but underscores broader challenges like geopolitical tensions and trade finance constraints. Addressing these issues through policy intervention and strategic agreements will be critical for revitalizing India’s export growth.
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Source: CONTAINER NEWS
