In August 2024, there was an almost 70% year-on-year increase in freight rates at Indian ports, which was due to global shipping disruptions, sustained demand, and capacity constraints. This significant surge followed a period of stability lasting over two years, reports ChemAnalyst.
Geopolitical issues
Various factors, such as shipping route complexities, cargo types, and market competition, contributed to the elevated shipping costs. According to media reports, ongoing geopolitical issues worsened the situation, leading to even higher freight rates. These increased costs are expected to impact the profit margins of Indian companies with significant international exposure in FY25.
Among Indian ports, Chennai saw the highest increase in container prices, rising by 50% from April to August 2024, reaching $2,340. This sharp rise is attributed to heightened local demand and increased congestion at the port, as noted by Christian Roeloffs, co-founder and CEO of Container xChange, according to the TOI. Additionally, rates continued to climb in May and June 2024 due to a container shortage, particularly affecting cargo from North East Asia.
Despite the overall trend of increasing freight rates, there was a slight softening in August 2024, with average prices decreasing to $2,100 from $2,200 in July, as reported by Container xChange.
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Source: ChemAnalyst
