- India’s trade faces significant disruption as MSC, the world’s largest container shipping line, suspends two services, one bound for the U.S. and the other for the Mediterranean.
- Simultaneously, CMA CGM, the world’s third-largest container line, blanks four sailings on three services from India in January.
- The longer detour via the Cape of Good Hope, adopted to avoid Red Sea attacks, has led to increased transit times and fuel costs, prompting general rate increases and surcharges.
- Freight rates have more than doubled since the Red Sea attacks, impacting India’s exporters and adding strain to East-West trade routes.
Red Sea Crisis Impact on Shipping Lines
Amid the Red Sea crisis and attacks by Houthi rebels since December, MSC and CMA CGM are compelled to suspend and blank key routes from India. The surge in freight rates, doubling since the attacks, is attributed to the longer detour via the Cape of Good Hope, resulting in extended transit times.
Service Disruptions by MSC and CMA CGM
MSC, headquartered in Geneva, suspends the IMED Service (India to East Mediterranean) and the Indus A service. CMA CGM, based in Marseille, blanks four sailings from India in January. Longer detours necessitate extra vessels in shipping loops for both carriers, further complicating the container shipping landscape.
Broader Impact on India’s Trade
The Red Sea crisis compounds challenges in the container shipping industry, which has already experienced disruptions post-pandemic. Overcapacity due to record ship orders funded by pandemic profits is exacerbated by service suspensions and blank sailings. India’s exporters face challenges, especially during the pre-Chinese New Year rush and the upcoming pre-Ramadan rush in March. The situation is anticipated to strain demand, affecting cargo capacity and asset distribution.
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Source: Logistics Insider
