Freight rates for Indian exports continue to cool

In western India-Europe trades, average contract rates from West Indies (Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port) to Felixstowe/London Gateway (UK) or Rotterdam (Netherlands) are around US$950 per 20ft container and $1,050 per 40-foot container from $1,000 and $1,100 respectively at the end of February.

For West Indies to Genoa (western Mediterranean) shipments, contract rates have fallen to $850/20ft boxes and $950/40ft boxes, compared to February average rates of $1,000/20 foot crates and $1,100/$40 foot box.

Eastbound freight prices (imports to India) for these port pairings have remained stable month-on-month, with the exception of the Mediterranean trade. According to the analysis, rates range from US$1,250/20ft container and US$1,350/40ft container for Felixstowe/Rotterdam to West Indies bookings. However, prices for shipments from the Western Mediterranean (Genoa) to the West Indies have fallen from US$1,100 and US$1,306 respectively to US$900/20ft box and US$1,006/40ft box in February.

Average short-term contracted rates for trips between India and the US East Coast have continued to cool, albeit at a slower pace than in recent months ahead of a new round of General Rate Increases (GRIs) planned by major airlines. Analysis shows that Nhava Sheva/Mundra to New York shipments are now priced at US$1,502 per 20ft box versus US$1,750 and US$1,970 per 40ft box versus US$2,485 US$ and at US$1,373/20ft containers versus US$1,552 and US$1,741/40ft boxes versus US$1,997 for container loads destined for the US West Coast (Los Angeles ) be transported.

In trade between the West Indies and the US Gulf Coast (Houston), rates have fallen more on average – from $2,635 and $3,535, respectively, to $1,735 per 20-foot and $2,735 per 40-foot containers in February.

Major airlines such as MSC, CMA CGM and Hapag-Lloyd have announced an average GRI of US$500 per TEU as of the end of this month (March 29). It remains to be seen whether this push will be even partially successful given the ongoing demand challenges.

However, on the US-India trade routes (return leg), short-term contract rates have increased by an average of 10-20% compared to levels maintained by the major operators over the last month.

According to CN analysis, USEC (New York) shipment prices have now increased to $908/20ft box from $805 and $1,125/40ft box from $1,025 ; at $2,509/20ft box vs. $2,409 and $3,243/40ft box vs. $3,043 for USWC (Los Angeles) bookings; and $1,870/20ft and $2,093/40ft boxes from the US Gulf Coast, compared to $1,670 and $1,643 a month earlier, to the West Indies (Nhava Sheva/Mundra ).

Rates for intra-Asian trade out of India have been falling measurably month-on-month, CN analysis shows. For West India-Yantian (South China), prices are now US$200/20ft box and US$300/40ft container, down from US$240 and US$364 respectively, and for West India-Central China (Shanghai) trades have seen prices plummet to $50/20ft box and $70/40ft from $75 and $100 respectively a month ago.

The average contract rates for bookings from West Indies (Nhava Sheva/JNPT or Mundra) to Tianjin (Northern China) are from US$100 to US$90 per 20ft container and from US$200 to US$180/40 -Foot box fallen.

For Indian cargo bound for Singapore, rates have remained flat month-over-month at US$25/20ft and US$50/40ft containers.

For Indian shipments to Hong Kong, major carriers are accepting bookings for US$50/20ft container versus US$75 and US$70/40ft container versus US$100, according to CN analysis.

March rates for the West Indies Jebel Ali/Dubai movement have increased from US$75 and US$200 respectively to US$100/20ft containers and US$250/40ft boxes at the end of February.

Contract rates for intra-Asia round-trip traffic have either not changed or have increased slightly for some port pairs, notably Shanghai and Tianjin, according to the CN analysis.

Meanwhile, Indian merchandise exports by value fell for the third straight month in February, down 8.8% yoy, according to government data. Still, industry leaders are hoping for respectable growth in export trade for fiscal year 2022-23, which ends March 31.

“India is not only one of the fastest growing economies, but also one of the best performing exporting nations,” A Sakthivel, president of the Federation of Indian Export Organizations (FIEO), said in a statement.

Sakthivel added: “The latest figures are more relevant against a backdrop of global headwinds compounded by geopolitical uncertainties, rising inflation, slowing demand and high interest rates.

He continued, “Many countries have seen their exports fall sharply recently.”