In the wake of pandemic-triggered all-time highs, the freight rate plunge that began nearly a year ago has not let carriers connecting India's container trade relax.
Average freight rates on the India-Europe trade route westbound hit a new low this month due to continued sluggish demand. Prices for short-term contracts from West India (Nhava Sheva/Mundra) to Felixstowe/London Gateway or Rotterdam are down around 25% from their end-April levels and are now hovering between $650/TEU and $700/FEU.
In addition to the Mediterranean trade, the prices of eastbound goods (imported to India) at these ports remained stable on a monthly basis. Local freight forwarders related news that, despite the capacity adjustment, but in a short period of time prices will not soon be stable or upward trend, the carrier is increasingly difficult to ensure a stable booking level to meet its export to India quota.
Indian Federation of Export Organizations (FIEO) Chairman A Sakthivel said in a statement: "Monthly exports continue to be negative, mainly due to the global economic slowdown and rising inflation weakening international demand."
Sakthivel added: "Against the backdrop of geopolitical uncertainty, rising inflation, shrinking demand and high interest rates, high inventories and exchange rate volatility further exacerbate the challenging situation of export decline."
The exchange rate against the United States rebounded.
On the Indo-US trade front, the new generalized rate hike (GRI) appears to have helped major airlines in the past few weeks to sell cabins at a modest premium, with TEU ship bookings from the West India to the US east coast having risen from a month ago to 1550 dollars to 1700 dollars.
Although their GRI attempts in two rounds did not meet the target amount, the analysis showed that for the West Indo-US West Coast trade, the average TEU rate was 1600 US dollars, compared with 1500 US dollars.
despite this, airlines have reason to be concerned, as Indian merchandise export trade took a hit in April (the first month of the 2023-24 fiscal year). According to the latest government data, exports fell 13 percent year-on-year last month, the biggest monthly drop in three years.
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