India’s Exporters Face Freight Challenges
ROADS & HIGHWAYS

India’s Exporters Face Freight Challenges

India’s exporters are grappling with steep freight rates, container shortages, and limited shipping space, according to foreign container shipping lines. While freight rates have eased, dropping by 30-40% for shipments from India’s east coast to Europe and the U.S., exporters continue to face hurdles. Freight rates to the U.S. are now between $4,300 and $4,500 per twenty-foot equivalent unit (TEU), down from $5,500-$6,000, while rates to Europe have decreased to $3,000-$3,200 per TEU.

These reductions are partly due to the conclusion of the Christmas season cargo rush, where large volumes of goods were shipped in advance to meet Western market demands. Consequently, the cargo flow has slowed, easing space constraints on ships. However, concerns loom over a possible U.S. longshoremen strike in October, which could disrupt supply chains, creating container shortages and driving freight rates back up. Exporters are anxious about potential delays and space issues if this strike proceeds.

Shipping lines argue that while container shortages are reported, the situation is returning to normalcy, though not yet fully resolved. During the pandemic, the global supply chain was disrupted, causing a surge in demand for containers and shipping space, which drove prices higher. With the pandemic-induced boom over, rates were declining until geopolitical tensions, such as the Houthi attacks, caused shipping lines to reroute through the Cape of Good Hope, temporarily increasing freight rates.

Looking ahead, the introduction of new container ships with a cumulative capacity of 2.4 million TEUs in 2024 may add significant capacity and exert downward pressure on freight rates. However, uncertainties such as U.S. tariffs, global political tensions, and potential strikes will continue to impact global shipping and trade routes.

India’s exporters are grappling with steep freight rates, container shortages, and limited shipping space, according to foreign container shipping lines. While freight rates have eased, dropping by 30-40% for shipments from India’s east coast to Europe and the U.S., exporters continue to face hurdles. Freight rates to the U.S. are now between $4,300 and $4,500 per twenty-foot equivalent unit (TEU), down from $5,500-$6,000, while rates to Europe have decreased to $3,000-$3,200 per TEU. These reductions are partly due to the conclusion of the Christmas season cargo rush, where large volumes of goods were shipped in advance to meet Western market demands. Consequently, the cargo flow has slowed, easing space constraints on ships. However, concerns loom over a possible U.S. longshoremen strike in October, which could disrupt supply chains, creating container shortages and driving freight rates back up. Exporters are anxious about potential delays and space issues if this strike proceeds. Shipping lines argue that while container shortages are reported, the situation is returning to normalcy, though not yet fully resolved. During the pandemic, the global supply chain was disrupted, causing a surge in demand for containers and shipping space, which drove prices higher. With the pandemic-induced boom over, rates were declining until geopolitical tensions, such as the Houthi attacks, caused shipping lines to reroute through the Cape of Good Hope, temporarily increasing freight rates. Looking ahead, the introduction of new container ships with a cumulative capacity of 2.4 million TEUs in 2024 may add significant capacity and exert downward pressure on freight rates. However, uncertainties such as U.S. tariffs, global political tensions, and potential strikes will continue to impact global shipping and trade routes.

Next Story
Infrastructure Energy

Digital Economy, Renewable Energy to Boost Job Creation: Economic Survey

The Economic Survey 2024-25, presented by Union Finance Minister Nirmala Sitharaman, indicates substantial improvement in India’s labour market, driven by strong post-pandemic recovery and formalisation of the workforce. Key findings include a significant drop in the unemployment rate from 6 per cent in 2017-18 to 3.2 per cent in 2023-24. Additionally, there has been notable growth in female labour force participation, which increased from 23.3 per cent in 2017-18 to 41.7 per cent in 2023-24.Other highlights include:Over 30.51 crore unorganised workers registered on the eShram portal, suppor..

Next Story
Real Estate

Aditya Birla Housing Finance Secures Rs 8.3 Billion from IFC

Aditya Birla Housing Finance Ltd. (ABHFL), a subsidiary of Aditya Birla Capital, has raised Rs 8.3 billion through non-convertible debentures (NCDs) from the International Finance Corporation (IFC). The company stated that the funds will be used to provide housing loans to low- and middle-income groups (LIG and MIG), with a special focus on promoting homeownership among women. Additionally, a portion of the investment will support MSMEs, particularly women-led enterprises, to drive economic growth. The initiative aims to strengthen financial inclusion and uplift underserved communities in the ..

Next Story
Infrastructure Energy

Bihar to Bid Out 2,400 MW Power Plant by March

The Bihar government plans to auction the proposed 2,400 MW coal-based power plant at Pirpainti by March 2025. Part of the state's FY25 budget initiatives, the project is valued at Rs 214 billion, covering multiple power sector developments. Coal for the plant is expected to come from Eastern Coalfields, with fuel and location already determined to streamline the bidding process. Discussions are underway to finalise coal supply under the SHAKTI scheme, with a resolution expected by February. The Central government has also pledged support for fast-tracking environmental clearances to facilit..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000