For major Asian transit ports from India to Port Klang and Singapore, the sharp drop in container trade after the pandemic appears to be even more pronounced, according to industry sources.
Booking space from Nhava Sheva (JNPT) or Mundra to Port Kelang can be done for as little as $1 /TEU. The two ports account for the bulk of India's container trade.
For Singapore, carriers are willing to take shipments at $5 /TEU, while average freight rates from India to Shanghai and Hong Kong have also fallen to around $10 /TEU.
Trend of Asian shipping rates
Freight forwarding sources pointed out that, in practice, cargo space is usually booked on a "no freight" basis, but invoices have to be issued for a nominal amount of freight for insurance reasons. "We just need to find the source," said a Mumbai-based freight forwarder.
Moreover, Indian customs rules typically influence the direction of freight rates for intra-Asian shipping.
According to customs regulations, carriers must re-export empty and duty-free goods within six months of their arrival at ports to avoid import duties. As a result, excess stock goods are usually shipped back to the origin port of origin or the place of demand.
However, the reverse shipping rates between these ports have trended higher in recent weeks.
For imports from Singapore/Shanghai to Navasheva/Mundra, major shipping lines are offering freight rates of $450 /TEU, while Hong Kong rates are $325, up about 30% from the price two weeks ago, according to freight forwarder sources.
Historically, most empty containers to India have occurred on intra-Asian routes, with containers from China dominating.
As demand slows, the outflow of empty containers from Indian ports has significantly exceeded the inflow. For instance, according to available data, the number of empty containers exported from Navasheva between April and June was about 180,000 TEUS, while the number of empty containers imported was about 93,000 TEUS.
Shipping companies may increase freight rates
Meanwhile, shipping companies servicing Indian trade are now pinning their hopes on more modest growth after failing to revise their GRI significantly upwards.
Germany's Hapag Lloyd said it would implement general rate increases for containers of dry bulk, refrigerated and dangerous goods shipped from the Middle East/Indian subcontinent to the U.S. East Coast, effective Aug. 1.
GRI is $200 per 20 foot and 40 foot standard container for containers shipped from India, Sri Lanka, Pakistan, United Arab Emirates, Bahrain, Oman, Kuwait, Qatar, Iraq to all ports on the East Coast of the United States.
MSC is also considering raising container rates on the India-US route by $500 /TEU with effect from August 1.
"In order to maintain high service reliability and efficiency to meet customer demand, MSC has decided to implement a GRI full upgrade on routes from outside India to the US and SAN Juan," the shipping company said.
The volume of import and export goods may recover
Amid sluggish exports, India's container freight volume fell 12.5% in June from the previous month, while Indian Railways' container volume for imports and exports also fell 11% year on year, according to data.
However, the industry appears to be betting that intra-Asia volumes will see some recovery as the region diversifi es trade.
The alliance - comprising RCL, PIL, Evergreen and CUL - has upgraded the China-India route with larger vessels with an average capacity of 6,000 TEUs, up from 3,000 TEUs previously, and added three port stops in Shanghai, Ningbo and Karachi, with the first voyage scheduled for July 17.
The new port vessel turns to Shanghai, Ningbo, Shekou, Singapore, Port Klang, Nawasheva, Mundra, Karachi, Port Klang, Singapore, Haiphong and then returns to Shanghai.
On China-India trade
Trade between the two countries has been on the rise in recent years.
In 2022, trade between China and India maintained a strong momentum of growth, with bilateral trade volume reaching US $135.984 billion, breaking the US $100 billion mark and hitting a new record high.
Among them, China exported US $118.502 billion and imported US $17.483 billion to India, resulting in a trade surplus of US $101.019 billion.
This is the first time that China's trade surplus with India has exceeded 100 billion US dollars, and it is also an important milestone in the history of China-India trade.
With the booming trade between China and India, the total bilateral trade between the two countries reached $105.27 billion as of April this year, up 9.6 percent from the previous year.
This is the first time in history that India has overtaken the US to become China's second largest export market and largest source of imports.
At the same time, cross-border flows of goods between China and India have been increasing.
It is estimated that the value of goods exchanged between the two countries was about $2.2 trillion in the first half of this year, up 7.8 percent year on year. That means that over the past year, India has imported more from China than it trades to other countries.
