Intra-Asia Rates Surge as Demand Rises
- July 1, 2024
- News
Rising demand is enabling container lines on Indian trades to increase prices for intra-Asia services, particularly from China. Market sources report that average spot rates from North China (Tianjin) to West India (Nhava Sheva or Mundra) have surpassed $5,000 for a 40ft container.
This rate surge is not limited to Chinese ports. Prices for India-bound shipments from other Far East locations like Singapore, Port Klang, and Hong Kong have also increased significantly. Intra-Asia rates into India have generally increased by 200% to 250% over the past month, market data reveals.
Vessel capacity is tight due to fewer sailings and schedule disruptions, often causing cargo rollovers for Indian importers, according to shipper sources. Shipping costs from China have become a significant issue for Indian imports, affecting production lines and forcing higher freight payments.
Port congestion in Singapore, Port Klang, and other Southeast Asia hubs has made sailing schedules erratic and transit times unpredictable. The capacity-stressed situation for Indian shippers is expected to last until February, as stated by Jitendra Srivastava, CEO of Mumbai-based freight forwarder Triton Logistics & Maritime.
As container lines focus on the lucrative Chinese trade, Indian ports are experiencing a rush of empty equipment outflows, especially at Mundra Port, due to major lines repositioning into China. The shortage of equipment will concern Indian exporters as trade prospects improve. India’s merchandise export trade saw a 9% year-on-year increase in May, according to provisional government data.
Ashwani Kumar, president of the Federation of Indian Export Organisations, noted the resilience of the export sector and the Indian exporting community, citing a positive growth momentum for the second month in a row on the back of buoyant order bookings. Pushpank Kaushik, CEO of Hyderabad-based ship agent and forwarder Jassper Shipping, believes this capacity pressure could impact trade for India, given that China remains its largest trading partner. He emphasised that addressing vessel shortages is crucial to keep two-way trade flowing.