Container News: India Container rates continue to fall due to weak demand

According to a new market analysis by Container News, container rates outside India continue to fall due to falling demand.

In the westward trade between India and Europe, From the West Indies (Jawaharlal Nehru port (JNPT)/Nhava Sheva or Mundra port) to Felixstowe/London Contract prices for Gateway(UK) or Rotterdam (Netherlands) have slipped to $4,400 per 20-ft container and $4,800 per 40-ft container, respectively, from $4,650 and $5,200 last month. For West Indian-Genoa (Western Mediterranean) cargos, carriers accepted reservation prices of US $4,900 per 20-ft case and US $5,100 per 40-ft case, compared to August levels of US $5,000 and US $5,300, respectively.

Eastbound freight rates have fallen by double-digit percentages and are now hovering at US $1,525/20-ft container and US $1,700/40-ft container, while rates from Felixstowe/Rotterdam or Rotterdam to West India (Nhava Sheva/Mundra) are US $1,725 and US $1,900 respectively.

"The contraction in global trade can also be seen in the sharp drop in freight rates, which are down about 50 per cent on major trade routes," the Federation of Indian Export Organisations (FIEO) said in a statement. "With inflation plaguing all economies, inventories are very high in all economies around the world because lower purchasing power is affecting purchases, so demand is slowing." "Demand for liquidity rose as buyers delayed payments and asked exporters to suspend further shipments or release small numbers of such shipments," FIEO added.

FIEO also noted that inflationary pressures are clearly undermining consumer demand in key purchasing markets. "With inflation plaguing all economies, inventories are very high in all economies around the world because purchasing power is down, affecting purchases, so demand is slowing. However, the demand for low-value [Indian] products is growing by leaps and bounds." "So while we expect volumes to remain the same, value could take a hit," FIEO explained.

Freight forwarders have also expressed concern about slowing export order flow. "India has seen a decline in various export sectors, including chemicals and engineering," Sanjay Bhatia, co-founder and CEO of Mumbai-based Freightwalla, told CN. He went on to explain, "This is affecting container traffic to and from India because the demand for containers is falling. Container volumes are falling at major ports in India and around the world."

Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business

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