Freight rates in India for containers and bulk cargo are to fall on some trade routes in the next few months after rising over the last six months, even doubling to some destinations, reports The Indian Express.
Industry players attribute this to slowing demand in North America, higher oil prices and greater shipping capacity, newspaper said.
The report said India-US container rates dropped from a high in June of US$2,000 per TEU to $1,000-1,100/TEU at present, after surging more than 100 per cent from $250/TEU in June to $550/TEU in August.
"Since the American economy is witnessing slower growth, rates in that sector are expected to stay low and maybe fall further," said Julian Bevis, South Asia area line and operations manager for Maersk Line.
"Meanwhile, trade between India and the Far East is growing rapidly, but with many carriers entering the market, prices there too are likely to remain the same," he said.
On the other hand, industry experts anticipate inbound container freight rates from China and Hong Kong to India may experience further upward movement. But exports to Europe are expected to remain strong and an increase in freight rates on such trade routes is possible.
Mayur Gandhi, chief financial officer of Schenker India, said: "In days to come, shipping lines will move towards long-term contracts rather than the short-term contracts that have been popular in the era of rising rates."
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