Indian shippers are fearful of major supply chain disruptions after dockworkers called for strikes at key ports, claiming the government has failed to meet commitments.
A consortium of labour groups told port authorities workers would stage indefinite work stoppages across ports from 17 December in protest at the lack of action to address long-standing concerns.
The move centres on wage revisions and pension benefits. Union sources complained that governing body the Indian Ports Association (IPA) had been “apathetic” about making recommendations in line with specific promises made during talks to avert a strike planned in August.
“It is imperative on the part of the IPA to forward the settlement to all the port authorities for implementation, as per the practice hitherto followed,” said the labour consortium.
“It is highly objectionable to state that, even after a lapse of two months after signing the settlement, it was not forwarded to the authorities for implementation,” they added.
Union leaders also said workers would hold rallies at port locations on 5 December to highlight their grievances, as part of preparations for the industrial action.
A productivity-linked reward (PLR) scheme remains at the heart of the impasse, and needs to be approved by the federal government retroactively to 2021. With no PLR guidelines in place, interim retirees from the ports have lost such benefits, unions claim.
“The workers and pensioners are restless, and [they are] compelled to go on industrial action against the non-implementation of statutory settlements,” said the labour groups.
According to IPA sources, the ministry of shipping needed to issue an order approving wage revisions for port workers, which “has been delayed”, one official told.
The source of funding to cover additional overheads by the government ports, amid growing market share challenges from the private port sector, could be a major reason pushing the decision back at government level, according to industry observers.
There are 12 government-controlled ports in India, but Adani Ports-run Mundra recently overtook Nhava Sheva to become India’s busiest container gateway. Similarly, Chennai has ceded a significant portion of its southern Indian containerised trade to Kattupalli Port, also managed by Adani.
Meanwhile, the likelihood of port disruption comes as Indian exports are showing some signs of a rebound after recent downward trends. In October, the value of India’s exports swelled 17% year on year, boosting industry sentiment.
“An impressive double-digit growth in merchandise exports amid continuing global economic uncertainties is definitely very encouraging,” said Ashwani Kumar, president of the Federation of Indian Export Organisations.
The global shipping industry has observed diverse trends among leading container ports worldwide, reflecting significant changes in connectivity and cargo volumes that influence the competitive landscape across the Far East, Middle East and Trans-Atlantic.
The Far East continues to spearhead global container shipping, with major ports like Shanghai, Singapore, Ningbo, and Busan at the forefront. Shanghai led globally with a record 49.16 million TEUs in 2023, closely followed by Singapore with 39.01 million TEUs. Between Q1 2023 and Q3 2024, connectivity in the Far East rose by 4.57%, solidifying its position as a key shipping region.
Additionally, the Middle East, with pivotal ports like Jebel Ali and Tangier, experienced a 2.75% increase in connectivity from Q1 2023 to Q3 2024, highlighting its strategic role as a nexus for East-West trade.
The region’s connectivity growth is part of broader efforts to diversify economies and enhance logistics infrastructures, establishing it as a crucial hub for transshipment and international trade. However, it still remains behind the Far East in terms of overall connectivity and cargo volumes.
While the Far East demonstrates robust throughput and connectivity, the Middle East is leveraging its strategic location to enhance its market position, albeit at a more moderate pace.
Meanwhile, critical ports in the Trans-Atlantic route, linking North American and European markets, saw a marginal reduction in connectivity, with an average drop of 0.63% during the same period. Despite this, the Trans-Atlantic corridor remains a pivotal axis for containerized trade.
These trends indicate a shift in global maritime trade towards Southeast Asia, with the Middle East serving as a critical transshipment hub that bridges Europe and Asia amid broader economic diversification efforts by Arab states.
Container spot rates were largely unchanged for a third consecutive week, as it became evident that a 15 November rate hike on Asia-Europe trades had failed to have anything more than a marginal impact on pricing.
Drewry’s World Container Index (WCI) global composite rate declined 1%, although its Shanghai-Rotterdam leg edged up 1% and ended the week on $4,071 per 40ft, while the Shanghai-Genoa route was up 3% week on week, to $4,520 per 40ft.
Although these rates are some 255% and 229% higher year on year, forwarders on the trades remarked that repeated attempts recently by carriers to further lift spot freight rates appeared to have had little effect, and they were sceptical that the effect of new FAK (freight all kinds) rate levels scheduled for 1 December would be any different.
Traditionally, the final two months of the calendar year would see carriers and their customers hammering out the terms of the following year’s Asia-Europe annual contracts, and the level at which they are set is often guided by spot rate behaviour. Now, the trade waits to see if the 1 December FAK hikes stick.
This morning, CMA CGM announced an FAK of $6,500 per 40ft on Asia-West Mediterranean ports, the same rate MSC announced earlier this week, while Hapag-Lloyd will set a rate of $6,100 to North Europe and $6,400 to the West Mediterranean on the same date.
Given that achieving carriers’ desired rate levels would require a 50% week-on-week increase in Asia-Europe spot rates, the chances of these FAK hikes fully sticking appear to be close to zero.
Meanwhile, the calendar for the Asia-Europe contracts appears to have slid from a January-December set-up to Q1-to-Q1 arrangement, with many shippers reluctant to sign anything before Chinese New Year, set to begin on 27 January.
“We’ve had a busy tender season so far, but most clients seem to be holding out on negotiations post-CNY, which makes sense,” told one forwarder.
This was confirmed last week by Hapag-Lloyd CEO Rolf Habben Jansen, who told analysts during the company’s third-quarter earnings call that “it is still very early for the Far East contracting season”.
He added: “Yes, negotiations have started in many cases, but most of those contracts will only be closed in the first quarter.” And he said that, of “the early ones that have been closed, there we definitely see that rates are up. They don’t go to the level of spots, but they are definitely up compared to what we had before”.
Meanwhile, the WCI’s Shanghai-Los Angeles spot rate shed 5% this week, down to $4,488 per 40ft, while the Shanghai-New York leg was flat, at $5,210 per 40ft.
Carrier attempts to raise prices have seen a number of blank sailings announced in a short-term measure to curtail capacity – Drewry’s Cancelled Sailings Tracker reports 70 sailings cancelled between next week and the end of the year, representing some 10% of scheduled departures globally.
It said that 50% of these would be on the transpacific eastbound trade, 27% on the transatlantic westbound and 23% on Asia-Europe westbound, and the consultancy warned shippers and forwarders that further blanks could be on their way, while schedule reliability may also take a hit.
''Over the next five weeks, we anticipate a decline in schedule reliability, with approximately 10% of vessels expected to miss their scheduled sailings.
“To sustain higher rates, carriers are likely to implement additional cancellations, cargo owners operating in this trade should proactively prepare for potential disruptions,” it said.
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Container spot freight rates this week were virtually unchanged from last week, as planned mid-November rate increases from carriers have, apparently, failed to stick.
There was a marginal 2% increase on the Drewry World Container Index (WCI) Shanghai-Rotterdam leg, which finished the week at $4,043 per 40ft, while Shanghai- Genoa was unchanged, at $4,400.
Asai-Europe carriers and shippers have now begun the annual negotiations on 2025 contracts, and carriers are keen to hike spot rates – which act as a guide for contract rate levels – as high as possible, and this week’s lack of movement will undoubtedly disappoint.
The current WCI Asai-North Europe rate is far below the levels targeted by some carriers for 15 November: MSC was aiming for a new FAK rate of 5,500 per 40ft for Asia-North Europe shipments, for example; while CMA CGM targeted $5,700 per 40ft on Asia-West Mediterranean shipments.
But carriers are likely to have another go at the end of the month. MSC and Hapag-Lloyd have announced new Asia-Europe FAK rates to be implemented on 1 December, with MSC asking for $6,300 per 40ft from the Far East to North Europe, while Hapag-Lloyd is aiming for $6,100 per 40ft to North Europe, and $6,400 for West Mediterranean ports.
During yesterday’s third-quarter earnings call with analysts, Hapag-Lloyd CEO Rolf Habben Jansen revealed that the few 2025 contracts already concluded were up on 2024 levels, with spot rates currently far above the corresponding level at this point last year, although he added that the contracting calendar had slipped somewhat on the trade.
“It is still very early for the Far East contracting season. Negotiations have started in many cases, but most of those contracts will only be closed in the first quarter [of next year].
“Of course, the early ones that have been closed, there we definitely see that rates are up. They don’t go to the level of spots, but they are definitely up compared with what we had before.
“Also, don’t forget that many of the contracts last year were closed before we had the Red Sea crisis, so our costs are up significantly,” he added.
On the transpacific, there was also very little spot rate movement: the WCI’s Shanghai-Los Angeles leg contracted 2% week on week, to end at $4,700 per 40ft, while Shanghai-New York was unchanged, at $5,222 per 40ft.
One bright spot for container shipping lines is the intra-Asia trade. Drewery recently launched a fortnightly intra-Asia spot rate index, a composite of 18 routes, comprising north and South-east Asia, and China-Middle East/India services, which today recorded a 45% rise in price over the past fortnight, to stand at an average rate of $829 per 40ft.
Drewry said the increase had been seen “amid the pre-Christmas cargo rush”, and expected this “to continue in the next fortnight of November, due to tight space, traditional shipping peak season, blank sailings and other factors”.
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Forwarders have lambasted the Canadian government for its “late intervention” in the stand-off between dockers and their employers across the country’s ports.
Responding to labour minister Steve MacKinnon’s order to the Industrial Relations Board (IRB) this week to extend existing collective bargaining agreements and impose arbitration on all parties, one forwarder told: “The big question here is why the government waited until the damage was done before stepping in.
“It was clear to everyone they’d have to get involved and, once again, they waited until the strike was in full effect before coming to the rescue.
“Industry is pleased that goods will be moving again, but probably more annoyed that it’s kind of too late, the damage has been done.”
Despite the intervention, unions, including the Longshoremen’s CUPE Local 375 at the port of Montreal, have vowed to fight the action in the courts.
Similarly, the International Longshore and Warehouse Union Local 514, representing dockers in British Colombia, warned the government it would “not forget how employers and this federal Liberal government have attacked all of labour”.
The forwarder we spoke with said this action could impact the government’s relationship with unions, adding: “It’ll be interesting to see if the unions truly do remember this.”
Nor is this the first time Mr MacKinnon’s timing has been considered off, his August decision to use the IRB to resolve a dispute between rail workers and their employers was criticised.
As in the present situation, the labour minister forced members of the Teamsters Union into binding arbitration with railroads Canadian Pacific Kansas City (CPKC) and Canadian National (CN), again provoking unions, who said Mr MacKinnon had been “manipulated” by the carriers.
The forwarder said that situation had played out “almost exactly like this, with government getting involved too late… The difference here is timing, the port strike is in the busiest season”.
“I don’t think it’s a coincidence this has happened during the holiday rush. The impact will be significant. Unfortunately, the only ones who end up paying for all of this are consumers. That’s where all of the additional cost has to trickle down.”
At Montreal, the dispute centres around terminals operated by Termont, responsible for some 40% of the port’s volume, and has been rumbling on since 31 October, with carriers having sought to bypass the situation by rerouting services into Halifax.
Warning “while there may be some progress” with this diversion, the forwarder said, carriers could face cargo backlogs there.
“It only works if union members in Halifax agree to offload the containers, because in previous scenarios other ports refused to accept ships originally destined for ports that were on strike.
“It’ll take weeks to clear the backlog and, during the holiday season rush to get goods on the shelves, a lot of them won’t make it on time, and the cost will increase significantly.”
In a warning to shippers, the forwarder noted that, while the cost may flow down to consumers, given the seasonality of products coming in, it may “be much more difficult to pass the cost on after the holiday rush”.
Cargo stakeholders using Adani Group container terminals at the south Indian ports of Kattupalli and Ennore are reporting growing delays, impacting productivity levels for vessels.
Amid historical infrastructure bottlenecks at Chennai, Kattupalli and Ennore had become the focal points for liners serving India’s east coast.
According to industry sources, the roll-out of new terminal operating systems by Adani had featured glitches in applications that typically connect vessel, yard and gate operations, hobbling the entire supply chain system.
Customs brokers serving the gateways said the delays had reached “alarming proportions”, with no tangible results from a series of meetings with various authorities, including Customs.
“Operational challenges at Kattupalli and Ennore have become unbearable to the trade,” the Chennai Customs Brokers Association (CCBA) told its members, and called on them to share their pain points for submission to officials.
The association complained that customs service providers were particularly frustrated with delays getting “equipment interchange receipts”, a document issued by a carrier for empty container allotments to the shipper, and “Form 13s”, which allow trucks to enter the terminal.
According to CCBA, the disruption is causing longer container dwell times and additional costs for exporters and importers.
“The delays have considerably hampered the gate-in of export shipments and the issuance of import delivery orders,” reported a source.
Other sources also noted a significant slowdown in container scanning, due to the system disruption, creating long truck queues outside terminals.
When containers remain on-dock beyond their allotted free storage time, cargo owners inevitably are charged port ground rent and carrier detention fees, in addition to other potential business losses.
Kattupalli and Ennore together handled 134,210 teu in September, down from 139,437 teu in August, according to industry data.
Adani has boosted its container terminal presence in southern India in recent years, as India’s production verticals have diversified. The region in and around Chennai is seeing rapid manufacturing investments, particularly for electronics and hi-tech products.
Meanwhile, container transhipments through Adani’s Vizhinjam Port are growing at a brisk pace, hitting some 100,000 teu in just four months after it began trial operations in July. The new terminal has seen some 46 containership calls, including several ultra-large vessels in MSC’s fleet.
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Despite generally weak cargo demand, spot rates on the Asia-Europe trades continued to show gains this week, as carrier capacity management combined with port congestion left space at a premium.
Following a series of general rate increases on 1 November and a new round of freight all kinds (FAK) levels due on 15 November, carriers are adopting a bullish tone in what is traditionally one of the weaker periods of the calendar.
“In the wake of the Golden Week national holiday period in China, demand out of Asia traditionally weakens, with seasonal stock already approaching European shores. However, we are seeing demand bounce back a lot stronger, with higher call for ocean capacity,” Maersk said in a trade analysis yesterday.
This week’s spot rates, sourced from Drewry’s World Container Index (WCI) and Xeneta’s short-term XSI, would appear to show recent pricing supporting this.
The WCI’s Shanghai-Rotterdam leg grew 16% week on week, to finish at $3,954 per 40ft, while the Shanghai-Genoa leg jumped 21%, to $4,399 per 40ft.
“Spot rates on the Asia-Europe tradelane increased for the second consecutive week and Drewry expects this uptrend to continue next week” it noted.
Similarly, Xeneta’s Far East-Europe leg of its XSI saw a 25% week-on-week jump, to $4,105 per 40ft.
Meanwhile, North European ports have continued to struggle to clear backlogs – Hamburg’s port modernisation programme at HHLA’s Altenwerder and Burchardkai terminals remains ongoing and has forced the operator to introduce controls on export containers out of the former.
A Hapag-Lloyd operational update this morning noted that Altenwerder’s storage capacity was at 100%, while its yard utilisation remained high, at 85%.
Maersk added that the approach of winter was also causing issues – heavy fog in Rotterdam could lead to lengthening vessel queues, while in Antwerp, it said, “vessel waiting times remain high due to late arrivals from previous ports”.
In addition, maintenance work on the Belgian port’s quays is expected to last until the third week of December, “contributing to an increased yard density at the terminal”.
As a result, 2M partners Maersk and MSC have had to slide their joint week 48 AE55/Griffin Asia-North Europe sailing by a week.
Meanwhile, it was a very quiet week on the transpacific and Asia-US east coast trades, as everyone waited for the results of the US election, and spot rates on the two trades remained flat for a second consecutive week.
As US shippers digest the implications of a second Trump presidency, however, renewed activity can be expected during the remainder of the year.
