Indian government leaders have promised exporters some notable proactive steps to ease their supply chain pain points, but industry stakeholders remain sceptical about their winnability and value proposition amid multiple challenges.
At a high-level stakeholder meeting held on 19 September to address exporter concerns, officials agreed to extend relief in the form of longer free times for empty containers, lower rail yard fees, faster cargo movements and investment in containership fleet.
Container Corporation of India (Concor), port authorities and Shipping Corporation of India (SCI) have been asked to lead those efforts. Representatives of foreign container lines also pledged to support government efforts.
“The decisions taken by the Ministry of Ports, Shipping and Waterways and Ministry of Railways in the meeting will result in significantly breaking down shipping costs, improving availability of containers, resolving empty containers issue, faster evacuation of export consignments and reducing congestion at the ports,” said union minister of commerce and industry Piyush Goyal said.
Explaining the steps to be implemented, Goyal noted that Concor would allow storage of empty containers at its yard in Nhava Sheva Port (JNPA) free of cost for 90 days, in addition to offering a steep reduction in related container-handling tariffs for boxes staying this period.
Similarly, SCI will provide more capacity to serve Indian export/import trade, while other foreign carriers promised some concessions or downward adjustments in their container transportation rates and lift-on/lift-off charges applied at storage yards.
JNPA chairman Unmesh Sharad Wagh noted various measures being taken to alleviate congestion problems at the port, which he believes would result in quicker clearance of cargo and shorter turnaround times.
Stakeholders also stressed the need to speed up air cargo flows.
Goyal called on all stakeholders to make “concerted efforts to significantly mitigate the difficulties and address the issues faced by the exporters, effectively deploy multi-disciplinary capabilities and adopt ‘whole of the government’ approach to ensure that no logistic difficulty is faced by the exporters.”
The minister went on to explain: “Due to the current geopolitical tensions, the Red Sea crisis, Houthi operations, ongoing wars and its impact on international trade, there was a need to engage with a multidisciplinary team.”
“The government will continue to regularly monitor the situation,” Goyal added.
However, while welcoming the government intervention, industry experts believe as the market remains exposed to disruptive events, supply chain volatility is an industry-wide problem.
According to them, empty container flow has been impacted by longer or unsettled vessel sailing schedules, while ports have had to deal with space pressures due to stronger-than-expected volume surges.
Meanwhile, ocean rates on major export trades out of India have noticeably dropped over the last month or so, but they continue to remain above pre-pandemic market levels.
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Singapore, the world’s largest transhipment hub, has emerged as one of the clear winners in the forthcoming alliance reshuffle, new analysis from Alphaliner today shows.
With the February deadline for the new alliance structure to begin – with the three main groupings of the Ocean Alliance, THE Alliance and 2M partnership scheduled to reform into the Gemini Cooperation, Premier Alliance, standalone MSC and an unchanged Ocean Alliance – analysis of the new port rotations shows Singapore gaining six more port calls from the Asia-North Europe carriers.
In the South-east Asia region, Singapore’s gain is partly Maersk-controlled Tanjung Pelepas’s loss, the Malaysian transhipment hub losing two Asia-North Europe calls.
Of the of the main Asian gateway ports, Vietnam’s Cai Mep gains two calls, Yantian loses three, Ningbo loses one and Shanghai’s call number remains the same.
In North Europe, the Belgian hub of Antwerp – MSC’s regional hub – is the main victim of the reshuffle. It will lose four Asia-North Europe calls with the Gemini Cooperation’s exit from the port to focus hub-and-spoke transhipment operations on Rotterdam and Wilhelmshaven.
Across the trade, Rotterdam’s Asia-North Europe call count will remain the same, Hamburg gains one call, Bremerhaven loses one and the French gateway of Le Havre gains a call.
In the UK, the competition between Felixstowe and London Gateway will see the former gain two calls and the latter lose two, while Premier Alliance calls at Southampton will keep its count the same.
Alphaliner reports: “Felixstowe will attract more business at the expense of London Gateway. The Premier Alliance will continue the two weekly calls at Southampton of THE Alliance and no longer use London Gateway.”
For shippers and their freight forwarding partners, the shake-up will prove a net benefit, in terms of choice, the analyst suggests.
“The current five 2M loops, two standalone MSC services and four loops of THE Alliance (11 services in total) will be replaced by four loops each for Gemini, MSC and the Premier Alliance – 12 loops in total,” it writes, adding that the seven loops currently operated by Ocean Alliance members CMA CGM, Cosco, Evergreen and OOCL “are expected to remain largely unchanged”.
However, the total port calls across those 12 services cumulatively offered by Gemini, MSC and Premier Alliance will decline, to 132, compared with the 148 currently offered by 2M and THE Alliance – again due to the Gemini Cooperation’s hub-and-spoke network.
The Gemini network will see its direct port calls drastically reduced, compared with Maersk and Hapag-Lloyd’s current direct call count.
“Interestingly, the four Gemini loops will have a total of 28 port calls, resulting in a low average of only seven calls per loop. MSC’s four standalone services will serve no fewer than 55 ports (14 per loop), which is almost double compared with Gemini.
“It shows the different strategies of the current partners, with Maersk and Hapag-Lloyd going for above-90% schedule reliability, while MSC prefers to offer its clients a multitude of direct services to smaller destinations,” Alphaliner writes.
Rail connections from Antwerp and Zeebrugge to Spain are being significantly expanded. Services between Antwerp and Catalonia will become more frequent, and a new rail link to Madrid is being introduced.
Hupac, with Lineas as its traction partner, will increase the frequency of its existing services between Antwerp and Catalonia to 10 weekly departures. The Antwerp-Catalonia Line, which departs from the Combinant terminal in Antwerp, will serve terminals in Perpignan (Roussillon) and Barcelona (El Morrot).
Additionally, Kombiverkehr is launching a new rail service between Antwerp and Madrid. Having begun from 3 September, this route offers direct, twice-weekly service for containers, swap bodies, and hazardous goods, with DB Cargo and Renfe as traction partners. Trains will depart from the Combinant terminal in Antwerp and arrive at the Abronigal terminal in Madrid.
US presidential hopeful Donald Trump’s promise to impose a 20% tariff on all imports entering the country, as well as 60%-100% imports levied on Chinese goods, could throw the transpacific trade into a renewed rate spike.
Ocean freight rate intelligence platform Xeneta said that the last time Mr Trump occupied the White House and first imposed tariffs on Chinese imports in 2018, the result was a 70%-plus increase in transpacific freight rates, as US importers and their Chinese suppliers desperately tried to front-load imports to beat the tariff deadline.
Xeneta chief analyst Peter Sand said: “Raising barriers to trade is almost always a negative move. We saw the cost of shipping goods by ocean spike dramatically when Trump introduced tariffs back in 2018 and his latest proposals will simply be a case of history repeating.”
According to Xeneta data, average spot freight rates from China to the US west coast increased from $1,503 per 40ft on 1 January 2018 to $2,604 on 1 November 2018.
Although Mr Trump claimed in the debate with Democrat nominee Kamala Harris that the proposed tariffs would not result in increased prices for consumers, industry observers largely disagreed.
In a summer analysis, the Peterson Institute for International Economics estimated the combined effect of the proposed tariffs would cost a middle-income household at least $1,700 in increased expenses each year, although this is number does not take into account the effect of potentially higher freight rates.
Freightos lead analyst Judah Levine said: “If Trump is re-elected and announces new tariffs, we could see a similar spike in rates. In 2018, then-president Trump’s tariff announcements led to a doubling of freight rates as shippers rushed to move goods ahead of increased costs.
“As in 2024, tariff announcements have historically altered the timing of shipments,” he added.
Mr Sand further explained that the cost of higher freight rates would likely be borne by US consumers: “When ocean container shipping markets increase, that cost gets passed down the line and ultimately it is the end-consumer who pays the price.
“It could be through increased cost of goods on the shelves or a limited choice in the products available.”
He pointed to the Red Sea crisis as evidence of the effect supply chain disruptions can have on the cost of goods.
Since the onset of the Houthi attacks on shipping, spot rates on the Far East-US east coast trade increased 303% between 1 December 2023 and 1 July 2024, and increased by 389% in the same period on Far East-US west coast shipments.
“Shippers react to supply chain threats by rushing to import as many goods as possible as quickly as they can. Front-loading of imports contributed to the massive increases in freight rates following the outbreak of conflict in the Red Sea and we will see the same behaviour from shippers ahead of any new tariffs coming into force,” added Mr Sand.
“Shippers and freight forwarders dislike uncertainty because it reduces their ability to manage supply chain risk.
“This is why people who work or operate within the maritime industry embrace global trade and do not want to see tariffs or other barriers introduced,” he added.
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Container lines seem to be shelving plans to implement fresh rate increases on the India-US tradelane that has yielded them stronger-than-expected returns over the past two months.
Indeed, CMA CGM has delayed for the third time a peak season surcharge (PSS) it originally planned to implement in August until 1 October.
The French line has also reduced the PSS from the previously advertised $1,500 per container to $1,000, on shipments from the Indian subcontinent, Middle East, Red Sea and Egypt to the US east and Gulf coasts.
Similarly, Hapag-Lloyd has a $1,000 per container general rate increase (GRI) attempt lined-up for 1 October.
“This GRI/GRA adjustment is applicable to all containers gated and is valid until further notice,” the German carrier said in a customer advisory.
According to market sources, rates from India to North America have dropped precipitously since the second half of August, after soaring to around $10,000 per 40ft container in July.
And sources expect rates to continue declining through this month, as demand linked to the traditional peak season tapers off.
A slew of blanked sailings on West India-USEC connections, triggered by network changes, had also helped carriers push rates substantially higher, forwarders noted.
Meanwhile, weekly capacity out of Nhava Sheva and Mundra for North America has strengthened, with CMA CGM and Hapag-Lloyd opening independent loops, after dismantling their decades-long joint Indamex services in response to network changes unfolding from the Gemini alliance.
But shipper sources expect some cargo rollovers because of ongoing vessel schedule disruption and container backlog concerns at Mundra, following recent flooding that forced a suspension of port operations for a few days.
Indian container volumes have gathered strong pace in the fiscal year 2024-25 that began in April. According to the latest data, the country’s containerised trade in August surged 16% month on month, to 2.2m teu, with some terminals reporting all-time monthly highs.
PSA Mumbai (BMCT) at Nhava Sheva solidified its market share, breaking a throughput milestone of 200,000 teu in a month.
“We are the second terminal in India to have achieved this feat, after the Adani CT3 (with MSC) at Mundra,” the Singapore-based terminal company said.
PSA sources also claimed container transhipments from MSC remained a volume-booster for the Adani terminal, unlike Nhava Sheva terminals that thrive solely on export/import gateway cargo.
By way of comparison, new data for August shows that Mundra handled 666,845 teu in the month, against 639,336 teu at Nhava Sheva.
At the same time, the recent elevated ocean freight rates, on top of lingering shipping disruption, had been a concern for Indian exporters, as national merchandise exports by value dipped 1% year on year in July, after a streak of respectable monthly gains, data shows.
“Some exporters have diverted to the domestic market as profitability in exports has taken a hit, with sharp increases in international freight rates, both ship and air,” said Ashwani Kumar, president of the Federation of Indian Export Organisations.
