News / Box carriers come under pressure as US-India trade softens

Container carriers operating to and from India seem to be rapidly losing the power to prop up rates on trades to the US as the market weakens.

In yet another “sceptical” attempt, CMA CGM drastically scaled down its peak season surcharge (PSS), implemented on 1 July – a move that had already been pushed back from the middle of June.

The new PSS for a teu booking from India to the US east coast is $150, a sharp revision from $800 just a few days ago, and for a feu, it has been reset at $300, versus $1,000 earlier.

“In a continued effort to provide our customers with reliable and efficient services, CMA CGM has decided to revise the peak season surcharge,” the French liner said.

The rate slide seen on most trades out of India over the past year is unlikely to reverse any time soon, as carriers are having trouble securing enough bookings to fill vessels.

According to local freight forwarder sources, India-USEC booking rates offered by CMA CGM to regular clients have fallen to about $1,400/teu and $1,700/feu, from the average of $1,700 and $2,100 it was quoting a few weeks ago.

“We do not see an opportunity for a rate hike at this juncture,” a forwarder said; a viewpoint not without merit as Indian exports, by value, declined for the fourth consecutive month in May, to $35bn, down 10.3% year on year, according to government data.  

“The sharp decline in the international demand situation has led to the fall in overall exports,” said A Sakthivel, president of the Federation of Indian Export Organisations.

Meanwhile, cyclone-induced congestion that disrupted cargo flow through Mundra Port persists. Indian rail authorities this week were considering re-routing some Mundra train loads to nearby Pipavav.

Sources told The Loadstar the authorities had proposed scaling up daily train services to Pipavav from the usual average of six trips to about 10 until the logjam at Mundra eased to a manageable level .

Online equipment logistics platform Container xChange, in a recent report on the Cyclone Biparjoy impact, also noted that any interruption in train operations would have many ripple effects into supply chains.