News / Box carriers switching focus to growing regional trades, like India-Iraq

Long-haul and shortsea container carriers, concerned at growing demand headwinds in their traditional markets, appear to be exploring smaller or regional tradelanes to deploy available capacity.

The India-Iraq trade is one such lane drawing carrier interest, although it’s a small market by volume.

Reflecting this newfound interest, Singapore’s ONE has announced a new service, between India and Umm Qasr, a multi-terminal harbour in southern Iraq.

The India-Gulf Service (IG2) has a rotation of Mundra-Nhava Sheva-Jebel Ali-Umm Qasr-Jebel Ali-Mundra and will launch with a call from the TB Jinjiang at Mundra on 25 September, according to ONE.

The Asian carrier claimed: “This new service has been introduced to meet the increasing demand between India and Umm Qasar, allowing us to better serve our customers with optimised network coverage and reliable shipping solutions.”

Ocean rates from India to Iraq have climbed in recent weeks, currently $700 per teu and $850 per feu from Nhava Sheva to Umm Qasr for the top mainline operators serving the trade, according to industry data.

And there are some signals they are looking to cash in on the demand upturn. For example, Hapag-Lloyd has announced a peak season surcharge (PSS) of $100 per reefer container for shipments from Nhava Sheva to Umm Qasr from 18 September.

Industry sources say trade between India and Dubai/Jebel Ali is significantly oversupplied, following the recent influx of capacity from several feeder lines, supported by NVOs, for direct Red Sea coverage.

Sources believe these opportunistic NVOs are scouting for incremental volumes to use slots they hold with feeder operators. Growing Umm Qasr coverage is also a pointer to that scramble, they say.

“Some feeder lines are extending their India/Middle East-centric networks to other, secondary, ports in the Persian Gulf to keep operations economically viable,” one freight forwarder told The Loadstar.

Amid the pressure of overcapacity and tepid trade growth, NVO rates from West India to Jebel Ali have crashed into negative territory: $5 or even $1 per teu, sources said.

“NVOs are now essentially running this tradelane business through other shipping incomes or ancillary collections, mainly terminal handling charges and documentation fees,” the source added.

Meanwhile, trade between India and Turkey has also been in the spotlight following the debuts of two Turkish carriers into the market.

Turkon Line and Arkas Line began a vessel-sharing agreement in February on a direct India-Middle East-Red Sea loop.  Riding their “transit time upper hand” over bigger counterparts strained by vessel diversions around Africa, they have already grabbed decent market share.

Arkas recently introduced customised rail services for Indian hinterland reefer cargo in partnership with Container Corporation of India to build on the market momentum.

“The launch of the double-stack reefer blocktrain will deliver a game-changing advantage for cold chain logistics in India, offering customers enhanced efficiency, reduced transit times and an environmentally sustainable logistics solution,” it said.