News / Box lines announce $500 GRI on India-US as exports increase

© Oleg Kachura |

Despite a slowing market environment, container lines predominantly active on the India-US tradelane have lined up a renewed general rate increase (GRI).

The first signs have come from CMA CGM and MSC, both have advised customers of a $500 per-teu GRI from end-March.

CMA CGM (India) said Indian container loads to USEC, US Gulf Coast and Canada will attract this rate hike from 24 March.

MSC (India), in a trade notice, noted that the GRI, which it plans to apply from 23 March, was necessary “to maintain the high level of reliability and efficiency of services to meet the needs of customers”.

MSC, CMA CGM and Hapag-Lloyd are the market leaders for India-US containerised trade, providing multiple weekly sailings out of Nhava Sheva (JNPT) and Mundra.

Average rates for Indian exports to the US have seen significant declines in recent months, sequentially reversing to pre-pandemic levels from historic highs in late 2021/early 2022.

Although the latest “GRI ask”, is modest compared with the traditional trend, industry sources remain sceptical about the chances for success, as the demand downturn had already left carriers with considerable capacity overhang problems to deal with.

On top of that, the recent addition of new strings – a West India-USEC connection by Cosco/OOCL and a West India-USWC routing by MSC – has only exacerbated the rate slide in the past few weeks. As a result, the cost of shipping a teu from Nhava Sheva/Mundra to New York has hit a new low of $1,750, a 30% fall from the $2,550 reported at the end of January, according to freight forwarder sources.

“Over the past two years, carriers struggled to increase space and equipment to meet the resurgent Indian export trade and, as demand slowed, rates have sharply softened,” a Mumbai-based liner industry representative told The Loadstar.

“Container lines are continuing to encourage Indian trade to enable exporters to take advantage of potential growth opportunities as western importers increasingly move away from their long-time China-centric procurements to a ‘China+1’ sourcing model,” the source said.

“All this will lead to a healthy rate situation.”

Bharat Thanvi, co-founder of Mumbai-based digital forwarder Freightwalla, told The Loadstar that, while there was no denying capacity expansion had heightened pricing competition, the increasing demand for Indian products presented an opportunity for carriers to target more volumes as the US economy gains traction.

“The main exports from India to the US are ready-made garments, textiles, handicrafts, automobiles, food products, machinery, pharmaceuticals and biochemicals,” noted Mr Thanvi.

“We are seeing a market shift [towards India] and believe this trend will grow in the coming years.”

Indian export industry groups are betting on respectable trade growth in the current fiscal year, which ends on 31 March. A Sakthivel, president of the Federation of Indian Export Organisations, said: “We are on course to cross the previous year’s record export figure, quite easily touching almost $440bn-445bn, with a growth rate of 4% to 5% this fiscal.”

Last fiscal year, Indian exports soared 43%, to $418bn by value, a key factor that had prompted shipping lines to ramp up capacity, mainly in the form of complementary connections to existing networks. 

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