News / Carriers roll out hefty surcharges as demand rises in 'hot' Indian markets

Photo: JNPA

Container lines serving Indian trades are taking advantage of massive capacity demand from local exporters.

According to industry updates, container freight rates from India to the US and Europe are at their highest levels since the Red Sea disruption began.

And major carriers are now rolling out a flurry of hefty shipping surcharges on Indian container bookings across tradelanes to maximise earnings in the hot market.

Marseille-based liner CMA CGM has announced a peak season surcharge (PSS) of $1,500 per box for Indian cargo to North Europe and the Mediterranean, starting today, claiming it was necessary “to provide customers with reliable and efficient services”.

The carrier has already levied a $1,000 per container PSS on India-Red Sea cargo bookings, since 18 July, and has announced a PSS of $5,000 per container on all bookings for shipments to the US east and Gulf coasts from 15 August.

Meanwhile, MSC has imposed a congestion surcharge of $500 per container on Indian imports from North Europe, apparently an attempt to recover additional costs incurred through persistent terminal congestion and inland delays at Indian ports, especially JNPA (Nhava Sheva) and Mundra, an issue linked to additional transhipment volumes amid Persian Gulf port disruptions.

“Due to current market conditions and the limited capacity available to meet demand, MSC will apply a congestion surcharge on the trade from Northern Europe to Indian Subcontinent in order to maintain its services at the required level,” the world’s largest container line told customers.

Maersk joined that surcharge race by announcing a steep ‘container overweight penalty’ for boxes shipped from India’s ports of JNPA, Mundra, Pipavav, and Hazira to North Europe and Israel. Those with a gross weight exceeding 22 tons will attract a fee of $2,000 per teu from 1 August.

Pushpank Kaushik, CEO and head of business development for Indian subcontinent, Middle East & SEA at Hyderabad-based Jassper Shipping, believes the recent surge in surcharges is a consequence of the supply chain disruption plaguing key trade routes amid the Middle East crisis.

“For [Indian] exporters, the impact goes beyond higher freight bills,” he told The Loadstar. “The disruption has reduced effective capacity, leading to equipment shortages, congestion at ports, and higher operating costs. As these pressures build, carriers are passing on costs through emergency, peak season, detention, and other surcharges.”

Meanwhile, the free-trade agreement (FTA) between India and the UK this month presents an opportunity for container lines to lift higher cargo volumes in both directions, industry sources believe.

That’s because India’s labour-intensive industry verticals – primarily textiles, leather, gems and jewellery, chemicals, and marine products – are now thought to have gained duty-free market access into the UK.

“The India–UK FTA is expected to enhance the global competitiveness of Indian products by enabling exporters to access the UK market on more favourable terms,” said SC Ralhan, president of the Federation of Indian Export Organisations.