News / Indian intra-Asia freight rates tumble, even into negative territory

The steep post-Covid rate erosion on container trades seems more pronounced for contracts from India to key Asian intermediate ports like Port Kelang and Singapore, according to industry sources.

Bookings from Nhava Sheva (JNPT) or Mundra to Port Kelang are being accepted at as low as $1 per teu. The two ports account for the majority of India’s containerised trade.

For Singapore, carriers are willing to ship at $5/teu, while average rates for Indian shipments to Shanghai and Hong Kong have also sunk, to about $10/teu.

Freight forwarder sources noted that, in real terms, cargo is often booked at “no freight cost”, but has to be invoiced for a nominal freight amount for insurance reasons.

“We only need to find cargo sources,” a Mumbai-based forwarder told The Loadstar.

Additionally, Indian customs rules typically have a bearing on intra-Asia rate trends. Regulations require carriers to re-export empty boxes, covering duty-free cargo, within six months of landing at an Indian port to avoid incurring import duty. As such, excess inventory is generally shipped back to origin or demand locations.

However, rates on the reverse direction for these port pairings have trended up in recent weeks. For imports into Nhava Sheva/Mundra, forwarder sources put teu rates offered by major carriers from Singapore/Shanghai at $450, and from Hong Kong at $325, up about 30% from prices reported two weeks ago.

Historically, most of the empty equipment repositioning into India occurs on intra–Asia routes, with China-origin containers leading that play. With slowing demand, the outflow of empties through Indian ports has measurably outpaced inflows. For example, Nhava Sheva saw some 180,000 teu of empty export boxes between April and June, versus some 93,000 teu of empty imports, according to available data.

Meanwhile, after unsuccessful hefty GRIs, carriers serving Indian trades are now pinning their hopes on more modest increases. Hapag-Lloyd has announced a $200/teu hike for container loads from India to the US east coast from 1 August, while MSC is looking at $500/teu on India-US trade, also from 1 August.

“In order to maintain the high level of reliability and efficiency of our services to meet the needs of our customers, MSC has decided to implement a general rate increase ex-India to the US and San Juan,” said the carrier.

Amid the export downturn, Indian container volumes slumped 12.5% month on month in June, while export/import boxes handled by Indian Railways for the month fell 11%, year on year, data shows.

Yet, the industry seems to be betting that intra-Asia cargo volumes will see some resurgence, amid the trade diversification in the region. A consortium of RCL, PIL, Evergreen and CUL has upgraded a China-India string with larger vessels, averaging 6,000 teu versus 3,000 teu previously, and three additional port calls, at Shanghai, Ningbo and Karachi, with the first sailing planned for 17 July.

The new port rotation is Shanghai, Ningbo, Shekou, Singapore, Port Kelang, Nhava Sheva, Mundra, Karachi, Port Kelang, Singapore, Haiphong and back to Shanghai.