News / Maersk service to southern India a hit, but market rates are still rising

Maersk India

Maersk Line appears upbeat after boosting the southern India market last year with regular direct connections from Ennore Port, near Chennai, to North Europe via its ME7 service.

The weekly loop deploys eight ships with an average nominal capacity of 6,500 teu each on a rotation of Ennore, Colombo, Salalah, Algeciras, Felixstowe, Rotterdam, Bremerhaven, Jeddah, Salalah, Colombo, and back to Ennore.

“Our ME7 direct service has been very well received by our customers, especially in the lifestyle and retail segment,” Maersk (India) told The Loadstar. 

India’s east coast has long suffered from a shortage of direct long-haul shipping connections, forcing cargo owners and freight forwarders to rely on transhipment options over hub ports – mainly Colombo, Singapore and Port Klang, and Maersk said the ME7 became an effective “antidote” to some of the historical bottlenecks plaguing that region.

“We are constantly monitoring developments in global supply chains and are in touch with our customers to better understand their requirements,” said Maersk, “and are prepared to adjust services depending on what customers demand and what the overall logistics ecosystem can offer.”

The direct Maersk offering has provided a solid source of volumes for Ennore Container Terminal (AECT), which had struggled to woo regular long-haul liner customers because of vessel-related tariff issues. Touted as an alternative gateway for congested Chennai terminals, it has 800,000 teu capacity and handles substantial vehicle export movements.  The port handled close to 400,000 teu between April and December, the first three quarters of fiscal year 2021-22.

At the same time, freight rate levels across Indian trades continue to move northwards – a concern that is set to grow further with more surcharges in the offing.

On 15 February, CMA CGM will begin charging an overweight surcharge (OWS) on cargo booked from North Europe, the Mediterranean, Black Sea and Adriatic for north/west India on its premium EPIC1 & EPIC2 services. The new levy will be $200 per dry container weighing over 15 tons (including tare). The surcharge also applies to shipments for Pakistan and Sri Lanka.

The French liner said the surcharge was necessary to “continue providing its customers with reliable and efficient services”.

Soaring rate levels have been the subject of heavy pushback from Indian exporters trying to take advantage of elevated global sourcing for Asia-made goods.