News / Steep rate hikes on the way for Indian shippers to Europe

Leading container lines on India-Europe networks have announced a wave of steep rate hikes, starting next month.

CMA CGM, Hapag-Lloyd and MSC have already warned customers of impending price rises.

CMA CGM said freight-all-kinds (FAK) rates for Indian cargo moving to North Europe and the Mediterranean would be $1,000 per teu and $1,200 per feu from 4 August, a hefty increase.

From 6 August, Hapag-Lloyd’s “published base rates” for dry shipments from Nhava Sheva/Mundra to North Europe will be $805/teu, up from $280 at present, and $810/feu or hi-cube, up from $110.  From Chennai (southern India), it will be $805/teu, versus $455, and $810/feu, up from $310.

And the German liner said for West India-South Europe trade, base rates will soar to $909/teu, from $509, and to $1,018/feu or hi-cube, from $318. For Chennai-South Europe bookings, rates will increase to the same levels, from $559 and $468, respectively.

While MSC will push FAK rates for bookings from Nhava Sheva to Antwerp/Valencia to $700/teu and $750/feu, from 7 August.

Basic freight charges do not typically include various ancillaries or surcharges, which make up a significant portion of shipping costs incurred by cargo owners.

“Maersk will follow suit on the India-Europe rate activity,” a Mumbai-based forwarder told The Loadstar.  “But it remains to be seen if the hikes will sustain under current market conditions.”

The Danish carrier has already announced significant rate hikes from 31 July on the Asia-Europe tradelane.

Forwarders said the industry-wide rate push was targeted at potential peak-season imports by European shippers over the next few months, ahead of the holiday season.

Meanwhile, contract rates out of India to Europe have continued to fall from the averages reported a week ago. The month-on-month decline has been between 10% and 20%, data shows. For example, rates quoted by major carriers from Nhava Sheva/Mundra to Felixstowe/Rotterdam are down to $525/teu and $600/feu from the end-June trendline of $650 and $700.

All major carriers serving India-US trades have attempted rounds of general rate increases (GRIs) over the past three months, but success eluded them because of the persisting cargo pressure.

Exacerbating those concerns, domestic rating agency ICRA has forecast Indian exports, by value, could see an 8% year-on-year decline in fiscal year 2023-24, after a stellar performance last fiscal that ended in March.

Some signs of the downturn are already visible. Indian exports slid for the fourth month in a row in May, down 10.3% year on year, according to government data.

Industry leaders, notably at the Federation of Indian Export Organisations (FIEO), were hoping to see some demand rebound from this month, but their optimism seems to be receding, with no real uptick in sight, trade sources noted.